AHCRA Background briefing – the progress of health reform

How has thehealth system reform agenda progressed?

The current health reform agenda was initiated by the federal Labor Government on its election in 2007. The Government established the National Health and Hospitals Reform Commission (NHHRC) which undertook an overall review of the health system and produced a detailed report in 2009 making 123 recommendations for health system reform. The Government's response to this report forms the basis for the health reforms currently being planned and implemented.

The report omitted some key health policy issues, for example the current inequity in access to health care and the inefficient subsidies for private health insurance. However, despite this, AHCRA believes that many of the planned reforms announced have significant potential to improve the equity, effectiveness and efficiency of our health system. Some have been amended in negotiations with the States, but AHCRA considers the following of these reforms have the potential to create positive change.

  • The agreed COAG reforms, including the clarification of the Commonwealth’s funding responsibility for public hospitals (50% of the cost of growth from 2017/18), should create a greater level of incentive for the Commonwealth make sure prevention and early intervention are more effective and hence reduce preventable (and more expensive) hospitalisations.
  • The planned Local Hospital Networks have the potential to link hospitals with community-based health care and provide a more coordinated and locally responsive system of health care.
  • The formation of Medicare Locals could enable more rational primary care planning and a focus on developing a multi-disciplinary approach to delivering primary care services that better meets our current health care needs. They also have the potential to address some of the current inequities in access to primary care (but need a much stronger policy vision and significant funding in order for them to facilitate change).
  • Changes to hospital funding, including the adoption of the Casemix model and the establishment of an independent pricing authority, should result in a more efficient and transparent approach to resource allocation in the hospital sector. This should support improvements in performance across the hospital system, as has happened in Victoria.
  • A focus on national monitoring of quality of care and performance standards should result in greater accountability to the community throughout the health care system and increased overall performance.
  • Expanded roles and more funding for nurse practitioners, midwives and practice nurses should provide greater choice to consumers and result in a more efficient use of our health workforce.
  • E-health initiatives, such as person-controlled electronic health records, should support the delivery of more coordinated care and facilitate greater consumer engagement in their health care.

However, the way in which the above reforms are implemented is critical to their success. Some of the major implementation problems with the above initiatives and the health reform agenda overall are as follows.

  • The Blame Game has not really been adequately addressed, with earlier proposals for the Commonwealth to take over a majority of hospital and al of primary health care funding being lost in the latest COAG agreement in February 2011. This retains multiple funders and significantly reduces Commonwealth incentive. Medicare Locals will be especially handicapped by this, needing to negotiate or rely on both State and Commonwealth.
  • The issue of equity of access to care and health outcomes – one of the key issues requiring reform - , has not been significantly addressed in the reforms.
  • There is a lack of an overall vision for how the health system in the future will look or aspire to. The reforms are fragmented and implemented in isolation. This is not likely to result in a more integrated and coordinated system – one of the major goals of health reform
  • There is an insufficient focus on prevention and primary care, despite the fact that reforms in these areas could deliver the greatest benefits in terms of efficient use of resources and improving health equity. The Commonwealth’s back down on taking full funding responsibility for primary health care is a major setback in the journey towards a more effective and equitable system.
  • Indigenous health remains under-resourced and has not been addressed in a major way by the reforms.
  • Oral health has been largely ignored, another major area of system failure, and in particular there is no proposal to establish a national public dental health system.
  • The current inefficient subsidies to private health insurance have been ignored, e.g.increasing inequity, and drawing both funding and workforce away from the public system.
  • Consumers’and carers’ roles in health care and the health system are paid inadequate attention. Although their role on LHNs and Medicare Locals has been acknowledge (a step forward) there is little other action to address health literacy or to ensue that services are more consumer-focussed with strong consumer participation.
  • Social determinants of health are virtually ignored, despite the fact that these have a major influence on health outcomes.
  • A large amount of funding has been provided to the states/territories to persuade them to sign up – this money will be largely wasted if the reforms do not result in significant improvements. Most of the money will fund short-term care only – welcome in the way that more buckets are in a storm but making little impact on mending the leaks.

What needs to happen now?

Health reform is a slow process that will take many years. However, while progress may seem slow during these initial stages, the changes being made now are critical as they set the foundations required to support future health system changes. Addressing the implementation problems above is crucial in order to deliver the stated aims of health reform. Barriers to achieving this goal include political issues, specifically the relationship between the jurisdictions, which makes transferring funding and responsibility from one level of government to another very difficult, the vested interests of various groups which benefit from current arrangements and who work against making changes, and the overall complexity of the health system which makes it difficult for consumers to understand the implications of various reform measures.

References

Australia's Health 2010 Australian Institute of Health and Welfare 2010

A Healthier Future for All Australians Final Report of the National Health and Hospitals Reform Commission

What is AHCRA?

The Australian Health Care Reform Alliance (AHCRA) is a coalition of over 40 organisations representing consumers and health care providers advocating for a fairer and more effective health care system.

More information about AHCRA can be found at