Is headspace making a difference to young people’s lives?

Appendix B
headspace and non-headspace contributions to overall service costs
The combined value of headspace centre based operating costs and hNO central administration
costs allow the project team to estimate costs of headspace funded services as part of the overall
headspace service model. These costs reflect a mix of the cost per occasion of service as well
as the administrative and infrastructure costs associated with the delivery of services through
headspace centres.
However, headspace sourced administrative costs data (the hCFA/ hCSA) do not include nonheadspace
funding sources. Analysis by hNO has shown that only 36% of occasions of service
recorded in hCSA between January and June 2014 were funded directly by headspace. The
majority of occasions of service provided at headspace centres are funded by the MBS (45.5%)
through leveraging off the headspace infrastructure. This observation has important implications
for the ability of the evaluation to address its original goals as access to data concerning funds
administered outside of the headspace grant and costs recorded outside of the hCSA were not
available to the evaluation team.
The headspace model deliberately partners headspace with other organisations. Excluding the
contribution of non-headspace funding sources from the economic evaluation of the effectiveness
of headspace would substantially reduce the scope of the cost-effectiveness analysis given the
complementary nature of the design of the headspace service model. The rationale for the inclusion
of non-headspace funding sources as part of the headspace model has been discussed with the
Department, and the evaluators were directed to estimate the MBS contribution to headspace. Lead
agency financial information was beyond hNO jurisdiction for the purposes of the evaluation as it
was property of legal entities that are independent of both the Department and hNO. This is why this
information is missing from the costing of the existing centre allocation model, and why it may also
be absent from any estimates of costs for alternative models if such work were to be undertaken
in the future by an external party. These data have never been within the reach of the evaluation.
Information about these non-headspace funds is not routinely collected by headspace and is not
available to the evaluation team in the administrative datasets supplied to support our analysis.
This represents a threat to the generalizability of the evaluation findings as two-thirds of occasions
of service related to headspace service delivery are paid for from non- headspace funds, with
considerable variability observed across headspace centres. It is also important to note that records
of occasions of service (hCSA) do not record the cost of these services, only the source of funds.
Costs are thus difficult to identify and measure given the diversity and complexity of headspace
centre third party models. The cost of operating headspace centres can be borne by the
government, clients and/or the operating party. Government costs can consist of headspace funding
(for occasions of service, intake workers and supporting infrastructure), MBS funding and potentially
other government grants to centre operations. The ability to observe and collect information about
these costs and distribute them at a per unit level for an individual headspace service is challenging,
and no costs other than those provided by the DoH under the funding model have been included in
this report.
Implications of current funding model
The current funding model is highly specified and relatively inflexible in relation to headspace grant
funding. For example, a number of headspace centres in metropolitan areas (i.e. Camperdown,
Collingwood and Parramatta) have youth populations of over 100,000 within 10 km whereas a
number of regional headspace centres have total service populations of less than 5,000 within 10
km. That is, service populations within 10 km of some urban headspace centres can be twenty
times greater than some regional centres. The current funding model is, however, quite tightly
constrained and these centres receive broadly equivalent funding despite the wide variation in
size of their respective service populations. The allocation of centres to regional locations reflects
a number of factors, including equity of access and potentially greater need per capita, but these
inequalities suggest a need for closer examination of the current centre allocation and funding
models. Greater flexibility in centre level funding, which reflects client demand, may allow for more
efficient and effective service delivery.
Social Policy Research Centre 2015
headspace Evaluation Final Report
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