The federal funding of palliative care in Australia
Funding of the Australian health system is complex and governed by a
number of agreements of the Council of Australian Governments (COAG).
Responsibility for providing and funding health care services is shared between
the commonwealth and the states and territories. Generally:
(i) the states are the system managers
of the public hospital system; and
the Commonwealth has full funding
and program responsibility for aged care (except where otherwise agreed) and
has lead responsibility for GP and primary health care.
The responsibility for palliative care service provision remains with
the state and territory governments although funding support is provided by the
The Australian Government does not
directly fund palliative and hospice care services but does provide financial
assistance to state and territory governments to operate such services as part
of their health and community service provision responsibilities. The use of
this funding and the delivery of palliative care services in each jurisdiction
is the responsibility of individual state and territory governments.
This chapter examines the current funding arrangements for palliative
care. It explores how funding is distributed and whether or not the current
models of funding are resulting in the efficient use of resources and the
effective provision of care.
How palliative care is funded in Australia
The Department of Health and Ageing (DoHA/the department) explained how
the federal government provides funding to support the states and territories
in their palliative care service provision. The department informed the
committee that financial assistance is provided by the federal government as a
part of its national health agreements with the states and that the funding for
palliative care is provided as a part of the funding for subacute care
There are two national partnership agreements that have
specifically provided funding for subacute care...: the National Hospital and
Health Workforce Reform and the National Partnership Agreement on Improving
Public Hospital Services.
...subacute care includes palliative care, rehabilitation,
geriatric evaluation and management and psychogeriatric care—and in this NPA it
also included subacute mental health.
National Partnership Agreement on
Hospital and Health Workforce Reform
The National Partnership Agreement on Hospital and Health Workforce
Reform (the workforce reform agreement) was agreed to by the Council of Australian
Governments (COAG) on 29 November 2008.
The agreement committed $3.042 billion 'to improve efficiency and capacity in
public hospitals'. The two (of four) components of the workforce reform
agreement of interest to the committee's inquiry include the introduction of an
Activity Based Funding approach, and the commitment to enhance the provision of
Activity based funding
The workforce reform agreement described activity based funding (ABF) as
'a management tool that has the potential to enhance public accountability and
drive technical efficiency' by:
(a) capturing consistent and detailed
information on hospital sector activity and accurately measuring the costs of
(b) creating an explicit relationship
between funds allocated and services provided;
(c) strengthening management's focus
on outputs, outcomes and quality;
(d) encouraging clinicians and
managers to identify variations in costs and practices so these can be managed
at a local level in the context of improving efficiency and effectiveness; and
(e) providing mechanisms to reward good
practice and support quality initiatives.
ABF will achieve this through 'the development and implementation' of:
(a) activity based funding for public
(b) nationally consistent
classifications and data collections for hospital provided care including
admitted care, sub-acute care, emergency departments, outpatient sub-acute and
hospital-auspiced community health services [including palliative care, hospital
in the home and other services for which public hospitals are responsible]; and
(c) a nationally consistent costing
model and, if COAG agrees, a nationally consistent funding model for hospital
provided treatment (in admitted care, sub-acute care, non-admitted care
emergency departments and hospital-auspiced community health services) as well
as non-clinical hospital services including teaching and research.
The Independent Hospital Pricing Authority (IHPA), established under the
National Health Reform Agreement, has been given the authority to progress ABF
and although ABF will not commence for subacute care until 1 July 2013 the IHPA
...a process in place now with all jurisdictions. It also has
called for public submissions to see how activity-based funding is best
structured to meet the needs in subacute care, because, while I would hesitate
to say that acute care is simple, it is much simpler than subacute care because
of the venues where subacute care can be provided and what is covered under the
National Health Reform Agreement.
The department explained to the committee that ABF is 'the long-term
real answer to the consistent measurement.'
Stakeholders however, are not without concerns as to how ABF will be
The Victorian Healthcare Association
expressed some concerns of moving palliative care funding into the ABF model:
It is imperative that appropriate funding arrangements
acknowledge the priorities of providing palliative care and do not overlook
patient preferences. However, the current funding arrangements and other
monetary factors, such as patient co-payments and accommodation, skews
palliative care provision towards bed-based options in a hospital as opposed to
services provided ‘in place’.
