Frequently Asked Questions for Consumers

• NHRA FAQs for Consumers (PDF 61 KB)

What is the National Health Reform Agreement and what will it do?
Why do we need another health agreement? Didn’t we have a health care agreement in 2010?
Why do we need health reform?
What does the efficient growth in public hospital services mean?
What financial benefits will state and territory governments receive under National Health Reform?
Hospitals
What specific services will improve under the National Health Reform Agreement and the National Partnership Agreement on Improving Public Hospital Services?
Who will be responsible for hospital services?
What will Local Hospital Networks do?
How are Local Hospital Networks an improvement from the previous system of area-wide health services?
How will the new financing arrangements effect rural hospitals?
National Standards and Performance
How do these reforms bring increased transparency in our health system?
How will the Performance and Accountability Framework lead to improved service provision?
What will the National Health Performance Authority do?
What does the Performance Accountability Framework mean for health consumers?
How will the performance of hospital services provided by the private or non-government sector be monitored?
What will happen to under-performing hospitals and health services?
GP & Primary Health Care
What will Medicare Locals do?
What do Medicare Locals mean for patients?
Will Medicare Locals provide services?
How do GP Super Clinics complement existing health services?
Aged Care
Why is the current aged care system changing?
How will National Health Reform improve the aged care system?
What changes will there be to the delivery of aged care services?
Mental Health
How does the Australian Government’s $2.2 billion investment in mental health reform link with broader health reform?

What is the National Health Reform Agreement and what will it do?

The National Health Reform Agreement is a nation-wide agreement which will improve the transparency, governance and financing of Australia’s health care system. Under this Agreement the Commonwealth will fund half the efficient cost of delivering public hospital services.

National Health Reform will:

• invest an additional $19.8 billion in public hospital services over this decade;
• reduce waiting times for emergency departments;
• ensure all patients receive elective surgery on time;
• allow all Australians to see how their hospitals and Medicare Locals are performing;
• give local communities and clinicians a greater say in the delivery of local services; and
• strengthen the primary health care system through the creation of Medicare Locals.

Why do we need another health agreement? Didn’t we have a health care agreement in 2010?

The National Health Reform Agreement differs from the National Health and Hospitals Network Agreement by providing greater focus on equal sharing of responsibility for the funding of the growth in costs of public hospital services into the future.

The National Health Reform Agreement will provide more direct and simplified funding for public hospital services, based on the efficient price of providing those services.

Under the 2010 agreement, separate funding authorities were to be established in each state and territory to receive funds from the Commonwealth and the relevant state/territory government. The National Health Reform Agreement will ensure that there are more streamlined, collaborative, flexible and transparent funding processes through the creation of a single National Health Funding Pool, with an independent Administrator who will oversee both the Commonwealth and state and territory funding of the public hospital system.

Why do we need health reform?

Australia has a good health system but we need to prepare it for the challenges of the future.

There are increased demands on our health and aged care system due to new treatments becoming available, an ageing population, increased rates of chronic and preventable disease and rising health care costs.

Without this reform, state and territory government budgets will be overwhelmed by their rising health spending obligations and their ability to provide the current range of services will be significantly strained.

State and local governments experienced growth in health spending of around nine per cent per year over the five years to 2009-10. This contrasts with growth in state and local government tax revenues of around six per cent a year over the same period. Projections show that by 2045-46, health spending alone would be more than all revenue collected by state and local governments.

The Commonwealth Government has taken action to address these challenges, working with states and territories to secure a truly national agreement on health reform.

The Commonwealth, states and territories have agreed to major reforms to the organisation, funding and delivery of health and aged care. These reforms will provide better access to services, improved local accountability and transparency, greater responsiveness to local communities and a stronger financial basis for the health system into the future.

The National Health Reform Agreement will improve access to care, drive improved efficiency, increase public information to enable comparison of health service performance and ensure more transparent funding of public hospitals based on services delivered and the efficient cost of delivering those services.
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What does the efficient growth in public hospital services mean?

Efficient growth in public hospital services means the efficient cost of delivering additional services. It takes account of both increased numbers and kinds of services, and increases in the efficient cost of delivering services.

What financial benefits will state and territory governments receive under National Health Reform?

The Commonwealth has guaranteed to provide at least $16.4 billion in additional funding for public hospitals over the period 2014-15 to 2019-20. This is in addition to the contribution the Commonwealth Government would otherwise have made to base funding under the National Healthcare Specific Purpose Payment arrangements.

Under this package, the Commonwealth will increase its contribution to efficient growth funding for hospitals to 45 per cent in 2014-15, increasing to 50 per cent from 2017-18.

