- The Australian Defence health system
Overview
3.1A comprehensive and well-equipped health care system for our serving personnel is essential to ensure the Australian Defence Force’s (ADF) warfighting preparedness.
3.2Defence (including the Department of Defence and the ADF) is currently undergoing structural change based on the force posture requirements as detailed within the National Defence: Defence Strategic Review 2023 (2023 DSR). This is occurring at a time of significant workforce challenges, and it is through this lens that the Subcommittee looked at Defence’s approach to health care, considering the recent report by the Auditor-General and current performance issues. The focus of this line of inquiry was the general architecture of its uniformed and contracted health related capabilities, supporting both current personnel, the recruitment function and the interrelationship with external providers.
3.3This chapter reviews the Defence health system, workforce composition, contracted services, the ADF recruiting processes and the outcomes of the Auditor-General Report No.24 2022-23 Performance Audit, Defence’s management of the Delivery of Health Services to the Australian Defence Force.
Defence’s health system architecture
3.4The Australian Government is required by the Defence Regulation 2016 (Cth) to provide medical and dental treatment for ADF members undertaking continuous full-time service.
3.5At the time of this inquiry, Defence was responsible for the provision of health services to approximately 60,000 permanent members (Service Category (SERCAT) 6 flexible service and SERCAT7 full-time service), and a reserve workforce of 25,000 members (SERCAT3 reserve non-enduring pattern of service and SERCAT5 reserve enduring pattern of service).
3.6Specifically, Defence provides medical and dental services to permanent members to help:
- keep Defence members fit from a health perspective to perform their military duties;
- maintain or achieve the medical and physical standards required by the Military Personnel Policy Manual;
- reduce the risk of deterioration of health of a Defence member while deployed;
- where possible, restore an ill or injured Defence member to a level of health enabling them to meet the inherent requirements for Defence service;
- provide treatment and rehabilitation for illness, injury or health conditions.
- The Surgeon-General of the ADF (two-star position) is the Health Care Authority and Commander of Joint Health Command (JHC). JHC is responsible for the provision of ‘strategic leadership of the defence health system, and to unify the delivery of garrison health services’. In its submission, Defence further outlined that:
JHC works closely with Defence’s newly established Mental Health and Wellbeing Branch… in the Defence People Group… to ensure alignment with Defence’s focus on general mental health and wellbeing, including Defence’s suicide prevention program.
3.8There are five branches comprised of 917 Defence and Australian Public Service (APS) personnel within JHC (see Table 3.1 below). Approximately two-thirds of the APS personnel sit within Defence’s Garrison Health Branch and are responsible for the delivery of health services through eight joint health units and 50 health facilities across the ADF.
Table 3.1 ADF and APS workforce headcount by branch in JHC
| | | | | |
Garrison Health | 284 | 287 | 23 | 39 | 633 |
Health Business and Plans | 52 | 3 | 1 | 4 | 60 |
Health Protection and Policy | 43 | 12 | 21 | 18 | 94 |
Operational Health | 28 | 42 | 23 | 13 | 106 |
Office of CJHLTH | 9 | 8 | 4 | 3 | 24 |
TOTAL | 416 | 352 | 72 | 77 | 917 |
Source: Department of Defence, Submission 10. p.7.
3.9There are approximately 1941 full time members (SERCAT6 flexible service and SERCAT7 full-time service) and 1775 reserve members (SERCAT6 flexible service and SERCAT7 full-time service) within Defence’s uniformed health workforce. Most of these members are posted to health positions within their respective services (Army, Navy or Airforce).
Garrison health
3.10Garrison health delivers a combination of on-base and off-base health services to ADF personnel within Australian and on non-operational postings overseas. Services range from ‘preventative health, general practice, nursing, occupational medicine, dental, mental health, occupational and clinical psychology, pharmacy, physiotherapy, pathology specimen collection, occupational rehabilitation’ and in some areas, low acuity inpatient care.
3.11Defence explained to the Subcommittee that the garrison health workforce is comprised of ADF, APS and Contracted Health Professionals (CHPs). The CHPs are two-thirds of the garrison workforce with 1,355 personnel delivering most frontline clinical services and transactional administration.
