AUSTRALIAN HEARING SERVICES REFORM BILL 1998

AUSTRALIAN HEARING SERVICES REFORM BILL 1998

December 1998

© Commonwealth of Australia 1997

ISBN 1440-2572

View the report as separate downloadable parts:

MEMBERSHIP OF THE COMMITTEE  
 
AUSTRALIAN HEARING SERVICES REFORM BILL 1998  

    THE INQUIRY
    THE BILL
    ISSUES
        Future of Community Service Obligations
        Provision of hearing services to children and pensioners
        Operation of the new arrangements for the provision of subsidised hearing services
        Continuation of high quality hearing services research

 

RECOMMENDATIONS

 
 

MINORITY REPORT – AUSTRALIAN LABOR PARTY

 
 

MINORITY REPORT BY THE AUSTRALIAN DEMOCRATS

 
 

APPENDIX 1 – submissions received by the committee

 
 
APPENDIX 2 – public hearing  
 

Membership of the Committee

Members in the 38th Parliament

Senator Sue Knowles, Chairman LP, Western Australia
Senator Andrew Bartlett, Deputy Chairman AD, Queensland
Senator Kay Denman ALP, Tasmania
Senator Alan Eggleston LP, Western Australia
Senator Michael Forshaw ALP, New South Wales
Senator Ross Lightfoot LP, Western Australia

Participating Members in the 38th Parliament

Senator Eric Abetz LP, Tasmania
Senator Bob Brown Greens, Tasmania
Senator Mal Colston Ind, Queensland
Senator Barney Cooney ALP, Victoria
Senator the Hon Rosemary Crowley ALP, South Australia
Senator Chris Evans ALP, Western Australia
Senator the Hon John Faulkner ALP, New South Wales
Senator Brenda Gibbs ALP, Queensland
Senator Brian Harradine Ind, Tasmania
Senator Sue Mackay ALP, Tasmania
Senator Dee Margetts GWA, Western Australia
Senator Shayne Murphy ALP, Tasmania
Senator Belinda Neal ALP, New South Wales
Senator Kay Patterson LP, Victoria
Senator the Hon Margaret Reynolds ALP, Queensland
Senator Sue West ALP, New South Wales
Senator John Woodley AD, Queensland

Members in the 39th Parliament

Senator Sue Knowles, Chairman LP, Western Australia
Senator Andrew Bartlett, Deputy Chairman AD, Queensland
Senator Kay Denman ALP, Tasmania
Senator Alan Eggleston LP, Western Australia
Senator Chris Evans ALP, Western Australia
Senator Ross Lightfoot LP, Western Australia

Participating Members in the 39th Parliament

Senator Eric Abetz LP, Tasmania
Senator Bob Brown Greens, Tasmania
Senator Mal Colston Ind, Queensland
Senator the Hon Rosemary Crowley ALP, South Australia
Senator Brenda Gibbs ALP, Queensland
Senator Brian Harradine Ind, Tasmania
Senator Meg Lees AD, South Australia
Senator Dee Margetts GWA, Western Australia
Senator John Woodley AD, Queensland

 

REPORT - AUSTRALIAN HEARING SERVICES REFROM BILL 1998

1. THE INQUIRY

1.1 The Australian Hearing Services Reform Bill 1998 was introduced into the House of Representatives on 25 March 1998. On 8 July 1998, the Senate, on the recommendation of the Selection of Bills Committee (Report No. 10 of 1998), referred the provisions of the Bill to the Committee for report by 11 August 1998. The changed sitting pattern for the Senate and intervening Federal election delayed the presentation of this report. Following the reappointment of the Committee at the commencement of the new Parliament, the Senate agreed to the readoption of the reference on 26 November 1998.

1.2 The Committee considered the Bill at a public hearing on 18 August 1998. Details of the public hearing are referred to in Appendix 2. The Committee received 29 submissions relating to the Bill and these are listed at Appendix 1.