This means that from 2017-18 the Commonwealth will fund half of every dollar required to meet increases in the efficient cost of public hospital services, including growth in demand.

This will make the Commonwealth an equal partner in funding the growth of public hospital services for the future.

The Commonwealth will also invest up to $3.4 billion under the National Partnership Agreement on Improving Public Hospital Services for states and territories to reduce emergency department waiting times, help ensure elective surgery patients are treated on time and expand the number of sub-acute beds.

Hospitals

What specific services will improve under the National Health Reform Agreement and the National Partnership Agreement on Improving Public Hospital Services?

In order to reduce long waits for both elective surgery and emergency department treatment, all public hospitals around Australia will be working towards meeting the new National Elective Surgery Target and the new National Emergency Access Target. These targets will mean that all patients will receive elective surgery on time and 90 per cent of patients will receive treatment in their emergency department within four hours. The remaining 10 per cent reflects patients for whom it is clinically appropriate to remain in emergency departments longer than four hours.

The National Partnership Agreement on Improving Public Hospital Services will provide states/territories with:

• up to $800 million to meet the National Elective Surgery Target;
• up to $750 million to achieve a four hour National Emergency Access Target in public hospital emergency departments;
• up to $1.6 billion for new sub-acute beds; and
• up to $200 million for capital and recurrent projects across elective surgery, emergency departments and sub-acute care.

Who will be responsible for hospital services?

As managers of the public hospital system, state and territory governments will ultimately be responsible for the performance of public hospitals. State and territory established Local Hospital Networks will ensure that the performance of hospitals is accountable and responsive to the needs of their local communities.

What will Local Hospital Networks do?

Local Hospital Networks will ensure that the management of public hospitals is accountable and responsive to the needs of the local community.

Local Hospital Networks will be responsible for making decisions on the day-to-day operations of hospitals within their network. This includes planning at the network level to deliver on performance standards and manage budgets. Local Hospital Networks will be responsible for delivering agreed services and meeting performance standards.

Local Hospital Networks will have greater flexibility to shape local service delivery according to local needs.

Public hospital services will be provided under service agreements negotiated between each Local Hospital Network and the respective state or territory government. State and territory governments will also be responsible for providing system-wide service planning and performance management including disseminating best practice, and identifying and remediating poor performance.

Local Hospital Networks will be established throughout Australia.
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How are Local Hospital Networks an improvement from the previous system of area-wide health services?

The devolution of management accountability from a central, system wide approach, combined with paying hospitals based on the services they provide, will provide incentives for local managers and clinicians to increase service levels and reduce costs.

The establishment of Local Hospital Networks will also mean that a local hospital should no longer have to seek the approval of a large bureaucracy for matters that relate to the day-to-day delivery of hospital services.

Local Hospital Networks will overcome the fragmentation and duplication that would come from individual hospitals operating independently from each other and also avoid the centralised controls and excess layers of bureaucracy that characterise some systems.

Local Hospital Networks will also work with the new Medicare Locals (which are responsible for coordinating local primary health care delivery) to identify and address particular local needs and to ensure continuity of care for patients between hospital and primary health care services.

How will the new financing arrangements effect rural hospitals?

To ensure rural and regional communities continue to have access to vital public hospital services small rural and regional hospitals will continue to be block funded.

National Standards and Performance

How do these reforms bring increased transparency in our health system?

National Health Reform will give Australians more information about the performance of their health system, allowing them to access transparent and nationally comparable performance data and information on local hospitals and health services, including:

• information about public hospitals and private hospitals on the MyHospitals website – online since December 2010; and
• information on the performance of hospitals and primary health care services, which will be produced by the new National Health Performance Authority (NHPA) in their Hospital Performance Reports and Healthy Communities Reports. Healthy Communities Reports will report on primary health care performance.

How will the Performance and Accountability Framework lead to improved service provision?

A new Performance and Accountability Framework (PAF) has been developed to provide Australians with information about the performance of their health and hospital services in a way that is nationally consistent and locally relevant.

The PAF will introduce transparent performance reporting across a range of performance indicators, including new service and financial performance standards. Over time, these reports will lead to the development of new national standards which will drive improved performance across the health system.

What will the National Health Performance Authority do?

The National Health Performance Authority (NHPA) will report quarterly on the performance of every Local Hospital Network and the hospitals within it, every private hospital and every Medicare Local through Hospital Performance Reports and Healthy Communities Reports.

The performance measures and standards contained in the PAF will allow the NHPA to identify high-performing Local Hospital Networks, Medicare Locals and hospitals to enable the sharing of innovative and effective practices while also identifying those that are under-performing to enable effective performance management.

What does the Performance Accountability Framework mean for health consumers?

