Activity Based Management Project

Together with Canberra Health Services, we are using activity based management (ABM) to improve our management of health services across Canberra. ABM uses hospital services data in approaches to providing patient care, service planning, decisions on resource allocation, research, innovation and workforce planning.

ABM is enabled by the costing and patient data that Activity Based Funding (ABF) puts in place. 

The ACT Government is working towards introducing ABF for funding of public hospitals in Canberra.

Activity based funding

ABF is a way of funding hospitals and clinics for the number and mix of patients they treat. It is an alternative model to block funding hospitals with a budget that changes every year based on the budget cycle. ABF also takes into account that treatment for some patient groups is more complicated and resource intensive than for others.

In 2011, the Council of Australian Governments agreed to move to ABF as part of the National Health Reform Agreement.

Advantages of activity based funding

The key advantage of ABF over a block-funding approach is that funding is transparently linked directly to health service delivery.

The transparency of ABF encourages all members of the health system to work together to identify the best possible care for patients. This minimises gaps and inefficiencies in services and improves outcomes for patients.

What will be funded by activity based funding

ABF will apply to patients who visit emergency departments, walk-in centres or are admitted to a hospital. Services such as public health will continue to be funded through the normal budget processes.

ABF funded Block or budget funded
Admitted acute care

Non-admitted home delivered respiratory ventilation

Admitted mental health care Teaching, training and research
Admitted sub and non-acute care Non-admitted mental health care
Non-admitted care, subject to eligibility criteria Non- admitted child and adolescent mental health care
Emergency department care Public health

Starting activity based funding in the ACT

Over the next few years, we will be working closely with Canberra Health Services, ACT Treasury, clinical stakeholders and the ACT Health Care Consumers’ Association to design, develop and implement an ABF model suitable for the ACT context.

The ACT Government has introduced what we are calling an ABF shadow budget for 2023-24 that is based on an ABF framework. The shadow budget will be used to test the suitability of the model in the ACT context.  It will help us assess the system readiness for full implementation of ABF in either July 2024 or 2025. The shadow budget is a desktop exercise and is not affecting hospital funding.

Graphical roadmap of the Activity Based Funding project.

Additional information about activity based management


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Page last updated on: 22 Aug 2023