2. THE BILL

2.1 The Australian Hearing Services Reform Bill 1998 repeals the Australian Hearing Services Act 1991 and provides for a number of transitional provisions to facilitate the restructuring of the Australian Hearing Services Authority (AHS) as a wholly Commonwealth owned company limited by shares. The new company will be designated a Government Business Enterprise and will compete with private providers in the provision of services for eligible adult clients under the Commonwealth's Hearing Services Program. Company status will not entail a relinquishment of Government control. The new company will be subject to the Commonwealth Authorities and Companies Act and will have to comply with its memorandum and articles of association which will remain in the control of the Commonwealth. [1]

2.2 This Bill completes the reforms to the Hearing Services Program introduced in 1997 to improve client choice of service provider and provide more efficient and effective ways of delivering government hearing services to clients. [2] These reforms included the creation, on 1 July 1997, of the Office of Hearing Services (OHS) within the Department of Health and Family Services (DHFS) [3] to administer the Hearing Services Program and the implementation, on 1 November, of a new Hearing Services Voucher System. AHS recently adopted `Australian Hearing' as its trading name to avoid confusion with OHS and the shift in Program management and administrative responsibility.

2.3 The Bill provides for the transfer of assets and liabilities of the Authority, including pending proceedings, to the new company and for the transfer of specified liabilities of the Authority to the Commonwealth. The Bill also provides for the transfer of employees of the Authority to the new company and protects their accrued entitlements and continuity of service.

2.4 Responsibility for meeting essential community service obligations (CSOs) on behalf of the Government will be transferred from the Office of Hearing Services to the company through contractual arrangements. These CSOs, currently provided for within the Australian Hearing Services Act 1991, include the provision of hearing services to children (up to the age of 21), clients with special needs, eligible people in remote areas, notably Aboriginal and Torres Strait Islander people, hearing and noise related research, hearing loss prevention activities and industry collaboration activities focusing on the development of Australian hearing products. [4]

3. ISSUES

3.1 The general thrust of the Bill was not opposed by many of those involved with the provision or receipt of hearing services in Australia including the Deafness Forum [5], ACROD [6], HAMADAA [7] and the Audiological Society of Australia (although with a strong proviso of a legislative guarantee for CSOs being included) [8]. Nevertheless, a number of issues were raised with the Committee though most concerns centred around future uncertainty and getting the proposed arrangements correct, rather than the current delivery of services. Indeed many submissions were laudatory of the consistently high quality and standard of services provided by AHS. [9]

Future of Community Service Obligations

3.2 The future of Community Service Obligations (CSOs) was the subject of considerable comment in virtually all submissions received by the Committee. The comments covered three main points. Firstly, that repeal of the Australian Hearing Services Act 1991 would mean that legislative protection would no longer be guaranteed for those adults and children defined under the CSOs. It was argued that the CSOs should be detailed in legislation to guarantee that such protection is continued and that the services provided may be evaluated to ensure that adequate resources are available for their future provision. Secondly, that AHS should retain its present role in carrying out these service obligations for the Government and be adequately funded to meet that responsibility. AHS detailed for the Committee its Community Service Program encompassing the specialist areas of Paediatric, Specialist Adult and Indigenous Services that it provides. [10] Thirdly, that the emphasis in carrying out the obligations should be on service rather than price. [11]

3.3 The Government's ongoing commitment to CSOs was emphasised in the Minister's second reading speech:

This government places a significant emphasis on the provision of CSOs and remains committed to their ongoing delivery. To demonstrate our commitment, the government will continue funding CSOs through appropriations. As well, the Office of Hearing Services, which has responsibility for managing CSOs, will draw up robust contractual arrangements with the new company which will specify the standards of service delivery and the outcomes to be achieved.

3.4 The Department reaffirmed this commitment in evidence noting that `the government has indicated that it will continue to fund AHS to provide CSOs at the current level and quality of service. There is no threat at all to CSOs under the new bill.' DHFS advised that, accordingly, priority leading to the anticipated signing of CSO contracts `has been given to defining details of CSOs by level, type, standard and costs of services. This data will be closely monitored to ensure that the current level and quality of services is maintained.' [12]

3.5 However, the possibility of a legislative guarantee for CSOs was referred to by the Departmental Deputy Secretary, Ms Murnane, who commented in evidence that:

in this sort of structural change the practice has been for CSOs to be dealt with in binding contracts. The policy position has not changed, but to put the matter entirely to rest an amendment to the Hearing Services Administration Act could be considered by government, and what would be in that amendment would be fully in line with government policy as it now exists. [13]