The introduction of activity based funding (ABF) in
hospital-auspiced palliative care from 1 July 2013 is still yet to be
articulated. The current Palliative Care Resource Allocation Model (PCRAM)
weights funding based on a number of variables including rurality and low
socioeconomic status. It is unclear whether the application of ABF will include
a similar weighting structure. This is of particular concern for block funded
small rural hospitals in Victoria that may be unable to provide the same level
of services under ABF as under the PCRAM if the extra costs inherent are not
taken into account.
VHA members have expressed some concern regarding the
implications of moving these palliative subacute services into an ABF model as
it places restriction on the capacity to truly cater for patient needs. The
transition of subacute services into ABF must allow the mobility of funds into
programs that are in the home and community, not just in hospitals. Home and
community based programs provide specialised, patient-centred medical care and
care coordination that are enabled by block funded grants.
The Victorian Healthcare Association explained its concerns to the
Our members have expressed some concern regarding the federal
introduction of activity based funding through the IHPA, or Independent Hospital
Pricing Authority, mechanisms, and how those mechanisms might play through to
some of the subacute and blended community hospital type models that many of
our members here in Victoria are currently involved in. There are also
discrepancies between what might be available through some palliative care
funding mechanisms and for aged care providers who in fact provide palliative
care at end of life within the residential setting. We need to remember that
the whole construct of residential care is to create a homelike environment.
That environment essentially becomes the substantive home for that resident and
really the access to some of the funding mechanisms that meet the more
deliberate and, perhaps at various stages, the more resource intensive nature
of palliative care should be available within that setting. Currently, it is
quite convoluted and complex for that to occur.
When we talk about efficiencies in palliative care, I note
there is a suggestion that palliative care can reduce costs by reducing
hospital admissions but this part of the conversation is not a cost-saving
driven conversation; it is more to talk about the effectiveness of care
providing the best economic outcome and the best economic outcome will have a
range of considerations including price efficiency, quality of care for the
patient and the consumer driven element of it from an economic perspective.
Palliative Care Australia expressed a view that the ABF model may be too
simplistic, particularly in the multidisciplinary team setting:
At the moment with activity based funding the concept of a
service event is of one patient and one clinician. It does not include people
such as pastoral workers; it only includes the specific clinician. So, if care
was given by, say, a pastoral worker, that would not count within the activity
based funding. And, whilst bereavement care does count, other care of the
family group does not count. That is something that we really need to address
while we are putting the activity based funding together. It does not come into
effect for subacute care until next year, so we certainly have enough time to
address this now, but we need a rethink of what it means.
Eastern Palliative Care Association Inc (EPC)
suggested that ABF will not enable innovation in service delivery as service
providers will no longer be able to allocate the funding they receive as they
consider appropriate and effective. EPC explained how the current funding
method, what they refer to as 'bucket' funding, enables them to do this:
Because we have a bucket of funding that we do not have to
acquit—and the government has said that we must spend 25 per cent on nursing—we
have been able to work around things. We have also been able to get some
philanthropic funds straight to health support. So we have used our funding
very innovatively. The priority assessment team cost us $130,000 for the year,
for a pilot, but the results were so good we just had to incorporate it. Down
the track, particularly with activity based funding, we are worried a little
bit about our funding coming in; we really are. But we find that that program
is so beneficial that we have to look at other things to trim rather than that,
because when someone is desperately needing a service—they are going to die
within seven days—we need to be able to respond to the community well because
that actually helps our profile, that helps the community and that builds a
capacity within the community and people can see that death is not that awful
thing that should happen in a hospital.
EPC also identified the importance of recognising the role of the carer
and the complexity of palliative care in ABF and identified that these are just
two of the risks for the future funding of palliative care:
Ms Moody: Recognition of the carer in ABF. I actually think
that is our biggest one.
Ms Pedley: The complexity of care too... There is the increased
number of carers that we are getting, either who have mental health histories
themselves or their clients have mental health histories. We are palliative
care specialists, but we are dealing with an enormous amount of complexity
within families. More and more, we have people with quite extreme mental health
conditions that make caring for people at home quite difficult. We do it well,
I think, but it is certainly becoming increasingly more demanding, and that
does require more of our time—more planning and input into them.
