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Funding environments

Public and state funded

Public hospitals, state community programs and PHN commissioned services fund Allied Health in a way almost nothing else does.

Where Allied Health earns in its own name

In an activity-funded public hospital, Allied Health is usually a cost inside somebody else's episode price. It earns in its own name in a small number of places: the outpatient clinic, the compensable patient and the state funded community program. Knowing which of those a service is in decides most of how it should be run and argued for internally.

How far that holds depends on the state. Funding models, who signs and how many buyers exist all change at the border, and everything national travels while nothing local does. Working out which arrangement applies is usually the first thing worth doing.

What gets brought to me

Nobody can see what the service costs or earns

Allied Health disappears into an episode price or a program grant, so the service cannot make its own case at budget time and cannot tell whether an expansion would pay for itself.

Everything national travels, and nothing local does

A model that works in one state does not survive the border. Who signs, how many buyers there are and whether the state already funds a service in that catchment all change completely.

What the market will actually do is hard to see from outside it

Provider capacity, workforce supply and the price at which providers will take the work are difficult to establish before a program goes live. That is usually an information problem rather than a design one, and it is answerable in advance.

A contract is ending and the replacement is not like the old one

Re-tender is the exposure in this family. The work that protects a service happens years before the tender, not in the month it opens.

What I am usually asked for

  • Where Allied Health actually earns and where it is absorbed
  • Cost to serve inside a block funded or grant funded program
  • Service model design against a price negotiated at contract
  • Market soundings and provider capability assessments for commissioners
  • Interstate entry, including who signs and what is already funded there
  • Tender review, bid strategy and what to commit to
  • Workforce structure where clinicians span several funding sources

Foundational supports and Thriving Kids

The commissioning model emerging under Thriving Kids moves the buyer. Where a private practice previously billed an individual's NDIS plan, in several jurisdictions the buyer becomes a state-commissioned organisation holding the contract. In New South Wales the draft program specifications require any subcontract to be time-limited and approved in advance, and state that ongoing reliance on subcontracting as a delivery model is not permitted.

That is a structural change rather than a pricing change, and it produces opportunities and risks depending on which side of the contract an organisation sits on. Both government and providers have a role in managing the transition well, and the practical question for anyone reading this is which side of it your revenue is on and for how long.

The price here is negotiated at contract and then fixed, which is a different commercial problem from a stream that reprices annually.

Analysis from someone who has run the business

300+

Clinicians at the provider I co-founded

$15m+

Annual revenue at that business

130+

Allied Health providers I have worked with

100%

Independent advice, no clinical services

Working out what a program or a contract actually needs?

I work inside provider businesses every week, which is a different vantage point from the one a health service or a commissioning team usually has. Book a discovery call. You leave with an honest read on where things stand and a clear recommendation.