Provision of hearing services to children and pensioners

3.6 A particular concern put to the Committee related to the future of hearing services for children. Children's services are a key Community Service Obligation. Many of the consumers, parents and teaching groups who have experienced the provision of children's services by AHS expressed the opinion that such services should remain exclusively with AHS (although a proviso that parents have the right to use a private provider where AHS is unable to supply the listening device which most suits their child's needs was also made). [14] This opinion was based on a number of reasons including:

3.7 The Deafness Forum noted that there is `some consumer organisation concern' in the area of services to pensioners. The Forum submitted that:

The principal problem relates to the fact that some older persons may have difficulty understanding advice they receive, may be confused about the voucher system and their options, and may be vulnerable to being led to believe they need to purchase top up aids…The need is to find ways of minimising the possibility that some older consumers might make wrong decisions when seeking and obtaining hearing services. [16]

3.8 AHS indicated that its Board and Management `are committed to preserving the organisation's commitment to excellence in providing services to pensioners and children'. [17]

3.9 DHFS confirmed that `unquestionably, AHS, as virtually at the moment the sole provider for services to children, is doing an excellent job and has an enormous amount of consumer satisfaction'. [18] The Department advised that the Government has responded to concerns at the possible change to the arrangements whereby AHS is the sole provider of government funded services to children `by restating its commitment to excellence in the provision of hearing services to children'. While there `are no plans at this stage to use any provider other than AHS to deliver CSOs', the Department confirmed that:

The Government has indicated that it will not make any changes to the existing provision by AHS unless it can be clearly demonstrated that such a change would lead to further improvements in the level and quality of hearing rehabilitation outcomes for children.

Any decision to allow other hearing service providers to also provide these services would only be made after comprehensive consultation with parents, peak bodies and industry, extensive evaluation and advice from the Hearing Services Advisory Committee. [19]

Operation of the new arrangements for the provision of subsidised hearing services

3.10 The Deafness Forum indicated that it has received only a small number of specific complaints, and some general expressions of concern about the new arrangements. A considerably greater expression of concern was regarding the future, particularly in respect of possible changes to children's services. [20]

3.11 However, a number of consumer and provider concerns were raised with the Committee including the standard of information provided to consumers, questionable advertising and marketing methods, potential for `top up' overservicing and abuse, difficulties for NESB people being able to communicate with their service provider, an increased administrative load for providers, and extended waiting times for repairs, particularly in rural areas. [21] A reduction in service to rural areas since the implementation of the changes was also referred to in evidence. [22]

3.12 The operation of the voucher system was commented upon, particularly that the value of the vouchers provided do not adequately meet the costs involved in the provision of quality service. It was suggested that this situation could lead to possible abuse of the top up system by some profit-driven providers. [23] Hearing aid manufacturer/distributor companies have also contacted the Deafness Forum expressing concern about currency changes impacting on the operation of the voucher system and its possible implications for consumers. HAMADAA similarly advised that its members were concerned `about the level of fixed prices under the OHS contract and their impact on the viability of contractors' especially given the drop in value of the Australian dollar. However, HAMADAA noted that these concerns are presently being addressed through discussions with the Department. [24]

3.13 The Department informed the Committee that OHS operates two toll free hot-line services, one for consumers and one for providers. Between 1 November 1997 and 31 July 1998 around 8,700 calls were received, mostly from people seeking information on the progress of their voucher application and which could be answered during the telephone call. Where the call is a complaint rather than an inquiry it is handled in accordance with set internal complaints handling procedures. These procedures are also used to resolve specific complaints by consumers about individual providers. DHFS stated that most complaints are resolved to the satisfaction of both the consumer and the provider through these procedures. If there are a number of complaints about a particular provider a formal investigation is undertaken. However, since the implementation of the voucher system only three formal investigations have been initiated. [25]

3.14 The Department indicated that the concerns expressed by private providers about the new arrangements largely centred around delays in the claim payments system. Some initial computer problems and service provider uncertainty about the new claiming rules and procedures resulted in significant payment delays. However, these have been corrected and further information and guidance given to service providers, with the result that new claims are now paid within 14 days of receipt of a valid claim. [26]