Ms Moody: One more risk is the impost of occupational health
and safety on our staff. Our staff are out there at night, driving alone in a
car. We provide them with some resources. The technology is not really out
there to monitor them in their car that well. So the impost of occupational
health and safety on our staff and how we have to manage that is another risk.
Although stakeholders were cautious of the ability of the IHPA to
adequately determine the funding needs for palliative care, particularly at the
'more end-of-life palliative care and the higher level symptom management,'
the committee heard that the IHPA has established a sub-acute care advisory
committee comprising palliative care medicine specialists, geriatricians and
rehabilitation positions. The establishment of this committee had allayed the
concerns of some. The Royal Australasian College of Physicians (RACP), a member
of the sub-acute care advisory committee welcomed the establishment of the
The Council of the Ageing (COTA) were supportive of the IHPA being given
the role of 'pricing' palliative care provided it is regarded as a specialist
health service and not merely a component of aged care:
I do not think there needs to be a separate pricing authority
for palliative care. I would have thought that IHPA would be doing it for the
health system as the full suite of health services.
It is important that specialist palliative care is seen as a
health service and that aged care is not asked to pick up a health service.
...Our view is that it is a health service and should be priced
by IHPA, and that pricing should be able to have a look at what is done with
The National Partnership Agreement
on Improving Public Hospital Services
As DoHA explained, funding for the provision of palliative care services
is also provided under the National Partnership Agreement on Improving Public
The National Partnership Agreement on Improving Public Hospital
Services, (the agreement) signed in February 2011, in intended to 'drive major
improvements in public hospital service delivery and better health outcomes for
Australians' by facilitating 'improved access to public hospital services,
including elective surgery and ED [emergency department] services, and subacute
The agreement specifies that the federal government will:
...provide up to $1.623 billion dollars in capital and
recurrent funding from 2010–11 to 2013–14 to States and Territories to deliver
and operate over 1,300 new subacute care beds nationally, in hospital and
community settings, by the end of this period.
The agreement identifies where the new subacute beds will be established:
National Health Reform Agreement—National Partnership Agreement on Improving
Public Hospital Services, Schedule E, p. 45.
It also sets out how the $1.623 billion in funding will be allocated to
deliver these outcomes:
Source: National Health Reform Agreement—National Partnership
Agreement on Improving Public Hospital Services, Schedule E, p. 48.
In response to the committee's questions concerning progress of the
creation of the new subacute care beds, the department explained that as at 30
June 2011, 104 of the new beds created since the government's commitment had
been dedicated to palliative care:
Source: Department of Health
and Ageing, answers to questions on notice (question 4), received 23 May 2012.
The department explained however that the national partnership
agreements provide the states and territories with flexibility to 'redirect
funds allocated across the elective surgery, ED [emergency department] and
subacute Schedules to the highest priority within their jurisdiction'. As a
result, given that subacute care is bundled,
it is 'extremely difficult' to determine exactly how much each state and
territory spends on palliative care and therefore how many of the subacute care
beds will be specifically set aside for palliative care:
[t]he states and territories decide on what they are going to
spend and where they are going to spend it. The Commonwealth has no direct
control in determining that palliative care beds should go to Queensland or
that rehabilitation beds should go to Victoria. The states and territories
provide that. What they then do is provide the Commonwealth with an
implementation plan about how they plan to spend the money, obviously for all
of the NPA funding but this area particularly. Then they provide us with progress
reports on a six-monthly basis.
While explaining the difficulty associated with determining the amount
that each state and territory spends on palliative care, the department also
informed the committee that at present the federal government has no consistent
or standard reporting mechanism to review how the states and territories
allocate the funding they receive under the agreements:
It has been an ongoing concern for the Commonwealth. Most
states report in a similar manner, but not all states do. They all come out of
very different reporting systems. We looked at subacute care as a total.
Rehabilitation is the most advanced in reporting because they simply seem to
have had more systems in place for a longer period of time. All of the other
areas of subacute are still under some level of development and the states and
territories have taken individual approaches to that.
