National Health Reform

A National Health and Hospitals Network for Australia's Future

Overview

The Commonwealth Government’s National Health Reform Plan will deliver the most significant reforms to Australia’s health and hospital system since the introduction of Medicare and one of the biggest reforms to the federation in its history.

This document sets out the architecture and foundations of the Government’s historic NationalHealth Reform Plan, which will deliver major structural reforms to establish the foundations of Australia’s future health system.

These major structural reforms will mean that the Commonwealth Government:

• becomes the majority funder of public hospitals;
• takes over all funding and policy responsibility for GP and primary health care services;
• dedicates around one third of annual Goods and Services Tax (GST) allocations currently directed to state and territory governments (referred to throughout this document as‘states’) to fund this change in responsibilities for the health system;
• changes the way hospitals are run, taking control from central bureaucracies and handing it to Local Hospital Networks; and
• changes the way hospitals are funded, by paying Local Hospital Networks directly for each hospital service they provide, rather than by a block grant from the Commonwealth to the states.

These reforms focus on improving public hospital and primary health care services, since these services underpin Australia’s entire health system. They will drive major improvements in service delivery as the Government goes about building a new health and hospital system for the future. The reforms will build on the strengths of our current health system, such as access to primary health care through Medicare, and free public hospital treatment for public patients, and ensure that these pillars of the Australian health system remain sustainable into the future.Most importantly, they will build on the skills, experience and ingenuity of the Australians who work on the front line of our health and hospital system.

The National Health Reform Plan will build on the major health reforms the Government has already delivered: record funding for public hospitals, increased numbers of elective surgery
procedures, taking the pressure off emergency departments, and a record investment in training more doctors and nurses.

Reform is necessary if we are to continue to deliver high quality health care. Our current health care system is fragmented, contributes to cost‑shifting between different levels of government, involves too much waste, and results in long waiting times for patients.

Our rates of hospital admission are much higher than comparable countries, indicating we can do better at keeping people healthy in the community.The health care system also faces a formidable set of future challenges — an ageing and growing population, rapid innovations in technology that drive increased health costs, and growth in the burden of chronic disease.

Without reform, these challenges will put governments around the country under increasing fiscal pressure, add to the workload of already overstretched staff and lead to longer waiting times. Moreover, there is a real risk that state governments will be overwhelmed by their rising health spending obligations, as a result of rapidly rising costs for health and hospitals and narrower, less efficient taxes — putting our health system at risk. Reform ofthe nation’s health care system — if it is to provide a sustainable funding model for health and hospitals — must involve reform of the nation’s finances.

In implementing its reforms, the Government recognises the importance of continuing the role that private hospitals and other private health care providers play in delivering strong health outcomes.

The Government is prepared to address the current and future challenges facing our system.This reform package builds on the recommendations of the National Health and Hospitals Reform Commission (NHHRC), and more than 100 consultations the Government has conducted with health professionals and the community. It represents the system-wide reforms upon which additional investments will build over the course of 2010. This reform package is the position the Government will take to states for their agreement at the next meeting of the Council of Australian Governments (COAG) in April.back to top