3.15 In relation to the voucher system and possible abuse of top up devices, the Department emphasised that:

the consumer is the focus of these reforms and there are safeguards in place to ensure that the consumer can exercise choice with regard to top-up devices, but at the same time be protected from pressure to purchase a top-up device…We are continually monitoring the system overall, particularly the situation with respect to top-up devices. [27]

3.16 DHFS also acknowledged that some providers and manufacturers had been in contact with it about the value of the voucher being insufficient and that it is `now in a lead-up to a renegotiation of the price. That will be completed by 1 November.' [28]

Continuation of high quality hearing services research

3.17 The high quality and international recognition accorded hearing services research performed in Australia was referred to favourably in much of the evidence. Many of the particular research successes were also referred to in evidence. [29] The Audiological Society of Australia (ASA) noted that the AHS, through its research arm the National Acoustics Laboratories (NAL), has for many years contributed significantly to research aimed at improving hearing prosthetics and communication for hearing impaired adults and children. The NAL also performs valuable research into the prevention of hearing loss, and in preventing other adverse effects of noise. The research conducted by the NAL is internationally recognised, and has had significant impact on clinical practice world-wide in relation to services to hearing impaired adults and children. The ASA stressed that `the internationally-recognised results of AHS research have only been possible due to the close alliance of the researchers with a large national-based clinical service organisation, providing the opportunity for efficient trialing of fitting procedures or new technology'. [30]

3.18 The NAL is also a core party to the Cooperative Research Centre for Cochlear Implant, Speech and Hearing Research. This CRC research is focussed both on commercial and public good outcomes. [31] The NAL primarily works to improve amplification schemes for hearing aids, and to improve methods for selecting and adjusting hearing aids to best suit the characteristics of hearing impaired people.

3.19 The ASA, among others, was concerned that the legislative changes imply that OHS will only be in a managerial position in regards to the funding of NAL research, and that it is unclear whether OHS will have a controlling position in regards to the inclusion of specific projects in the research program, or to the specific funding allocated to individual research projects. It was imperative that future research could not be curtailed in response to short-term budget pressures or requirements for efficiency dividends. [32]

3.20 AHS advised that the conduct, progress, appropriateness and outcomes of the NAL research program are monitored by the Authority's Research Advisory Committee, comprising senior managers from within the AHS, and a majority of external experts from relevant fields. [33] DHFS also informed the Committee that following the restructure of the AHS, the Office of Hearing Services will contract with AHS to provide quarterly reports on the research undertaken with the funds provided. These funds, $3.5million per annum, are a specified appropriation for research and will continue as an identified element into the future. [34]

4. RECOMMENDATIONS

4.1 The Committee reports to the Senate that it has considered the Australian Hearing Services Reform Bill 1998 and recommends that the Bill proceed.

4.2 The Committee further recommends that the Government consider amending the Hearing Services Administration Act 1997 to enshrine in legislation its policy commitment that there would be no change to the existing Community Service Obligations (CSOs) and that their funding arrangements would be retained.

Senator Sue Knowles
Chairman

December 1998

 

MINORITY REPORT

AUSTRALIAN LABOR PARTY

AUSTRALIAN HEARING SERVICES REFORM BILL 1998

The Opposition members of this committee wish to express their concern that the long term outcome for disadvantaged groups of hearing impaired people are very likely to be worse, if this Bill is passed and the Government continues to effectively privatise what is an essential service. Those most likely to be affected by a reduction in service are children, aboriginal groups and the elderly

Australian Hearing Services has developed a deserved reputation as a specialist delivery agency for low cost services. Evidence suggested that in several areas the private sector was not prepared to compete or was unable to match the price offered by a single national specialist body.

There is no support for this body to be privatised. This would potentially result in the loss of these services for no demonstrated gain. The CSO's have not yet been put into legislation and there is no guarantee that the CSO's will not be whittled down over time.

The needs of deaf people are not the place to start making economies. Australian Hearing Services is not the place to start experiments in organisational reform when the case for reform has not been demonstrated.

As there can be no certainty about how far the reform process will be taken and because there is no clear definition of the CSO's and a commitment about who will fund them in future, this Bill should not proceed in its current form.

