National Health Reform

A National Health and Hospitals Network for Australia's Future

5.2 Taking full funding and policy responsibility for GP and primary health care

The Commonwealth Government will take full policy and funding responsibility for GP and primary health care services in Australia.

This important structural change to roles and responsibilities within the health system means that one level of government — the Commonwealth — will be responsible and accountable for the strategic direction, planning and public funding of primary health care, as recommended by the NHHRC.

Currently, the Commonwealth subsidises privately provided GP and some nursing and allied health services. States provide a range of services including community health centres,
subsidised GP clinics, allied health services, child and maternal health clinics, drug and alcohol services, and community mental health services.

Over time, this arrangement has resulted in duplication of effort by Commonwealth and state governments in some areas and delivery gaps in others. Consequently, primary health care services are not as effective as they need to be. This means that many patients — particularly those with chronic and complex conditions, and those who are most disadvantaged — end up in hospital, when they could have received better care in the community.

The failure to provide adequate care in the community puts pressure on our hospital services. Australia’s hospitalisation rate is higher than many comparable countries. In 2007–08, there were an estimated 441,000 hospital admissions each year (9.3 per cent of total admissions) that could have been avoided through providing better care in the community.

As a result of taking full funding responsibility for all GP and primary health care services, the Commonwealth will be able to draw services together so they are better integrated, better coordinated, and more responsive to the needs of patients. In practice, this may mean being able to bring state community health services and Commonwealth funded services together in the one setting, such as a GP Super Clinic.

Locating primary funding responsibility for all GP and primary health care services with the Commonwealth Government will allow services to be provided in the most appropriate care setting for the patient, breaking down the artificial barriers that are created by having multiple funders. This change will:

• improve the efficiency of the system;
• reduce cost‑shifting and blame‑shifting, as the Commonwealth Government will be clearly accountable for GP and primary health care services in Australia;
• allow the Commonwealth to reduce duplication of services, improving efficiency and reducing waste in primary health care; and
• make it easier for patients to receive the services they need, improving patient outcomes.

Some hospital outpatient services are better characterised as part of the primary health care system. Within its new hospital funding arrangements, the Commonwealth will initially fund 60 per cent of the cost of these ‘primary health care equivalent’ outpatient services, and move over time to fund up to 100 per cent of the efficient price of these services. This change will make the Commonwealth Government financially responsible for ensuring that patients who do not need to visit a hospital can receive treatment in more convenient and less costly locations.

The Commonwealth will work with states to implement these new arrangements, including setting appropriate boundaries between primary health care and acute care, and primary health care and community care, including the Home and Community Care Program.back to top