3.12Defence advised that garrison health centres also provide a walk-in clinic for unscheduled care, known as “sick parade”, to ensure healthcare is provided on the same day’. Defence reported that approximately 40 per cent of patients accessing garrison health services were walk-ins in 2022-23.
3.13When ADF personnel are required to access specialist services, these are sourced through off-base contracted health providers such as specialist medical and dental, hospital admissions, optometry, imaging, radiology and pathology. The garrison health staff ‘coordinate care, administration and recording keeping integrating on-base and off-base services’.
Australian Defence Force’s health services contract
3.14Defence advised the Subcommittee that the delivery of garrison health care is contracted through Bupa Pty Ltd (Bupa) for an initial period of six years (2019-20 to 2024-25), up to a maximum of ten years.
3.15Bupa is contracted to deliver a suite of health services including:
- Integrated contracted health professional workforce;
- Access to medical advice, triage and referrals (including providing mental health risk assessments) 24 hours a day, seven days a week;
- Access to a broad range of specialist services;
- An appointment and booking system and/or service;
- Imaging and radiology services;
- Pathology services; and
- Occupational rehabilitation services.
- A Performance Management Framework (PMF) is contained within the Bupa contract, which is ‘designed to measure and assess Bupa’s achievement and performance against contractual requirements’. Defence advised that Bupa’s achieved performance against the PMF to date ‘demonstrates there are opportunities for improvement’.
- The International SOS submission contended the current prime contractor model with subcontracted staffing arrangements has pitfalls. Among others things, it adds significant costs to Defence due the compounding effect of prime and subcontractor profit margins, and also inhibits innovation and flexibility. International SOS proposed that separating on-base and off-base contracts would further allow Defence to manage the capabilities independently, to achieve different organisational priorities and objectives.
Australian Defence Force Recruiting health professionals
3.18Defence submitted that it is required to maintain health professionals within Defence Force Recruiting to ensure appropriate health policy standards are applied when assessing applicants, separate to the Bupa contract for garrison health services. Defence explained it has a prime services contract with Adecco and their subcontractor, Sonic Healthcare, who both deliver health assessments of ADF applicants to verify their medical suitability for service. The assessments include a medical questionnaire, medical examination, pre-enlistment check and medical examination on attestation.
3.19Lieutenant General Natasha Fox, Chief of Personnel at the Department of Defence informed the Subcommittee that the Adecco contract commenced on 1 July 2023. However, remediation plans over its performance are already in train:
They are in a year-long transition in and are now into the eighth month of that. They are not meeting the medical and psychological screening rates required, which we assess to be 600 a day, to grow 10,800 targets. They have a remediation plan under the contract. The performance notice has been issued in relation to that and the remediation plans are in place. We assess at this point that remediation from the subcontractor through Adecco will be in place by May 2025, which is within the year of the transition in but not sufficient time for us within the first year of the contract to achieve those numbers.
3.20Lieutenant General Natasha Fox further submitted that Defence is tracking, on a weekly basis, the number of Sonic Healthcare staff such as psychologists and doctors who are being trained on the Defence Health Manual. She advised Defence is ‘leaning in with Commonwealth assistance in terms of our policies and processes in reforming the whole approach to enlistment’.
3.21Defence clarified that each service has medical requirements unique to their operating environment, that is, sea, air and ground combat. However, the introduction of ‘space and cyber’ roles has necessitated a review of medical standards when recruiting for these roles, and whether the current one-size-fits-all approach remains fit-for-purpose.
3.22Defence said that the current medical assessment framework and policy is too rigid and does not allow for diversity within current and expected roles into the future. Current reforms will permit a more ‘occupationally based approach’ to be taken in the future.
3.23The Subcommittee queried Defence’s processes on recruiting timelines and utilising recruit ‘holding pools’. Lieutenant General Natasha Fox confirmed that the ADF undertakes merit-based selection and ‘if you meet the standards, we will accept you into the ADF’. The Lieutenant General emphasised that some specialisations such as the pilot category and Australian Defence Force Academy are reliant on ‘pools’ of applicants who are held for a period prior to selection, for example, pending their Australian Tertiary Admission Rank results.
