AHCRA WORKSHOP 18 MARCH 2008
“IMPROVING THE AUSTRALIAN HEALTH CARE AGREEMENTS”
DISCUSSION PAPER FOR AHCRA MEMBERS
The purpose of this paper is to provide some ‘thinking points’ for AHCRA members and other Workshop attendees in considering what different approaches might be advocated in improving the Australian Health Care Agreements.
The AHCAs
The Australian Health Care Agreements (AHCAs) are five-year bilateral agreements between the Australian Government and each State and Territory Government for the provision and joint funding of public hospital services in Australia.
The current AHCAs provide for Australian Government funding of up to $42 billion in the period 2003–04 to 2007–08.1 They also require the State and Territory Governments to contribute an estimated $58 billion to public hospitals over the same period. This means that total government expenditure on public hospital services under the AHCAs over this five year period will be some $100 billion.After the Medicare Benefits Schedule (MBS), it is the largest program in the Health portfolio.
Each state and territory has a different agreement with the federal government. Copies of the relevant agreements can be downloaded here:
Australian Capital Territory (PDF 482 KB)
New South Wales (PDF 477 KB)
Northern Territory (PDF 479 KB)
Queensland (PDF 480 KB)
South Australia (PDF 477 KB)
Tasmania(PDF 477 KB)
Victoria (PDF 476 KB)
Western Australia (PDF 479 KB)
The primary objective of each AHCA is to secure access for the community to public hospital services.
In the last 20 years the Australian Government share of funding has been higher in the earlier years of the five-year health agreements and lower towards the end of the period, with State and Territory Governments’ share of funding the reverse. The Australian Government contribution now represents about 42% of the total compared to 50% in 2000.2
The indications from the Rudd Government are that it is possible that there will be a new framework for funding public hospitals developed in this term of government, and it is likely that it will go beyond hospital funding, and fund a broader range of services.
If the States and Territories do not comply with their obligations under the next round of agreements, the Australian Government has indicated that it will take over responsibility for health funding from the States, and health care will be funded nationally.
The questions for AHCRA to consider are:
Given the vision of AHCRA and AHCRA’s principles for the health system (see attached):
- what does it want to see in the next round of Australian Health Care Agreements; and
- what does it want to see in a new framework for public hospital funding into the future?
Two issues currently being discussed with regard to improving these agreements in the short term are: extending their scope and improving performance.
Scope: With regard to scope, AHCRA should support immediate moves to have the agreements broadened to cover services beyond those of public hospitals. As well as improving the integration of primary health/community based carewith hospital care, it may also be feasible in the short term to improve preventive measures, by seeking inclusion in the AHCAs of the current federal and state/territoryfunding for community-based care. In the long term, it could be proposed that, as a source of pooled funding between federal and state/territory governments, the AHCAs may provide a framework for a single pool of funding for all health care.This would require the inclusion of a considerably enhanced policy framework to complement the current funding agreement - which is merely a financial instrument. It is recognised that the Commission may develop options for new funding for health care that may see the AHCAs considerably reformed or even replaced completely.
Performance: The performance of public hospitals is currently largely based on outputs (actual services delivered) as opposed to outcomes (the impact of the services on an individual or group).2There have been calls from various quarters to develop more stringent performance benchmarks for inclusion in the AHCAs, in order to improve the accountability and transparency of expenditure, and to improve reporting on measures of outcome.
Given AHCRA’s principles, it might be expected that the Alliance would support the introduction of additional indicators around rural health, workforce, Indigenous health, consumer satisfaction, quality and safety, equity, and efficiency.
At the 2007 Summit, AHCRA called for a “common national language, benchmarks, reporting of expenditure and health outcomes”, as well as “outlining cost-effectiveness through a cost benefit analysis of all health services at both the provider and institutional level”.
There were calls in the 2007 communiqué also for “incentives for institutions and/or providers to deliver cost-effective evidence-based health care”.
“Monitoring of policy and standards and outcomes for all aspects of health services, including workforce” was sought, as was “regular reporting of these findings”. Within that,there was a proposal for clearer responsibilities to be articulated for all levels of government.
Those being the case, what specific indicators should AHCRA seek to have includedin the AHCAs with regard to outcomes?
The prime outcome of health intervention should be better health outcomes at both an individual and population level. What tools can be used to measure these?
With regard to workforce, should there be outcome measurements which are sensitive to nursing interventionsto ensure nursing supply meets patient care demand? (Given the evidence that exists about the effect of nurse staffing, skill mix and nursing workload on quality and safety of care?)4
What about other workforce indicators, such as skill mix, staff turnover, staff satisfaction and workplace injuries? (Reported in other national hospital performance evaluations).5
Given the inadequacy of current indicators that purport to measure access (limited to waiting times), what other indicators of equitable access should be included?
Other outcome indicators could include (as recommended by the ACHR report5) better evaluation of service delivery to determine the cost effectiveness of care by comparison of outcomes, equity and access of different types of providers?
What about paying for quality-should funding to hospitals and health care providers be incentivised so that payment is contingent upon quality of care? And if so, how is it possible to ensure that health professionals are not compromised when inadequate resources cause compromises in care quality? Should there be measurements/indicators for compliance with clinical guidelines? For providing education/professional development?
