Parliamentary Library Blog

Parliament house flag post

The new COAG health agreement: is it really health reform?

Posted 15/02/2011 by Anne-marie Boxall



After marathon negotiations over the weekend, the Council of Australian Governments (COAG) announced a revised health reform package. The new deal jettisons some of the more contentious and what had become unworkable elements of the previous National Health and Hospitals Agreement: some of the most problematic elements were the requirement that states dedicate a portion of their GST to health, and plans for the Commonwealth to takeover primary health care and fund capital investment in public hospitals through the ‘user cost of capital’ method.

The new health reform deal undeniably focuses on reforming the financing arrangements for public hospitals. Some health commentators have expressed disappointment with the deal because it is so hospital centric and does not achieve what Labor originally set out to do in health care. The reforms do not end the blame game (which will continue whilst ever there is more than one funding body), and they do not come close to being the biggest reforms in the history of the federation or since the advent of Medicare. Some have also questioned whether the financing reforms outlined in the new deal, even when coupled with reforms to the governance of the health system, and to the aged care and primary health care sectors, are likely to lead the ‘more seamless care across sectors’ that is promised in the agreement.

Although expectations about what these reforms can deliver may need to be scaled back, at least in the short-term, past experiences show that it is still possible that these initial changes will deliver real reform to the Australian health system over time. In fact, when the reform experiences of other countries are examined it becomes clear that many of the most significant changes to health systems occur gradually, over long periods of time. Big-bang reforms that fundamentally alter the structure of the health system are very rare; although they are frequently proposed, they often fall over before major changes are achieved.

This pattern – where change occurs in health systems without major reform, and where major reforms often fail to deliver change – was first highlighted by an American political scientist, Jacob Hacker. He cites examples from his own country where proposals for major health reform have failed to deliver substantial changes to the health system. However he also points to examples from Britain, Canada, the Netherlands and Germany where the same pattern, of reform without change and change without reform, has occurred.

Australia is unusual because we have excelled at big-bang health reforms in the past. The introduction of Medibank in 1975 was undoubtedly a major structural change to our health system. It was soon followed by another, the dismantling of Medibank and revival of the voluntary, private health insurance system. And just to cement our reputation for making radical change to the health system, Australia decided to reinstate Medibank in 1984, this time with the name of Medicare. Australia remains the only country in the world to have introduced universal health insurance, subsequently abolished it, and then implemented the same system again.

Despite Australia’s ‘success’ with big-bang reform, it is worth noting that incremental changes on the ground have been a very effective way of achieving reform in other countries, particularly when control over the health care finances is shifted away from central governments and devolved to local levels.

There are several key changes within the new health reform package that, if fully implemented, have the potential over time to deliver real reforms to the Australian health system. The creation of local service delivery infrastructure (Local Hospital Networks and Medicare Locals), a single national funding pool, stronger national governance and performance monitoring all mean that it may be possible to devolve some decision-making about the delivery and financing of health care to the local level.

Refinements to the current package of health reforms will be needed over time; it is not clear yet what the most appropriate catchment area is for Local Hospital Networks and Medicare Locals and what powers the national governance agencies will have over providers. Governments are also likely to have to relinquish more control over financial decision-making to allow Local Hospital Networks and Medicare Locals to make changes on the ground. But if necessary changes are made along the way, it is possible that real reforms will be achieved in the way health care providers work together to provide seamless care for patients. And this would truly be the biggest reform since Medicare.


(Image accessed from LuLac Political Letter: http://bit.ly/hEa0aK


Thank you for your comment. If it does not require moderation, it will appear shortly.

Add your comment

[Click to expand]

We welcome your comments, or additional information which is relevant to a post. These can be added by clicking on the ‘Add your comment’ option above. Please note that the Parliamentary Library will moderate comments, and reserves the right not to publish comments that are inconsistent with the objectives of FlagPost. This includes spam, profanity and personal abuse, as well as comments that are factually incorrect or politically partisan.

