The Commonwealth strengthens its grip on healthcare funding
Reform of the Australian healthcare sector was the big news item in Australia this week at a contentious meeting of the Council of Australian Governments (COAG), which sought to agree a more centralized approach for funding and coordinating the many players in Australia's fragmented healthcare sector.
GOAG reported “an historic” agreement, where the Commonwealth will lift its share of funding for the country's 750 public hospitals to 60% (via a reallocation of GST revenues from the states) and implement a new nationwide case-mix funding model. Policy and operational responsibility for public hospitals will remain with state and territory governments, while the Commonwealth will assume full policy and funding responsibility for general practice, primary healthcare, and aged care.
To sweeten the deal the Commonwealth tipped in A$5.4 billion worth of new sub-acute care beds, additional healthcare professionals, and a range of programs in aged care and mental health.
Bureaucracy is a growth sport
Implementation is scheduled from 2011, with the gist of the new administrative arrangements being as follows:
- Public hospitals will in the future be managed individually or in small groups by Local Hospital Networks (LHNs) with governing councils appointed by state and territory governments.
- A new Independent Hospital Pricing Authority (IHPA) will be created to set the National Efficient Price for every public hospital service. The proposed activity based costing case-mix approach has successfully operated in Victoria since the mid 1990s, and will be used to drive uniform efficiency standards across the LHNs.
- A National Health and Hospitals Network Fund (NHHNF) will be administered by the Commonwealth to supply the 60% funding to state-based Funding Authorities, which will administer funding to the LHNs, with state governments making up the additional 40%.
- Commonwealth funding will be limited by the National Efficient Price of public hospital services - but will also explicitly include funding for costs not well accommodated in the case-mix model, such as R&D, training, and capital expenditure, and also block payments for hospitals where case-mix is inappropriate (an important lesson learned from Victoria).
- Primary Healthcare Organisations (PHCOs) will be created to become the primary healthcare partners of LHNs. The aim is for PHCOs to improve access to, and integration of, primary care at the community level. These will be non-government bodies.
- A new National Performance Authority (NPA) will be created to monitor the performance of LHNs and PHCOs under a new Performance and Accountability Framework - including National Standards, Hospital Performance Reports and Healthy Community Reports.
This many acronyms will add up to lots of new job opportunities in the bureaucracy - with the government's statements to the contrary smacking of a triumph of hope over experience.
E-health remains a regional and local game in Australia
The impact of the reform package on the e-health agenda is to reinforce the currently fragmented state-by-state, regional, and hospital-by-hospital arrangements. LHNs will call the shots with regard to decisions on hospital administration and clinical care systems. The COAG meeting did not provide any further clarity around a national e-health strategy beyond noting the importance of working towards a National Individual Electronic Health Record system. Crucially, there was no statement regarding how this would be funded. Notwithstanding the sector-wide facilitation role of the National E-Health Transition Authority (NEHTA), the e-health agenda in Australia remains a regional and local game.
ICT opportunities will exist in the new administration systems
The reform package involves the creation of two new Commonwealth agencies (IHPA and NPA) and a wide range of new administration, finance, and performance management systems throughout the sector. This will create opportunities for vendors at both the national and local levels to supply systems for the new agencies and for the LHNs, PHCOs, and state-based Funding Authorities. Stay tuned for the RFTs. Is that an “LHN cloud” we can see on the horizon?
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Autor(en)/Author(s): Steve Hodgkinson
Quelle/Source: Ovum, 23.04.2010
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