3.24Defence highlighted that in the last reporting period it was able to achieve a 94-97 per cent fill rate for Australian Defence Force Academy. For other entry mechanisms, Defence advised a concerning year-to-date fill rate of 59 per cent with the limitation being Defence Force Recruiting’s medical assessment capacity. Which Lieutenant General Natasha Fox qualified with:
For me, the capacity in that medical piece is critical. That is our focus now, working with Adecco and the subprime to do that.
The Auditor-General Report on Defence’s Management of the Delivery of Health Services to the Australian Defence Force
3.25The Australian National Audit Office’s (ANAO) submission highlighted the outcomes of the Auditor-General Report No.24 2022-23 Defence’s management of the Delivery of Health Services to the Australian Defence Force (the report). The audit assessed whether Defence managed its ADF health services contract efficiently and effectively with regards to delivery of contracted service.
3.26The report found Defence was partly effective in managing its ADF health services contract to achieve these outcomes, with ‘demonstrated shortcomings in ensuring the implementation of all contracted requirements’.
3.27The report contained four recommendations, all of which Defence have agreed with:
1The Department of Defence ensure that all record keeping requirements are complied with in its management of the ADF health services contract.
2The Department of Defence develop and implement an assessment and authorisation framework, supported by appropriate governance and assurance arrangements, to oversee the handling of contract change proposals under the ADF health services contract.
3The Department of Defence ensure that accreditation processes for ICT systems that manage sensitive, including personally identifiable, information are completed in a timely manner, and that risks are identified and effectively monitored to ensure information is being manage appropriately.
4The Department of Defence implement the benefits management plan for the ADF health services contract and establish appropriate governance arrangements to monitor and report on benefits realisation.
3.28Rear Admiral Sonya Bennett, Surgeon General Australian Defence Force and Commander of Joint Health, Department of Defence advised the Subcommittee that Defence was working through the report recommendations and had expected all to be progressed and finalised in quarter one of 2024.
3.29The Subcommittee raised an additional concern around performance bonus payments made by JHC to Bupa for the period 1 July 2019 to 31 December 2023, totalling $7,122,458. Defence advised the payments were made in error due to an oversight of a performance clause in the contract between JHC and Bupa, and that this error was also identified in the Auditor-General’s audit.
3.30Defence advised that Bupa has since repaid $6,015,873, with additional work in train to recover the remainder. Defence told the Subcommittee that it expects no performance bonus payments will have been paid to Bupa at the conclusion of the recovery actions.
3.31Defence highlighted ongoing work with Bupa within the PMF to achieve contracted fill rates. It was stated that fill rates of critical positions are:
… quite high, at over 95 per cent…which is what Defence needs. The fill of critical positions is quite good. The challenges are more around the fill of that flex and surge. We did see examples of that working during COVID and the bushfires.
3.32Brigadier Toni Bushby, Director General, Health Business and Plans at the Department of Defence added that JHC is also working with Bupa to find alternative options such as, telehealth, off-base and civilian services to help meet the demand, noting broader national health workforce challenges.
3.33International SOS argued that Defence has traditionally managed on- and off-base services through ‘single providers, predominately retail health insurers’, who provide ‘excellent healthcare networks with volume discounting and integrated referral pathways, however medical staffing is not a core competency’.
3.34The Subcommittee also queried medical wait times suggesting, through anecdotal reports it had received, that it takes too long for Defence personnel to get medical appointments.Defence told the Subcommittee that they achieved more than a million health appointments per year with approximately 40 per cent of patients being walk-ins. Defence advised most people were seen on the day and the majority seen within five days.
The International SOS submission raised similar concerns around anecdotal reports of significant wait times for ADF personnel to see healthcare services. It went on to note that the management of medical workforces is a speciality in the management of credentialling, security clearances, clinical training and clinical governance. International SOS cautioned that:
… current issues experienced by ADF personnel may be exacerbated by engaging a prime industry partner without the expertise in medical workforce staffing.
