<!--HTMLCleanerRegion--> Chapter 2

Chapter 2


2.1        In the Minister's Second Reading Speech she stated that the National Health Performance Authority will 'improve quality, increase transparency and drive value for money in the health system'.[1]  Its main role will be to 'make performance standards in the health system more transparent by publishing reports and nationally consistent data'.[2] 

2.2        Submissions provide broad support for the establishment of the National Health Performance Authority. The Consumers Health Forum (CHF) welcomed the establishment of the Authority saying it anticipates:

... that it should result in the introduction of rigorous performance indicators at a national level, which will drive health system quality and performance in Australia.[3]

2.3        The Australian Medical Association (AMA) submission 'fully supports a stronger framework of transparent reporting against national standards and performance indicators'.[4]  The Governments of Western Australia and Victoria supported in principle the establishment of a National Health Performance Authority as agreed by the Council of Australian Governments (COAG) with reservations about the proposed amendments by the Bill.[5]

2.4        The Royal Australian College of General Practitioners (RACGP) welcomed and recognised the need for performance measurement in healthcare.[6]  Catholic Health Australia (CHA) supported the establishment of the Authority.[7] Dr Antioch strongly supported the intent of the amendments proposed by the Bill,[8] National Seniors Australia were supportive of the establishment of the new Authority,[9] while the National Health Care Partnership (NHCP)[10] and the Royal Australasian College of Physicians are also, in principle, supportive of the proposed Bill.[11]

2.5        However, support for the amendments proposed by the Bill was also often premised on further consideration of a number of issues and the introduction of amendments.  Concerns raised range from the need for further consultation with governments and stakeholders on the development of performance indicators, improving the wording of the Bill to provide greater clarity about the functions and reporting requirements of the Authority, as well as reviewing issues of consent and privacy.  CHF's submission articulated the thrust of many other submissions stating that 'the Bill does not adequately set out the Authority's essential operational and structural parameters'.[12]

2.6        Reflecting concern raised in submissions about the need for further consultation on the development of performance indicators, the RACGP stated that:

 ...the Performance Authority must consult with relevant clinical experts and health service administrators.  It is vital that developed indicators are relevant, useful, evidence based, and linked to quality and safety improvements.  Consulting with relevant stakeholders will also avoid 'duplication' of data collection...'[13]

2.7        The Western Australian and Victorian government submissions stated that:

 ...the Bill provides no mechanism by which States and Territories, as system managers of the public hospital system, will be engaged in determining the scope of performance reporting by a Commonwealth statutory authority in relation to core State and Territory service delivery responsibilities.[14]

2.8        The AMA's call for the inclusion of further amendments to improve 'clarity around the type and scope of data to be collected'[15] resonates through many of the submissions.  CHA stated that:

The legislation as currently drafted is very broad – indeed vague – on the scope, range and detail of data that will be required to be submitted.[16]

National Seniors Australia similarly stated:

In its current form, the Bill could be interpreted as being limited to medical, dental and pharmaceutical services...National Seniors would like to see the Bill provide greater clarity and definition around allied/primary health and its place in the measurement and reporting of performance health services. [17]

Submissions from NPHCP, the Australian Osteopathic Association (AOA) and Australian Institute for Primary Care and Ageing (AIPCA) also sought clarification and examples of what constitutes "other bodies" e.g. general practices or allied health services....these must be clearly articulated to keep these providers informed and to assist them with compliance.[18]

2.9        Several submissions sought amendments to broaden the prescribed expertise included in the Authority's membership.  The broad concern is articulated by the AIPCA:

[This] focus on regional differences in health system performance is commendable. However, the Committee should also consider what other expertise should be required of the Performance Authority.

2.10       Finally, issues of consent and privacy within the Bill are raised by CHF and Dr Antioch.  CHF argue informed consent should be specified in the Bill, while Dr Antioch argued for further integration of Privacy Act provisions.