As explained above, the new NPA on Hospital and Health Workforce Reform
has introduced a requirement for standardised reporting. The department advised
the committee that progress on standardising reporting has been made and that
they hope to have 'something' that has a 'fairly consistent approach' to the
COAG Reform Council in the 'next couple of months'.
The department explained that this information should eventually be published
and although complete consistency will not be possible, explanatory information
will be provided where it differs.
The department explained that the information will be used for
'measurement and counting' under the ABF model.
Professor David Currow, professor of palliative and supportive services
at Flinders University, suggested to the committee that the 'key challenge' of
funding is to ensure that it is maintained at a level 'that genuinely reflects
the improvement in health that can be delivered across the community by good
Professor Currow suggested that what was needed was a review of how resources
are utilised within current budgets.
In addition to funding provided under the National Partnership
Agreements, the government also provides funding for palliative care through
the National Palliative Care Program (NPCP) which was established in 2002.
The National Palliative Care
The NPCP funds initiatives to ensure quality palliative care and to
improve access to services for people who are dying and their families.
The NPCP aims to achieve these outcomes by providing funding support in
the following four areas:
- support for patients, families and carers in the community;
- increased access to palliative care medicines in the community;
- education, training and support for the workforce; and
- research and quality improvement for palliative care services.
Support for patients, families and carers in the community is provided
by the NPCP through the provision of grants to 'local groups, health and aged
care providers and church and charitable organisations' to assist these groups
provide services and support for palliative care recipients and their families.
Funding to support increased access to palliative care medicines in the
community is provided to the Palliative Care Clinical Studies Collaborative
(PACCSC). The PACCSC:
...manages multi-site clinical drug trials in order to gather
the scientific evidence required to register palliative care medicines on the
Australian Register of Therapeutic Goods and possible listings on the PBS.
The NPCP supports education, training and the palliative care workforce
through the Program of Experience in the Palliative Approach (PEPA). PEPA is 'a
work placement training program for health professionals in a specialist
palliative care service of their choice.'
The fourth area through which the NPCP supports improved access to and
quality of palliative care services is through the provision of funding for:
- [the Palliative Care Outcomes Collaboration (PCOC)] a consortium
of four universities forms the Australian Palliative Care Outcomes
Collaboration. PCOC supports services to consistently compare and measure the
quality of their outcomes, and through this ensure continued quality
- [t]he Palliative Care Research Program, managed by the National
Health and Medical Research Council, [which] aims to improve the quality of
palliative care, inform policy development, improve clinical practice and
develop researcher capacity, by funding priority driven research grants,
training awards and research development grants;[and]
- [t]he Palliative Care Knowledge Network (CareSearch)... a web-based
one stop shop of information and practical resources for clinicians, other
health care professionals providing palliative care, researchers, patients and
Calls for funding changes
Throughout its inquiry, the committee received evidence which suggested
there is much inconsistency in the standard of palliative care delivered in
Australia. The committee sought to understand the inconsistencies by reviewing
the funding of palliative care. The committee's findings suggest that the
inconsistencies may be in part the result of the complexity of the funding
In their submission to the inquiry, Palliative Care Australia (PCA), the
peak national organisation 'representing the interests and aspirations of all
who share the ideal of quality care at the end of life for all' explained that
there is not enough funding dedicated to palliative care and as the method of
funding these services has changed over time there is 'definite jurisdictional
Stakeholders were consistently critical of the current way in which
funding for palliative care was distributed and although views differed as to
what should or could be done, the theme common amongst all was the need for
increased transparency in how 'bundled' funding was allocated.
PCA were of the opinion that funding should be 'ring fenced':
I think you have to ring fence the funding for palliative
care... So long as it is bundled in with subacute care, and the different states
and territories will make a decision as to how that is divided up, it will tend
to be spent on things other than palliative care. That has been the indication
PCA identified in their submission that:
Of its $39,973 sub‐acute
funding South Australia committed $11,970 to palliative care. On the other
hand, Queensland allocated none of the sub‐acute
funding to palliative care, but committed to undertake a review of the current
palliative care service system in 2009‐2010
from within existing state funding, and develop a strategic direction for
palliative care. This service provision review has been undertaken, but not
Palliative Care Nurses Australia raised similar concerns regarding
At present, that funding comes from the Commonwealth to the
states, who then decide how that funding is disbursed in that state. Most
palliative care takes place in the community, but the funding break-up does not
always reflect that. While this is anecdotal—they do not have statistics to
back it up—a lot of palliative care funding goes into the more acute areas,
rather than the community.