National Defence: Defence Strategic Review 2023
3.35The Subcommittee sought feedback from Defence on the ability of its health system to support the ADF during conflict, where there may be very high numbers of casualties.
3.36Defence confirmed that it is undertaking a strategic health review and is engaged with Joint Operations Command, and Vice Chief of the Defence Force Group, to determine health capability requirements as part of the 2023 DSR outcomes. Rear Admiral Sonya Bennett advised the Subcommittee that JHC is also engaged with single services to determine how to achieve the desired capability outcomes.
Committee comment
3.37The Subcommittee recognises the significant workload challenges faced by Defence and Bupa in the delivery of garrison health services to 60,000 personnel, across three services, eight health units and 50 health facilities, utilising a combined workforce from Defence, the APS and CHPs. The Subcommittee also acknowledges the challenges associated with integrating and replying upon the civil healthcare system to facilitate off-base care.
3.38Notwithstanding this, the Subcommittee was concerned to hear about deficiencies in Defence’s management and oversight of the delivery of the health services contract and contractor performance payments. This includes evidence of Bupa’s suboptimal performance in achieving workforce fill rates or performance incentives after four and a half years of a maximum ten-year contract.
3.39The Subcommittee acknowledges that Defence and JHC have gone to significant effort to remediate contractual management and oversight responsibilities, thus achieving the implementation of the recommendations set out in the Auditor-General Report No.24 2022-23 Defence’s management of the Delivery of Health Services to the Australian Defence Force by the end of quarter one 2024. The Subcommittee notes that Bupa, in collaboration with Defence, is actively seeking alternative workforce and service provision options to overcome on-base CHP shortages.
3.40The Subcommittee was delighted to visit to Royal Australian Air Force Base Amberley in June 2024 and was impressed with the base functions and operations. However, the Subcommittee informally heard commanders and other defence personnel reiterate the sparsity of medical and specialist appointments within reasonable timeframes, requiring appointments to be made several months in advance.
3.41The Subcommittee considers there to be a significant disparity between the data presented by Defence in its evidence on this issue, and the informal communication by personnel of their experiences at the bases. The Subcommittee urges Defence and Bupa to investigate the issue further to resolve any disparity and implement any remediation required.
3.42The Subcommittee considers that despite these issues, the general architecture and integration of uniformed and contracted health capabilities, within the purview of the JHC and Bupa, adequately meets the current health service requirements of Defence personnel.
3.43The Subcommittee welcomes Defence’s review of the ADF entry standards requirements and supports the development of occupational assessments rather than a one-size-fits-all entry standard, providing a larger pool of recruits with more potential career pathways for applicants.
3.44The evidence on the suboptimal performance of Adecco and its subcontractor, Sonic Healthcare, is of significant concern to the Subcommittee. The Subcommittee is of the view that the shortfall in meeting the required 600 weekly assessments to Defence Force Recruiting is impeding Defence’s recruitment goals at a time when Defence is experiencing significant separation rates. The Subcommittee acknowledges that Adecco is working with Defence in remediating this shortfall, and strongly urges this work to continue apace.
3.45The Subcommittee acknowledges the work that Defence is undertaking on the strategic health review. The Subcommittee wishes to refrain from discussing the potential impacts to the construct of JHC and contractual options to support garrison health services, as it has not yet been completed. However, the Subcommittee does wish to emphasise that noting the workforce challenges in national health workforces and corresponding challenges with contractor fill rates, it anticipates Defence will need to revisit the design and construct of the contracted garrison health services into the future.
3.46Finally, the Subcommittee believes Defence has been proactive in attempting to resolve these challenges. The Subcommittee considers this a direct reflection on the strong leadership and hard work of Lieutenant General Natasha Fox, Surgeon-General Rear Admiral Sonya Bennett and their respective teams.
3.47The Subcommittee recommends Defence (inclusive of the Department of Defence and the Australian Defence Force) report back to the Subcommittee in six months and 12 months’ time on its progress in remediating the Defence Force Recruiting contractor shortages and any ongoing impact to Defence Force Recruiting outcomes.