Funding stream diversification – a hot topic

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Many service providers are being impacted by funding reform and some are or will be experiencing significant reductions in traditional sources of public funding. Larter worked with community health services, public health services (hospital networks), general practices and Primary Health Networks about opportunities to develop and implement new service models that tap into alternate revenue streams. Some health services are interested in maintaining services at risk, while others are interested in providing new services to their communities.

For example, many public community mental health services are experiencing increasing demand for allied health services yet traditional funding mechanisms are either not increasing at the rate needed to meet demand or are actually decreasing. Furthermore, services are facing increasing competition for funds as the primary mental health market evolves in response to Australian Government’s response to the Contributing Lives, Thriving Communities – Review of Mental Health Programmes and Services report, authored by the National Mental Health Commission. Funds are earmarked to be redirected from acute services to community prevention and early intervention programmes over the next three years, with an increasingly focused on competitive commissioning to access funds.

Larter has worked with clients to review the opportunities for public mental health services to expand their income streams by using Medicare and other initiatives. The Medicare Benefits Schedule and other alternate primary health care funding provide an opportunity to attract additional revenue to supplement ongoing shortfalls in revenue.

Funding stream diversification is also particularly important for ambulatory care managers in public health services (hospital networks) and for community health allied health teams.

Developing new revenue streams

In a world of constant health reform it can be risky for health services not to explore the potential that new funding streams can offer. When we say new funding streams we not only mean brand new streams, but also streams that have been around for many years but have not been accessed by many organisations. Larter has proven methodologies for helping organisations understand which funding streams may be relevant, and then how to design and implement processes, systems and change management strategies to successfully attract that funding. For example, in our experience, much has been learnt by tens of organisations trying to access Medicare funding streams in the last ten years and it is critical that organisations understand these lessons rather than repeat past mistakes, because early success breeds confidence among staff and boards that innovating is worth the risk and effort.

Larter can support health services with funding stream diversification by:

  1. Scoping potential funding streams and commissioning opportunities
  2. Making recommendations about which streams would be the ‘best fit’ for what the organisation wishes to pursue, in line with their values and target clientele
  3. Developing implementation plans and/or business models
  4. Providing financial forecasts of three to five years
  5. Supporting the development of innovative service models for future consideration within commissioning of primary mental health funding.

You can read more about other projects where Larter has supported clients to explore funding opportunities:

Latrobe Community Health Service

Plenty Valley Community Health general practice clinic


Contact Peter Larter to discuss your needs and how we can support your organisation to explore new revenue streams for service models.


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