What about prevention? Should AHCRA support the establishment of agreed measurements/indicators in such areas as clean water, nutrition, sanitation and immunisation? Should AHCRA support the establishment of agreed measurements/indicators with regard to population health – including environmental responsibility?
What about electronic records: should outcomes measures for performance on implementation of a nationally consistent electronic health recordbe required?(This would be consistent with AHCRA’s calls for nationally consistent terminology.)
What role for the consumer i.e. what about measurements for the extent to which we are meeting realistic community expectations of services provided by the health system? These might include requirements for reporting of consumer experiences of care, as well as levels of consumer/carer participation as partners in their care.
And governance? Should sound governance be rewarded/required? What indicators might be developed to measure sound governance? Should hospitals be required to demonstrate the implementation of sound governance standards?
What about environmental responsibility? Given that hospital are major energy users (and thus emitters of greenhouse gases) and generators of waste, and what we know about the impact of climate change on human health, should there be an obligation to conduct an energy auditor assessment of hospitals’greenhouse footprintas well aswaste audits and commit to achieving percentage annual reductions in energy use/waste production/greenhouse gas emissions?
And in the long term:
Thinking beyond the public sector (given the indications that the Reform Commission will be engaged in establishing “productive relationships between the public and private health sectors”) what about the application of the performance indicators for public hospitals to measuring the performance of private hospitalsand private practitioners in the primary and secondary care sectors?
What performance measures should be in place for all health care settingsand other sources of fundingespecially those coming direct from consumer pockets, with or without rebate or subsidy from governments?
With regard to funding:
What other services might realistically be included in the Australian Health Care Agreements? Community Health services, ambulatory care centres/super clinics, stepdown facilities and rehabilitation centres, general practices, other private practices providing allied health services? As a source of pooled funding between federal and state/territory governments, could the AHCAs represent a framework for a single pool of all funding for health care?
What about the other funding mechanisms for health? How might the MBS and PBS appear in a reformed system?The Public Health Outcomes Funding Agreements (PHOFAs)?
Where would local government expenditure on health sit within a reformed system – the Dept of Infrastructure? Veteran’s Affairs?
There will be many more questions raised at this workshop, and AHCRA intends to develop a paper outlining some of the areas where consensus is able to be achieved on improving the AHCAs for circulation to the membership and subsequently to the Health Ministers and the National Health and Hospitals Reform Commission.
Please contribute to this work by sharing your ideas at the Workshop, or afterwards by email to the executive.
References
1House of Representatives Standing Committee on Health and Ageing, Review of Auditor-General’s Report No.19 (2006-2007) – Administration of State and Territory Compliance with the Australian Health Care Agreements, Parliament of the Commonwealth of Australia, August 2007.
2Steering Committee for the Review of Government Service Provision, Report on Government services 2008, Productivity Commission, Commonwealth of Australia.
3ibid.
4The Alliance for Health Reform,Rewarding Quality Performance: The Role of Nursing, March 2007. Available at:
5Australian Centre for Health Research, Evaluating health outcomes in Australia’s healthcare system: A scoping study of potential methods and new approaches, Report prepared by Insight Economics Deloitte, June 2007.
ATTACHMENT A
AHCRA PRINCIPLES
The principles underpin the values of the Alliance and are supported by the full membership.
Vision: A health system that assists individuals to be healthy and delivers compassionate and quality health care to all.
Access
- Health care is a right and should be available on the basis of need not the ability to pay.
- All should have access, in a timely manner, to services that maintain and support health and offer quality health care to those in need.
- Revenue from taxation should be used to fund health care services that provide equity of access and outcomes.
Primary Health Care
- Modern health care systems should be designed to optimise the utilisation of health promotion and preventive strategies and those that allow early diagnosis and treatment to minimise the development of chronic disease.
- Health care systems should provide support so that individuals and can optimise their own health.
Community Engagement
Health care systems must be built on a partnership between the Australia Community and consumers.
- Health care policy must be grounded in and measured against community values; and changes to the health care system must be derived from the Australian community to ensure that they are informed and ready to embrace change.
Equitable Outcomes
- Inequity and injustice in the delivery of health care are undermining Australia as a nation and must be reversed.
- The appalling health status of Australia’s Indigenous community must be addressed urgently
- An equitable health care system will ensure that those with special needs, including, for example, people with disabilities and those whose access to healthcare is restricted by cultural, linguistic or geographic factors enjoy health outcomes equivalent to that of the general community.
- Social determinants (from poverty to the state of the environment) impact on the health of an individual or community. Investment to address these determinants must be built into Australia’s planning for healthcare
Workforce
- Australia must have a policy that extends beyond ‘self sufficiency’ to see us not only capable of training the health professionals needed to care for our community but also able to contribute to the health of our region of the world.
- Health workforce planning should result in the development of professionals who can provide quality services in a culturally sensitive manner to cater for the diversity that characterises modern Australia.
Efficiency
- Health care reform must remove the jurisdictional inefficiencies associated with the divided health care responsibilities of our State and Federal governments.
- Health care should be based on the best available evidence and delivered by the most appropriately skilled health professional.
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