Item 130 of Schedule 1: Proposed Section 60 - Functions of the Performance Authority

2.11       The majority of submissions highlight issues with the proposed section 60 which relates to the functions of the Performance Authority (the Authority). These concerns relate to the lack of specificity and definition contained in this proposed section. 

2.12      The RACGP and the AOA raised concern about the lack of a definition of proposed subparagraphs 60(1)(a)(iv) and (v) which left them unclear about whether their memberships would be captured. The AIPCA supported this view:

With the exception of the ―other category, all these entities are defined by the Bill by way of reference to subordinate instruments.... The lack of definition of the ―other category creates both flexibility and uncertainty regarding the scope of the Performance Authority’s responsibilities. For instance, will the Performance Authority monitor individual general practices or pharmacies, both being ―other bodies or organisations that provide health care services? While large-scale performance monitoring of general practices is observed in the UK (the Quality and Outcomes Framework), it is not clear if this is what is intended here. Potentially, the scope of the current section could include other entities within the health system, such as pathology providers. The Inquiry may wish to consider whether the scope of the Performance Authority’s responsibilities requires further definition.[19]

2.13      With reference to proposed subparagraphs 60(1)(a)(iii) and (v),  The AMA advised that although the Explanatory Memorandum states 'that these measures will have no regulatory impact on business and individuals'[20] there is the potential for a significant impact on private hospitals and other bodies or organisations in particular in terms of administrative resources and increased costs.[21]  The AIPCA also raise this concern in relation to overlap in reporting responsibilities between the Authority and the Commission:

[This] will place a substantial administrative burden on individual health services which need to meet the reporting requirements of both the Commission and the Performance Authority.

2.14      The AMA also noted that it considers that the performance indicators formulated by the Authority should be subject to Parliamentary scrutiny:

Accordingly, subsection[22] 60(4) and (5) should be removed from the Bill, thereby making the respective instruments subject to disallowance by the Parliament.

2.15      In Question on Notice No. 7 to the Department of Health and Ageing, the Committee asked about why instruments giving effect to intergovernmental agreements should not be subject to parliamentary scrutiny through disallowance procedures.  The Department's response of 17 May stated that proposed subsection 60(5):

applies to 60(1)(f). An instrument under 60(1)(f) is not stating the law as it applies generally, nor imposing rights, duties or obligations on the public, but simply conferring an additional function on a body that already exists, and which will be subject to scrutiny through the budget and annual reporting processes; and that the Legislative Instruments Act at section 44 specifically provides for the exemption from disallowance of instruments giving effect to intergovernmental agreements.[23]

2.16      The governments of Western Australia and Victoria raised concerns about the potential for a broadened scope of the Authority beyond what they argued had been agreed by COAG under proposed paragraph 60(1)(c). 

The Bill allows for the possibility that the real work of the Performance Authority could be broadened in scope beyond that contemplated in the HoA.[24]

The Bill seeks to expand the powers of the NHPA and the Commonwealth Minister for Health beyond those agreed by COAG by:

Expanding the scope of the NHPA's functions beyond what was agreed by COAG....[25]

2.17      The committee was advised by the Department of discussions underway with state and territory governments aimed at addressing issues regarding the scope of the Authority's work. The central thrust of the Commonwealth's proposed amendments is to ensure that there could be no revision of the Authority's functions under the proposed section 60 without the agreement of COAG. This would apply both to the scope of its monitoring responsibilities under proposed subparagraph 60(1)(a)(v), and the range of functions it may have given to it by the minister under proposed subparagraph 60(1)(f).

2.18      The committee believes that the functions of the Authority as expressed in the Bill are generally appropriate. It understands that some stakeholders would prefer greater clarity around the scope of the Authority's functions, but equally it is appropriate that the Authority have some flexibility in its operations. The committee expects that the Authority will be engaged in extensive consultations to guide its operation, which the strong interest of governments at all levels in its work will help ensure.

2.19      The committee believes that the proposed amendments giving state and territory governments a greater role in setting the agenda for the authority will ensure a high level of consultation across the sector, and should address some of the concerns expressed to the committee.

