What Is a Funding Stream?

A funding stream is a specific source or allocation of funding used to support a particular service, program, activity, or population. In healthcare, funding streams can come from government programs, Medicare, commissioning arrangements, grants and other funding mechanisms. Organisations may use multiple funding streams to support service delivery and respond to changing financial and community needs. For health services experiencing funding reform, reviewing available funding streams can help identify opportunities to maintain existing services or develop new models of care.

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 the 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 increasing focus on competitive commissioning to access funds.

Identifying Public Health Funding Opportunities

Health organisations may need to consider a range of public health funding opportunities as government priorities, commissioning arrangements and service models change. Reviewing potential funding sources can help organisations identify opportunities that align with their services, capabilities and target populations. This may include government funding programs, commissioning opportunities, Medicare-related revenue and other appropriate funding mechanisms. Larter helps organisations assess these options and develop practical strategies for pursuing suitable funding.

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.

Exploring Alternative Funding Options

Exploring alternative funding options can help health and community organisations reduce reliance on a single source of revenue. The right approach depends on the organisation’s services, target population, workforce, capabilities and local funding environment. Larter works with organisations to assess potential revenue streams, develop business models and create implementation plans that support sustainable service delivery while remaining aligned with organisational priorities.

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:

Conclusion

Funding pressures can make it increasingly important for health and community organisations to review how their services are funded and identify opportunities that support long-term sustainability. A diversified approach can help organisations respond to changing commissioning environments while continuing to provide services that meet community needs.

Larter Consulting works with healthcare organisations to assess funding opportunities, develop business models, plan implementation and consider how new revenue streams can support future service delivery. By connecting funding strategy with organisational priorities and service needs, organisations can make more informed decisions about sustainable growth.

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