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The new Health Care Agreements for 1998-2003 are currently being negotiated between the Commonwealth and State and Territory governments. The Commonwealth's offer aims to address the major problems associated with the current Agreements, including cost-shifting incentives and funding rigidities. It has proposed a funding model whereby admitted and non-admitted patient services are funded on an output basis. Other aspects of the proposal include funding for quality enhancement and structural change, and specific funds for mental health and palliative care. The proposal also aims to achieve a more equal sharing of risks and benefits between the Commonwealth and the States and Territories. The views expressed are those of the authors and should not be taken as an official view of the Department or the Minister. While the authors have had primary responsibility for the development of the Commonwealth model and the preparation of this paper, they wish to thank other members of the Health Care Agreement Branch (Heather Cocks, Ian Macdonald, Elaine Pringle and Shane Wright) for their assistance.

The Commonwealth's proposal for the 1998-2003 Health Care Agreements