PCA, which has membership across Australia went further to state that:
We know that many more Australians would benefit from access
to palliative care, yet it is clear that bundling funding allocations within
category is not leading to improved service provision and access across the
If such bundled allocations continue, whether or not in
conjunction with Activity Based Funding, a significant level of funding must be
specifically allocated to palliative care (as a minimum) to ensure greater
access to quality end of life care for Australians in need.
Despite these concerns however, the RACP explained that in their view,
funding for palliative care must remain flexible to 'encourage innovative
service delivery' and ensure 'the population has access to the right care at
the right time and in the right location with the right provider:'
Funding arrangements must encourage palliative care services
in a location that best reflects the patient's needs and the patient's choice.
The college fully supports adequate funding for modern, responsive palliative
care services which allow for this quality service.
In its submission to the inquiry, the Australia New Zealand Society of
Palliative Medicine (ANZSPM) explained that processes should be introduced to
ensure that state and territory governments are accountable for the spending of
A major source of funding over the last few years has been
the NPA subacute care funding. This money has been distributed to States and
Territories, and covers four areas of subacute care – Palliative care,
Geriatric Evaluation and Management, Psychogeriatrics and Rehabilitation. In
the initial funding round all States and Territories were required to publish
their implementation plans; these were available to the public. The detail of
these plans varied from having no breakdown of monetary allocation, to detailed
distribution of funds between the different subacute care areas.
Unfortunately, in the second round of funding, there has been
no publication of the allocations. The difficulty with the way in which the
money has been distributed, is that our members have experienced frustration,
firstly at the lack of actual distribution of money, and secondly at what is
seen as distribution according to political motives rather than the needs of
patients. Many members have complained at the lack of benefit from this money
for palliative care provision across Australia.
Recommendation 6. That the Commonwealth ensures that funding
for the National Partnership Agreement (NPA) for subacute care:
- is allocated according to population-based needs;
- has its distribution linked to a clear improvement in the quality of
- is transparent, and that details of allocation/distribution are made
publicly available to ensure that State and Territory governments and LHHN
(Local Health and Hospital Networks) are accountable for the use of this
Although it did not directly comment on the bundling or unbundling of
care, Mercy Health also suggested to the committee that in their experience a
speciality like palliative care should not be funded episodically:
...episode funding is not an appropriate way to fund a
speciality which provides services across both the acute and non-acute sector.
Specifically, palliative care provided in the acute setting is not recognised
in the current funding model.
Submitters however suggest that without sufficient data, the effective
allocation of resources will be difficult to achieve. PCA explained that
funding is linked to data and at present the data collected for palliative care
purposes is deficient:
...we need to find out and get good data about how and where
palliative care is delivered now... We need to know how it is delivered now so
that we know exactly how large the gaps are and where the gaps are.
Another way that we can look at it is to ring-fence some
funding for palliative care in the funding that goes out to the states. If
there is money going out in the subacute bucket, we need to ensure that there
is money ring-fenced for palliative care. It is not necessarily the easiest
thing for states to disseminate funding in palliative care. It is often easier
to build a bed in a rehab ward than it is to set up a good palliative care
service that reaches into the community or to better support such a service.
The complexity of funding palliative care
Throughout the committee's inquiry it became clear that the nature of
palliative care is extremely complex. The fact that palliative care can be
required for people from all ages and backgrounds, not just the elderly who
reside in aged care facilities, adds to the complexity that is introduced by
the joint funding of care by both the federal government and the states and
Mr Peter Cleasby, President of Palliative Care New South Wales,
succinctly explained the complexity when he informed the committee:
As long as we have a federated model, there will clearly be
issues about who is responsible for what. What we want to say is that we have
the situation in Australia where Palliative Care Australia, which works
primarily with the Commonwealth, is the national entity and a good number of
great things have been delivered...but, unfortunately, at the state level across
the country, the state bodies are struggling big-time to play their role with
their local jurisdictions.