Recommendation 1

2.20      The committee recommends that consideration be given to specifying greater detail around the processes that would lead to the inclusion of new bodies or organisations in the Authority's monitoring functions, and the granting of new functions to the Authority. The committee believes that amendments proposed by the Commonwealth and discussed with states and territories would be one way to achieve this objective.

Item 130 of Schedule 1: Proposed Section 62 - Additional provisions about reports

2.21      Several submissions expressed concern with proposed section 62 which relates to the scope of reporting on, and consultation with poor performing entities or facilities. The RACGP submission raised concern about identifying individual practices and the possibility for General Practices to be penalised for poor patient outcomes where the contributing factors are out of their control:

Health outcomes in general practice are often dependent on factors that are beyond general practitioners control. Key contributing factors include patient population demographics, socio-economic status, level of education, health literacy, social connectedness, lifestyle, cultural norms and expectations. For example, due to the socio-economic status of the populations, practices in Toorak VIC are likely to experience higher patient outcomes than practices in Sunshine VIC – despite both practices being classified as Remoteness Area 1 (i.e. major city).

Ultimately, general practices in areas of patient need, or alternatively with a high proportion of a particular patient demographic (e.g. high ratios of older patients or Aboriginal and Torres Strait Islander patients), should not be penalised for poor patient outcomes.[26]

2.22      The RACGP's view is supported by CHA's submission that stated:

In reporting on performance, it will be important to clarify those areas where health services have little control over factors which will impact on their performance. For example, in most jurisdictions health services have little control over resources such as IT systems; industrial instruments and mandated use of existing state services, such as pathology. Some of these extrinsic factors may contribute to poor performance and should be considered when developing the measures of performance by the National Performance Authority.

Performance is also heavily influenced by resource allocation. CHA would be concerned if health services that are chronically underfunded are simply seen as poor performers. The relationship between funding and performance needs to be taken into account when the metrics for performance are designed.[27]

2.23      The CHF submission raised concern about how the Authority's reports would incorporate written comment from poor performing entities or facilities stating:

It is important that health consumers have access to complete and uncensored information on their health care facilities, if they are to be able to make informed choices about where to access healthcare.[28]

2.24      Under proposed subsection 62(2) the Authority must invite the Manager of a poor performing entity or facility to provide written comments about the draft report within 30 days after receiving the draft report.  CHA suggested this could be amended to be 60 days based on a system similar to the Australian Council on Healthcare system of a 60 day survey for underperforming hospitals to remedy accreditation failures before having accreditation downgraded:

In designing such a system by which the Authority might notify a health care provider, we suggest the accreditation process of (or something similar to) the Australian Council on Healthcare Standards (ACHS). ACHS uses a '60 Day Survey’ process to enable underperforming hospitals to remedy any areas of underperformance prior to their accreditation being downgraded.[29]

2.25      The NPHCP, however, supports the current timeframe specified in subsection 62(2) and 'considers 30 days a reasonable time period in which to provide comments in normal circumstances.[30]

2.26      The AMA's submission noted that 'there is no requirement in the Bill for the Authority to routinely feedback reports to health care providers and strongly recommended that:

.... the Authority be required to contemporaneously provide direct feedback to all providers of data to allow them to compare their performance against similar providers. Health care services cannot improve in a vacuum: prompt feedback on the outcomes of data analysis will allow providers to review their performance and respond proactively.[31]

2.27      The Premier of Western Australia raised concern that the Authority does not have a performance management role under the National Health and Hospitals Network Act (NHHNA), therefore he considers proposed subsection 62(2) of the Bill to be inconsistent with the COAG Agreements.  The submission states:

Such an approach risks a fragmented and incomplete response from the State and increases the risk of adverse public comment.  Therefore, consultation and liaison with States and Territories should be at a system level, and regarding poor performance only..... Provisions that prescribe direct contact between the performance Authority and LHNs and the individual hospitals should be removed and should be addressed through ongoing performance management arrangements with the States and Territories.

