Occasional Paper 2010/1

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Designing the structure for Australia's health system

Public hospitals and their performance was the major health issue in the 2007 national election. The now Prime Minister, as Opposition leader, announced that he would develop a national reform plan ‘designed to eliminate duplication and overlap between the States and the Commonwealth’ and ‘to move beyond the blame game’.1 He also stated his intention to hold a national referendum to allow the Commonwealth to take over the running of public hospitals if reform could not be achieved cooperatively with the States by the middle of 2009.

The reform task, developing the long term plan for Australia’s health care system, was given to the Health and Hospitals Reform Commission, a ten person committee under the chairmanship of a paediatrician, now working as the medical advisor for a large private insurer, with ex-politicians, medical practitioners, one nurse, and others with both corporate and public sector experience.2 The Interim Report of the Commission was publicly released in February 20093 and the Final Report in June of the same year.4 The Interim Report set out 116 reform directions, ranging from specific recommendations to aspirational goals. The Committee commented that the single most controversial issue it was called to address was the split of responsibilities between the Commonwealth and States and Territories, essentially the governance, funding and operating of public hospitals. The Interim Report was released for further discussion and consultation to assist in the development of the Final Report. The Institute of Public Administration Australia, with co-sponsorship from the Academy of Social Sciences, convened a Roundtable discussion in March 2009 as part of the wider discussion. It’s focus was quite specifically on the governance issues, ‘Designing the structure for Australia’s national health system’. The Interim Report proposed three alternative structures: a continuation of current responsibilities with clearer funding mechanisms and accountability; a move to a regional health authority model; a move to social insurance with competing plans. Participants were drawn from the Commission, public and private administration, various interest groups including private insurers and the medical profession, and academia.

The aim of this paper is to provide the background to governance issues in the Australian health care system; an overview of health care financing issues; an outline of the international context; a summary of the discussions and views expressed at the Roundtable, and to offer a commentary on the recommendations of the Health and Hospitals Reform Commission.

About the Author

Jane Hall is Professor of health economics in the Faculty of Business, University of Technology, Sydney and Director of the Centre for Health Economics Research and Evaluation. Her research interests have covered many aspects of health economics, including economic evaluation studies in health services and public health. Among her current research are studies of unpaid health care, and of the nursing workforce. She was President of the International Health Economics Association 2006-07. She is well known for her analysis of developments in the Australian health care system and she is involved in health policy and planning issues both in Australia and internationally.

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