Health consumers will have the ability to make informed choices by accessing relevant, up-to-date information about both public and private health care providers.

How will the performance of hospital services provided by the private or non-government sector be monitored?

The NHPA will provide clear and transparent public reporting of every Local Hospital Network and the hospitals within it, every private hospital and every Medicare Local, through the new Hospital Performance Reports and Healthy Communities Reports.

The NHPA will determine appropriate performance reporting data to be provided by private hospitals, taking into account commercial confidentiality.

What will happen to under-performing hospitals and health services?

The NHPA, in accordance with the PAF, will monitor the performance of every Local Hospital Network and the hospitals within it, every private hospital and every Medicare Local against performance measures and standards.

Consistent with these performance measures and standards, the NHPA will make regular assessments to identify under-performing hospitals and health services and measure their results against agreed performance indicators. States and territories, as managers of the public hospital system, will be responsible for addressing poor public hospital performance.

GP & Primary Health Care

What will Medicare Locals do?

Medicare Locals will work to support integrated and coordinated primary health care services (such as general practices, community health centres and allied health services) to keep people well and out of hospital and ensure that all Australians have access to effective and accessible after hours care. Medicare Locals are already being established and will be established throughout Australia by July 2012.

What do Medicare Locals mean for patients?

Patients will continue to receive the health care they require from their individual primary health care providers.

Medicare Locals will be responsible for developing strategies to meet the overall primary health care needs of their communities.

They will ensure the primary health care services needed by their communities work effectively for patients, through developing collaborative arrangements between health service providers in their area.

Will Medicare Locals provide services?

The primary role of Medicare Locals will relate to service coordination and planning, with service delivery as a secondary function where required. Medicare Locals will be able to identify gaps in services at the local level and examine opportunities for better targeting of services, working collaboratively with Local Hospital Networks and aged care service providers.

How do GP Super Clinics complement existing health services?

The Commonwealth Government has invested in the establishment of GP Super Clinics to make it easier for Australians to see and contact a health professional when they need to.

GP Super Clinics build on existing primary health care services and enhance, rather than compete, with these services. GP Super Clinics are encouraged to work with local health services and to integrate with local programs and initiatives, such as screening and prevention activities, clinics to assist people to better manage chronic disease and after hours rosters/arrangements.

Opportunities may also exist for local health services to link with the GP Super Clinic and receive outreach services for patients. Alternatively, some health services may be interested in providing services within the GP Super Clinic on a sessional basis. It is also possible that some GP Super Clinics will involve interested local health professionals or practices in training or research activities.

GP Super Clinics will provide high quality education and training opportunities for students, new graduates, GP trainees, registrars and other health professionals, helping to boost the primary health care workforce within local areas.
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Aged Care

Why is the current aged care system changing?

Australia’s older population is rapidly increasing which means a growing number of older people will need aged care services. The current aged care system is fragmented with complex and often inconsistent arrangements for managing aged care services. Changes are needed to ensure the aged care system can respond to the growing demand for aged care services.

How will National Health Reform improve the aged care system?

The Commonwealth Government is taking full responsibility for aged care in most states and territories, resulting in a nationally consistent and better integrated aged care system. This system will have strong links to health and hospital services, providing a more coordinated effort to support older Australians.

The establishment of central entry points to the aged care system will make it easier for older Australians, their families and carers to access information, assessment and service linkage for aged care. These changes will provide a more streamlined and positive experience for older Australians.

This reform is supported by investment of $36.8 million to improve information, intake and assessment and make it easier to access the aged care system.

What changes will there be to the delivery of aged care services?

The first stage of implementation of the new front end for aged care commenced on 1 July 2011 and includes the introduction of a new national phone number (1800 200 422) and improvements to the website (www.agedcareaustralia.gov.au)

These changes are the first steps in creating a nationally consistent system designed to make care options clearer and easier to understand.

Mental Health

How does the Australian Government’s $2.2 billion investment in mental health reform link with broader health reform?

The $1.5 billion Delivering National Mental Health Reform package brings the Australian Government’s new investments in mental health to $2.2 billion over five years and builds on the Government’s initial investments in mental health made through broader National Health Reform efforts, including:

• funding additional headspace youth-friendly centres and the expansion of the Early Psychosis Prevention and Intervention Centre (EPPIC) model; and
• addressing care availability through providing $1.6 billion for new sub-acute facilities in the community.

The Government acknowledged that more investment was needed in mental health and has committed $2.2 billion in new funding over the next five years (including $1.5 billion in new funding through the Delivering National Mental Health Reform package announced in the 2011-12 Budget).

This includes a greater focus on primary care, investing in prevention and modernising our mental health system.
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