 
 
 
Facebook LinkedIn Twitter Add | Email Print

FlagPost

Flagpost is a blog on current issues of interest to members of the Australian Parliament


Parliamentary Library Logo showing Information Analysis & Advice

Archive

Syndication

Tagcloud

Refugees asylum climate change immigration Australian foreign policy Parliament social security welfare reform school education welfare policy health financing elections Australian Defence Force emissions trading higher education private health insurance people trafficking Indigenous Australians illicit drugs women gambling health reform federal election 2010 Employment Asia Medicare United Nations Australian Bureau of Statistics statistics sport health forced labour federal budget Afghanistan Industrial Relations Carbon Pricing Mechanism politics Middle East income management dental health United States aid disability child protection environment poker machines Australia in the Asian Century Australian Sports Anti-Doping Agency steroids World Anti-Doping Agency National Disability Insurance Scheme detention aged care 43rd Parliament slavery health system Fair Work Act Australian Public Service governance labour force people smuggling transport debt taxation international relations constitution New Zealand food WADA Australian Crime Commission pharmaceutical benefits scheme public service reform law enforcement children's health Aviation foreign debt gross debt net debt defence capability parliamentary procedure Senate Senators and Members ALP ASADA Australian Federal Police criminal law Newstart Parenting Payment multiculturalism Youth Allowance sea farers accountability Papua New Guinea youth paid parental leave pensions same sex relationships corruption coal seam gas customs planning federal election 2013 Australian Electoral Commission doping OECD crime health risks International Women's Day Gonski Review of Funding for Schooling sex slavery Special Rapporteur Northern Territory Emergency Response social policy carbon tax mining High Court Higher Education Loan Program HECS military history electoral reform employer employee renewable energy regional unemployment fishing European Union Federal Court family assistance skilled migration banking United Nations Security Council Australian economy forestry food labelling vocational education and training Drugs UK Parliament welfare systems Indonesia social media children federal state relations Constitutional reform local government codes of conduct terrorist financing homelessness Parliamentary remuneration money laundering Trafficking in Persons Report energy science social inclusion human rights paternalism World Trade Organization Australia public health China housing affordability bulk billing political parties water productivity health policy Governor-General US economy trade unions domestic violence export liquefied natural gas foreign bribery firearms question time speaker superannuation public housing election results by-election expertise public policy climate Intergovernmental Panel on Climate Change leadership terrorist groups voting Department of Agriculture Fisheries and Forestry regulation Pacific Islands reserved seats research and development new psychoactive substances synthetic drugs UNODC ASIO Australian Security Intelligence Organisation intelligence community carbon markets animal health middle class welfare ADRV Census Indigenous constitutional recognition of local government referendum consumer laws PISA competition policy royal commission US politics violence against women language education baby bonus Leaders of the Opposition citizen engagement policymaking Australia Greens servitude Trafficking Protocol forced marriage Population rural and regional mental health alcohol entitlements ministries Hung Parliament social citizenship maritime Iran transparency ANZUS regional students school chaplains federal budget 2011-12 salary Medicare Locals primary care Building the Education Revolution smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Southeast Asia Israel Palestine asylum refugees immigration political finance donations foreign aid disability employment Economics efficiency human rights; Racial Discrimination Act employment law bullying asylum seekers Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies same-sex marriage disorderly conduct integrity retirement Parliament House Australian Secret Intelligence Service welfare standing orders prime ministers election timetable sitting days First speech terrorism defence budget submarines workers financial sector Canada Somalia United Kingdom GDP Tasmania world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission limitation period universities Ireland cancer gene patents genetic testing suspension of standing and sessional orders live exports infant mortality honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC nutrition anti-dumping Rent Assistance obesity evidence law sacrament of confession sexual abuse US presidential election international days DFAT UN General Assembly deregulation Regulation Impact Statements administrative law small business Breaker Morant regional engagement social determinants of health abortion Members suspension workplace health and safety marine reserves hearing TAFE Victoria astronomy resources sector YMCA youth parliament Korea fuel rebate Australian Greens presidential nomination Racial Discrimination Act political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing political education Social Inclusion Board early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin sanctions Norway hospitals republic President Barack Obama Presidential visits qantas counselling Korean peninsula Work Choices biosecurity hendra environmental law federalism federation preselection therapeutic goods Therapeutic Goods Administration plebiscites computer games pests suicide nuclear COAG Ministerial Councils floods ADHD stimulant medication advertising electricity extradition standards conscience votes poverty preventative health rural health coastal erosion Parliamentary Budget Office NATO work-life balance

Show all
Show less