Senator Chris Evans (ALP, Western Australia)

Senator Kay Denman (ALP, Tasmania)

 

MINORITY REPORT BY THE AUSTRALIAN DEMOCRATS

Australian Hearing Services Reform Bill 1998

The Democrats believe that this Bill should reflect the Government's stated commitment to providing reliable and high quality hearing services to people with hearing impairments. We are committed to ensuring that the estimated 600 000 Australians who are currently eligible for assistance under the hearing services program are not disadvantaged by the move towards corporatisation of the Australian Hearing Service (AHS).

The Democrats have also been aware of the impact of the corporatisation on the 700 staff employed by the AHS. We believe that employees of AHS should also not be disadvantaged by the corporatisation of the AHS.

The Democrats strongly support the retention by AHS of services to children, clients with special needs and remote and indigenous clients and research. We believe that the community service obligations (CSO) of AHS should be enshrined in legislation to ensure that this policy commitment is upheld by successive governments.

The Democrats do not necessarily agree that separating the purchaser and provider functions of AHS will lead to greater efficiency in service delivery. We recognise however that people with hearing impairments can benefit from having a greater choice of service providers. We believe that there are other important factors that should be addressed in the move towards corporatisation. These include:

The Democrats acknowledge the concerns that many consumers have about the impact of corporatisation on consumers who may be more vulnerable to exploitation, such as pensioners and people with limited English skills. We urge the Government to address these concerns and to ensure that all consumers are fully informed about their rights and the choices available to them. We believe that the government should ensure that service providers and their associated marketing practices are closely monitored to avoid the potential for inappropriate practices, such as overservicing.

The Democrats support the Committee's recommendations and wish to emphasise the need for ongoing monitoring of the implementation of the measures contained in this Bill.

Senator Andrew Bartlett
Australian Democrats Senator for Queensland

 

APPENDIX 1: Submissions received by the Committee

1 Australian Conductive Deafness Association Inc.
2 Royal Institute for Deaf and Blind Children
3 Mr David Bullock
4 SHHH Australia Inc.
5 Committee of Principals and Heads of Services for Deaf and Hearing Impaired Students
6 The Advisory Council for Children with Impaired Hearing (Victoria)
7 Deafness Forum of Australia
8 Tinnitus Association WA (Inc)
9 Better Hearing Australia (WA) Inc.
10 Mr Richard A. Roper
11 Early Education Program for Hearing Impaired Children
12 Deafness Association of the NT Inc
13 North Shore Deaf Children's Association Incorporated, Management Committee
14 Parents of Hearing Impaired South Australia Inc.
15 Parents of Hearing Impaired Children National Network
16 HAMADAA
17 Australian Consumers' Association
18 Deafness Council Western Australia
19 ACROD Limited
20 Australian Hearing Services
21 Commonwealth Department of Health and Family Services

- Additional Information, dated 26 August 1998

22 Community and Public Sector Union, PSU Group (CPSU)
23 Cooperative Research Centre for Cochlear Implant, Speech & Hearing Research
24 Speech Pathology Association of Australia
25 Audiological Society of Australia
26 Parents of Hearing Impaired Children Victorian Federation Inc
27 NACCHO
28 Parent Council for Deaf Education Inc
29 Mr Lindsay Symons

 

APPENDIX 2: Public hearing

A public hearing was held on the Bill on 18 August 1998 in Senate Committee Room 2S1.

Committee Members in attendance

Senator Sue Knowles (Chairman)
Senator Kay Denman
Senator Michael Forshaw
Senator Ross Lightfoot

Witnesses

Deafness Forum of Australia
Mr Brian Rope, Chief Executive Officer

Parents of Hearing Impaired Children National Network
Ms Jean Feder, South Australian Coordinator & Board Member Deafness Forum

SHHH Australia Inc.
Mr Richard Brading, President

ACROD Limited
Mr Damian Lacey, Chief Executive Officer, VSDC

Royal Institute for Deaf and Blind Children
Dr Dianne Toe, Clinical Audiologist/Research Fellow

Audiological Society of Australia

Cooperative Research Centre for Cochlear Implant, Speech & Hearing Research
Dr Robert Cowan, Federal President, Audiological Society & Director, Cooperative Research Centre

