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Parliamentary Questions


Question Without Notice No. 674 asked in the Legislative Council on 11 October 2017 by Hon Jim Chown

Parliament: 40 Session: 1


AGED AND CONTINUING CARE SERVICES — COMMUNITY-BASED SERVICES —2017–18 STATE BUDGET
      674. Hon JIM CHOWN to the parliamentary secretary representing the Minister for Health:
I refer to item 5 on page 125 of budget paper No 2 regarding the provision of aged and continuing care services and community-based palliative care services. I note that despite the increase from an estimated actual income of approximately $285 million in 2016–17 to approximately $314 million in 2017–18, the net estimated cost of services for the same periods will decline from $263 million to $172 million respectively. On the surface that may indicate a significant reduction of service delivery regarding the relevant services. However, this variance is in part supported by note 1 of item 5, that the variance between the two-year comparison is, and it states —
      a result of realignment of budget settings for hospital and non-hospital services based on the allocation of actual costs to the endorsed OBM Framework. This realignment has resulted in updated cost and budget allocation between budget parameters for non-hospital services and hospital services.
In order to clarify the apparent reduction of the net estimated cost of services, but being mindful of the instruction of note 1 to item 5 —
      (1) What are the specifics of budget settings for hospital and non-hospital services, and what are the actual costs?
      (2) From where are the apparent income increases derived?
      (3) Which service costs have been reallocated and to where have the estimated service costs been allocated?
Hon ALANNA CLOHESY replied:
I thank the honourable member for some notice of this extensive question. I am advised of the following.
      (1) As stated on page 117 of budget paper No 2, the following information concerning budget settings is provided. I quote —
          A total of $6.4 billion or 71% of the 2017–18 Budget will be allocated to hospital services. The Government's commitment will provide for an expense growth rate of 2.5% ($155.2 million) for Public Hospital Services in 2017–18 relative to estimated actual expenditure in 2016–17.
          The Government's funding contribution to public hospitals continues to be determined on an activity basis with the Government endorsing the purchase of weighted activity units (WAUs). For 2017–18, the Government has approved the purchase of 907,938 WAUs for the State's public funded hospitals, representing an increase of 1.9% over estimated actual activity in 2016–17. The price determined for 2017–18 activity is $6,129 for each WAU and is set using Government endorsed cost parameters.
      The price of $6 129 per weighted activity unit does not include financial products of depreciation, borrowing costs and resources received free of charge. Non-hospital services and financial products of $2.5 billion provide the remaining balance of budget settings expenditure in 2017–18.
      Under the outcome-based management framework, the 2015–16 actual costs are reflected on page 121 of budget paper No 2 under the service summary table. The categorisation of WA Health's budget settings in the new OBM framework between hospital services are, broadly, services 1 to 4 and part of service 8—$6 billion. Non-hospital services are services 5 to 7, 9, 10 and part of service 8—$2.4 billion. Financial products including depreciation, borrowing costs and resources received free of charge are allocated across the service lines.
      (2) The movement is due to a reduction in funding for home and community care in the 2016–17 estimated actual.
      (3) Service costs for aged and continuing care are non-hospital services and have been reallocated as part of the 2017–18 budget across services 1 to 4 and part of service 8, which are hospital services.
      The PRESIDENT: I do not think that question or the response complied with being either concise or brief.