IHPA publishes an annual National Efficient Cost (NEC) Determination for public hospital services for each coming financial year. The NEC underpins funding for services that are not suitable for activity based funding, such as small rural hospitals. The NEC determines the Commonwealth Government contribution to block funded hospitals.
NEC cost model
The NEC cost model is determined using the in-scope activity and expenditure data for hospitals to be block funded. Hospitals are assigned to a size-locality grouping and mean expenditure is calculated for groupings.