Making activity-based funding work for mental health

The implementation of activity-based funding (ABF) in mental health from 1 July 2013 has significant risks and benefits. It is critical that the process of implementation is consistent with Australia's cherished goal of establishing a genuine and effective model of community-based mental health care. The infrastructure to support the application of ABF to mental health is currently weak and requires considerable development. States and territories are struggling to meet existing demand for largely hospital-based acute mental health care. There is a risk that valuable ABF-driven Commonwealth growth funds may be used to prop up these systems rather than drive the emergence of new models of community-based care. Some of these new models exist now and this article provides a short description. The aim is to help the Independent Hospital Pricing Authority better understand the landscape of mental health into which it now seeks to deploy ABF.