Health sector reform: towards a sustainable system.
8 September 2017
Dr Ayman Shenouda
A decade of reform
We’ve had a multitude of reforms over the past decade or so with much of it stemming from the National Health and Hospitals Reform Commission (NHHRC). A strengthened consumer voice and empowerment was perhaps the most important shift in the reform discussion at that time. A shift which held great promise in realising change through a more patient-centred approach and one which prioritised primary care and its role in achieving the required shifts.
During the NHHRC years of review, significant structural reform was recommended including in terms of responsibility for primary health care services as well as a more transparent and equitable funding model for public hospitals. The latter has seen some sizeable shifts, particularly in the way we determine funding to public hospitals through the introduction of activity-based funding.
We’ve seen other changes too in formalising shared policy commitment in the form of National Partnership Agreements to help set and agree upon priorities and measure progress across a range of areas.
Structure reform requirements
It’s clear that much has been done to improve the performance of Australia’s health system. But after years of review and with policy fatigue well and truly set in are we any closer to a framework which will secure the future sustainability of Australia’s health system?
Key to realising patient-centred health policy lies in structural reform to promote more integrated care. Our past attempts haven’t brought us much closer to realising this clear requirement, noting we are still implementing much of it as many reforms are ongoing. Information Technology provides certain opportunity here. The My Health Record (formerly PCEHR), as one key measure, is still being implemented and yet to deliver on its promise. As it transitions towards the planned opt-out phase mid-2018 there is still much hope that it will succeed.
Organising primary care through a medical home model of care would also support integration and provide patients with continuous, accessible, high-quality and patient-centred care. Australian general practice encapsulates the medical home model, and a supported policy shift here, if funded appropriately, together with further incentives to promote integrated care across different care settings, would bring us closer to the level of reform required to address current and future demand.
But fragmentation in health care structure exists largely due to the primary and secondary care divide. Each which is then further complicated by its own arrangements through compartmentalised funding streams. This, of course, leaves little to no room to integrate at least not to the level we need to.
Complex governance structure
It’s clear that system complexities brought about by a governance structure with responsibilities falling between the Commonwealth and the states and territories have not served the health consumer well. It’s hard to navigate and even harder for patients with complex or multiple illness or disease.
Bringing the responsibility for acute and primary care together at one level of government is one clear solution. Devolving primary care to the states and territories might just help provide the structures and incentives needed to promote integration. A way forward might be in the form of a state-level trial to integrate local hospitals and health services with primary health networks piloting integrated models in one health service/local health district.
Integrated funding and management have been suggested before, many times in fact and it wasn’t that long ago that we had a serious discussion around it from former Prime Minister Rudd, although with a Commonwealth dominated role in mind.
More recent discussions lead to a similar conclusion, that a move to a single or pooled source of government funding would help to eliminate bureaucratic cost shifting and duplication. This alongside more private sector contributions and alignment to outcomes. Integrated funding and management is one of five central policy levers available to reform Australia’s health system. The other four are around consumer empowerment and responsibility; wellness and prevention; optimised care pathways; and information-enabled health networks. 
Making it better
It is important to acknowledge that Australia has a strong system of healthcare. A high-quality universal healthcare system with coverage through Medicare to the main components of care extending across public hospitals, medical services and pharmaceuticals. The Commonwealth remains the dominant policy maker, which is due to the simple fact that it generates most of the funding. There is a complex division of roles and responsibilities across levels of government with the involvement of both public and private sectors.
The financial dependency of the states on the Commonwealth makes it harder for them to lead in this area. The required focus on outcomes likely to become a bit blurred when it is confined to funding limits and controls imposed by it. While there may exist a shared policy objective - whether that is to help people sustain and improve their health or improving quality or even equity in access - in attaining those measurable outcomes compromise is always tied to the narrow confines of what has been negotiated.
It seems the way forward comes back to a question around who’s best positioned to lead? The current division of responsibilities and roles across levels of government impacts significantly. Devolution of responsibility and funding to one level should be tested to see if integrated funding translates to integrated delivery. If we can move beyond the control being where most of the funding is generated for one moment then we might get a little closer to fixing our fragmented system. This is where we remain stuck and unless tackled we will not move forward.
 The Royal Australian College of General Practitioners. What is General Practice? Melbourne: RACGP; 2012. Available at www.racgp.org.au/becomingagp/what-is-a-gp/what-is-general-practice
 Bartlett C, Butler S, Haines L. Reimaging Health Reform in Australia. Taking a systems approach to health and wellness. PwC; 2016 Australia. Available at: https://www.strategyand.pwc.com/reports/health-reform-australia
 OECD Health Policy Overview. Health Policy in Australia. OECD; 2015. Available at: http://www.oecd.org/australia/Health-Policy-in-Australia-December-2015.pdf
 PwC 2016, op. cit., p. 22.
 PwC 2016, op. cit., p. 8.
 The Commonwealth Fund. Health Care System and Health Policy in Australia. Available at: http://www.commonwealthfund.org/grants-and-fellowships/fellowships/australian-american-health-policy-fellowship/health-care-system-and-health-policy-in-australia