CPSU
Mr David O'Neill, National Industrial Officer

Committee of Principals and Heads of Services for Deaf and Hearing Impaired
Mrs Noeleen Bieske, Principal of St Mary's School for Children with Impaired Hearing Inc.
Mrs Marilyn Dann, Coordinator, Mount View Primary School Facility for Deaf and Hearing Impaired Children

Australian Hearing Services
Mr Peter O'Byrne, Managing Director
Mr Warren Butler, General Manager, Operations

Department of Health and Family Services
Ms Mary Murnane, Deputy Secretary
Mr Barry Wight, First Assistance Secretary, Disability Programs Division
Mr Peter DeGraaff, A/g Assistant Secretary, Office of Hearing Services
Mr Nicholas Blazow, Assistant Secretary, Corporate Development Branch
Mr John Reynolds, Director, Portfolio Support Unit

 

Footnotes

[1] Committee Hansard, 18.8.98, pp.CA93-4.

[2] See Community Affairs Legislation Committee, Report on the Hearing Services Administration Bill 1997 and the Hearing Services and AGHS Reform Bill 1997, March 1997.

[3] At its public hearing in August 1998 the Committee took evidence on this Bill from the Department of Health and Family Services. As a result of changes to the Administrative Arrangements in October 1998 following the Federal election, the Hearing Services Program is now administered by the new Department of Health and Aged Care.

[4] Explanatory memorandum – Outline; Minister's second reading speech, House of Representatives Hansard, 25.3.98, p.1478.

[5] Committee Hansard, 18.8.98, p.CA70.

[6] Committee Hansard, 18.8.98, p.CA76.

[7] Submission No.16, p.1.

[8] Committee Hansard, 18.8.98, pp.CA81, 84.

[9] For example Submissions No.2, p.1; No.5, p.2; No.7, p.7; No.15, p.1; No.19, p.2. DHFS also referred to a recent survey of 1100 hearing services clients which indicated a rate of over 90 per cent satisfaction or better with the services provided, Committee Hansard, 18.8.98, p.CA93.

[10] Submission No.20, pp.1-5.

[11] For example Submissions No.4, p.2; No.7, p.4; No.12, pp.1-2; No.19, p.2; No.22, p.2; No.23, p.3; No.25, p.4.

[12] Committee Hansard, 18.8.98, p.CA94; Submission No.21, p.4.

[13] Committee Hansard, 18.8.98, p.CA95.

[14] Submission No.13, p.1 and Submission No.28, p.1.

[15] For example Submissions No.4, pp.2-3; No.5, pp.2-4; No.6, pp.1-2, 5; No.7, pp.5-6; No.11, pp.2-3; No.12, p.2; No.13, pp.2-3.

[16] Submission No.7, p.6.

[17] Submission No.20, p.5.

[18] Committee Hansard, 18.8.98, p.CA97.

[19] Submission No.21, pp.4-5. See also Committee Hansard, 18.8.98, pp.CA95-6.

[20] Submission No.7, p.2.

[21] For example Submissions No.4, pp.3-4; No.7, pp.7-9; No.17, p.1; No.25, pp.6-12 which outlines the concerns of audiologists in an ASA survey with cost reductions and their impact on service delivery.

[22] Committee Hansard, 18.8.98, pp.CA71-2, 91; and Submission No.3, pp.1-2.

[23] Submissions No.2, p.3; No.12, p.3; No.15, p.2; No.19, p.3 and Committee Hansard, 18.8.98, p.CA77.

[24] Submission No.16, p.1.

[25] Submission No.21, p.5; and Committee Hansard, 18.8.98, p.CA93.

[26] Submission No.21, p.6.

[27] Committee Hansard, 18.8.98, p.CA94.

[28] Committee Hansard, 18.8.98, p.CA99.

[29] For example Submissions No.2, p.4; No.4, p.4; No.5, p.4; No.7, p.10; No.12, p.3; No.15, p.2.

[30] Submission No.25, p.13. AHS also noted that `this unparalleled association has brought several competitive advantages to the research, which in turn has helped the community at large', Submission No.20, p.6.

[31] The organisation and major achievements of the CRC are referred to in its submission, see Submission No.23, pp.2-3.

[32] Submission No.25, p.15. See also Submission No.23, pp.5-6.

[33] Submission No.20, p.8.

[34] Submission No.21, p.6 and Committee Hansard, 18.8.98, p.CA97.