Joint Ministry of Health and ACC funding model for Emergency Ambulance Services

The Ministry of Health and the Accident Compensation Corporation (ACC) work together to purchase and fund emergency ambulance services for New Zealand.  Over the last few years NASO has been working with the sector to develop more consistent funding joint approaches.

The Ministry of Health purchases the services from funds provided by government in its annual appropriation.  ACC’s purchase of the services is mostly funded by ACC levies and to a lesser extent by an appropriation from government to cover non-earners.

Together they contract with service providers for the three essential components of these services.

Ambulance Communications Centres

These centres receive and prioritise all 111 calls for ambulances, provide clinical advice and/or onward referral for those who do not need an emergency ambulance, and authorise and dispatch the resources (ambulance clinical personnel and transport) needed for all others.

The Ministry of Health and ACC bulk fund the Ambulance Communications Centres, paying fixed sums each quarter. The Ministry of Health contributes 64% of the total funding from the Crown and ACC 36%. This funding is expected to cover the costs of the centres without the need for providers to seek charitable contributions towards costs of these services.  This funding model has been in operation for several years.   

Emergency Road Ambulance Services

Since 1 December 2014 the Ministry of Health and ACC fund these services by fixed quarterly payments. ACC no longer makes any fee-for-service payments for emergency road ambulance services.       

ACC’s portion of these fixed quarterly payments is expected to cover 40% of the total costs of the services. The Ministry of Health’s portion makes a sizeable contribution towards, but does not fully cover the other 60% of service costs. The two providers of emergency road ambulances – St John and Wellington Free  –  raise the rest of the funding needed (around 18%) to cover their total costs through part charges to service users (for non-injury related conditions), donations from the community, and sponsorships.   

This funding model recognises that both organisations need to provide for the fixed costs of providing 24/7 response capability.   

Emergency Air Ambulance Services

This Ministry of Health-ACC funding model was implemented on 1 April 2013. It provides each air operator with fixed monthly payments irrespective of the number of hours flown, and fee for service payments for each hour flown.   

The fixed monthly payments contribute to the fixed costs of providing the service. They are calculated from the number of flying hours each provider completed for the Ministry and ACC in the 2011/2012 financial year and are fixed for the five year term of the contract.

ACC and the Ministry of Health pay (the same) hourly rates/fee-for-service prices for each aircraft type. The fee for service payment is based on average variable costs of flying for each aircraft, including clinical crew.

Collectively air ambulance services rely on community donations and sponsorships for over 50% of the revenue they need to cover their costs. There is wide variation between providers in the percent of income they receive from the community.

$ Million excluding GST

2012-13

2013-14

2014-15- Provisional

Emergency Ambulance Services funding paid by the Ministry of Health and ACC

 

MoH

ACC

Total

MoH

ACC

Total

MoH

ACC

Total

Emergency Road Ambulance Services

67.0

51.1

118.1

67.5

53.1

120.6

67.9

63.3

131.2

Ambulance Communications Centres

15.0

8.6

23.6

15.1

8.7

23.8

15.4

8.8

24.2

Emergency Air Ambulance Services

4.7

12.2

16.9

6.8

12.7

19.5

 TBC*

 TBC*

 TBC*

Total

86.7

71.9

158.6

89.4

74.5

163.9

     

Table notes:

  • ACC expenditure based on payment date
  • MoH expenditure based on service date
  • Funding of specific projects and initiatives not included
  • * Final expenditure is dependent on service volumes provided
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