2.28      The Australian Healthcare and Hospitals Association (AHHA) likewise took the view that there should be consultation with state and territory governments in relation to underperforming hospitals.[32]

2.29      The committee understands that discussions underway with state and territory governments propose further amendments to proposed section 62, giving it new objects and setting in place new consultation processes. The amendments would add objects to the section, which would be firstly to assist state and territory health ministers to carry out their responsibilities as health system managers; and secondly to provide natural justice, by ensuring that health ministers and health care facility managers have an opportunity to respond to the drafts of any report indicating poor performance. The amendments would require that any report implying poor performance of a local hospital network or public hospital would be provided in draft form to the relevant jurisdiction's minister, who would be given the opportunity to respond before the report was finalised.

Recommendation 2

2.30      The committee recommends that proposed section 62 be amended to strengthen the natural justice provisions and ensure the involvement of state and territory ministers in the reporting process, where appropriate. The committee believes that amendments proposed by the Commonwealth would appropriately strengthen the section.

Item 130 of Schedule 1: Proposed Section 72 Appointment of members of the Performance Authority

2.31      Under proposed subsection 72(4) the Minister must ensure that at least one member of the Authority has expertise and standing in the field of regional or rural health care needs and the provision of health care services in regional or rural areas.  Several submissions state that the Bill should also prescribe Authority membership expertise in the following areas:

2.32      In addition, Dr Antioch suggested amending proposed subsection 72(4) to include explicit indigenous health representation by amending the subsection to read as follows:

The provision of health care services in regional and rural areas including indigenous health services. (Addition is in bold) This will enable consistency with all Federal–State financing agreements which include indigenous health as an overarching top priority for Australian Governments.[36]

Recommendation 3

2.33      The committee recommends that COAG should consider a broader range of mandated representation on the Authority, and in particular should consider representation of consumers and Indigenous health stakeholders.

Item 130 of Schedule 1: Proposed Section 122 Strategic Plan

2.34      Proposed section 122 relates to disclosure with consent.  Several submissions raise concern that this term should be amended to read 'informed consent' and be consistent with the amendment made to the former legislation, the National Health and Hospitals Network Bill 2010.  The CHF's submission noted that an official of the Performance Authority may disclose protected Performance Authority information relating to the affairs of a person if that person has consented to disclosure under proposed section 122. The CHF also argued this amendment proposed by the Bill should specify informed consent 'so that the consumer or another person who is able to give consent is fully aware of the implications of providing consent'.[37] This view is supported by National Seniors Australia's submission that stated:

National Seniors would like to see the inclusion of 'informed consent' in this provision.[38]

2.35      In its answer to Question on Notice No. 15 responding to the issue of the inclusion of the wording 'informed consent', the Department of Health and Ageing stated:

It is not clear that the term "informed consent” in any way enhances the processes that would need to be undertaken to satisfy the National Health Performance Authority that the disclosure of information is appropriate. It should also be noted that this provision, unlike subsection 58(2) of the National Health and Hospitals Network Act 2011, is not about information which could identify a patient but relates to a much broader range of material which relates to the affairs of a person.[39]

2.36      Dr Antioch suggested that an even wider approach be taken throughout the amendments proposed by the Bill through broader reference to the Privacy Act stating that:

The intent of the legislation in Sections 54(J), 54(K), 54(L) and Sections 120, 121, 122, 123, 124, 127 128 and 129 and disclosure to researchers could be improved with linkage/reference in the Bill to the Privacy Act 1988..... Relevant aspects could be highlighted in the new legislation where appropriate.[40]

Committee View

2.37                The Committee has considered the evidence it received and sought further information from the Department in relation to concerns raised by submitters regarding the amendments proposed by the Bill. The committee understands that there is always a range of issues for stakeholders when reforms as significant as these are being implemented. However, it is satisfied that most of these matters are either currently being considered by ministers, or can be addressed by other means.

Recommendation 4

2.38      The committee recommends that, subject to the recommendations above, the bill be passed.

Senator Claire Moore


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