...There is a problem with the coordination and I think the
Commonwealth is missing out on an opportunity to get a better return on
investment. There does not seem to be an overall strategic management of these
projects and taking them elsewhere, and finding out what has developed in one
state actually can be translated to another state without each state having to
do it themselves.
Dr Yvonne Luxford, Chief Executive Officer of Palliative Care Australia,
suggested that although there are both advantages and disadvantages of the
federated system, simply consolidating the responsibility for funding the
provision of care would not guarantee 'the best possible care or the best
possible equitable division of funding':
Just having one funder does not guarantee that you get the
best possible care or the best possible equitable division of funding. Perhaps
what we need, rather than moving towards one funder, is for the funding to
really recognise what is needed and the level of need out there and to ensure
that the funding is fairly distributed.
When discussing the issue of whether or not funding of palliative care
should rest with the federal government or the state and territory governments,
submitters pointed to the example of aged care which has, through the decisions
of COAG, become the sole responsibility of the Commonwealth and is funded
through the Aged Care Funding Instrument (ACFI). However, given the
complexities involved in the provisions of palliative care, palliative care
services provided through the ACFI, which primarily funds aged care facilities,
will not apply to those people requiring palliative care yet who do not meet
the aged care threshold requirements.
Catholic Health Australia explained that although the ACFI '...as a tool
is a very useful way of funding services into residential aged-care providers'
it does not extend past residential aged care provision and into the community
BlueCare identified other limitations of the provision of palliative
care under the ACFI:
At the moment, often providers do not claim for the
palliative care component of ACFI and there are two reasons for that. Firstly,
it comes under the complex care needs area. Often if you have already reached
your ceiling point under the ADL section then you do not need to add the ten
points that you would get from palliative care because you will not get any
more money. The number of claims that go in for palliative care probably do not
reflect the number of palliative care clients that are in the system because
from a paperwork perspective there is no added value to reclassifying people
when they become palliative care patients. I am not sure if that will be
changed; we have advocated for that.
Professor Parker further explained the difficulty accessing palliative
care funding under the ACFI given the requirements that 'a GP or specialist
nurse sign off on a palliative care plan', both of which are rare in the
residential aged care setting.
Professor David Currow, a professor of palliative and supportive
services at Flinders University suggested to the committee that the 'key
challenge' is to ensure that funding of palliative care is maintained at a
level 'that genuinely reflects the improvement in health that can be delivered
across the community by good palliative care.'
Professor Currow suggested that what was needed was a review of how resources
are utilised within current budgets. He told the committee that:
This is not about more money; this is about ensuring that we
distribute that money in a way that genuinely engages in ensuring that the
health of the whole community is a focus.
PCA explained that what they consider is needed is for:
...all levels of government to fund palliative care services
using appropriate, equitable and needs based models. Funding needs to be
flexible and delivered both as block funding and as activity based funding.
Development of the new activity based funding models must recognise that
palliative care is unique in its holistic and multidisciplinary nature and that
its caring encompasses loved ones and carers in addition to the person with the
terminal illness. We need to maintain an effective and appropriate high quality
service through ensuring that all locations engaged in end-of-life care adhere
to the national palliative care standards. Such national standards will ensure
a basis for uniformed consistency in approach to palliative care across the
In the Productivity Commission's (PC) recent inquiry report into aged
care in Australia,
the PC recommended that aged care services be provided through an entitlement
system which would involve Australians being assessed to determine their needs
and therefore their entitlement to different care services. Throughout its
inquiry process the committee sought to explore how palliative care service
providers consider the introduction of an entitlement based system would
address the needs of palliative care recipients.
Dr Alan Rouse of the Tasmanian Health Organisation (North West) told the
committee how the Tasmanian Health Organisation would be able to provide more
services for palliative care if the funding for those services was available on
an entitlement schedule:
[An entitlement schedule – a Medicare schedule]... would be a
great idea. One of the examples that I will put to you is: these medications
that people need within nursing homes, for example, to stop pain. I am talking,
for example, about the person who falls very near the end of their life and has
a fractured hip. One of the options is a hospital spending $15,000 to $20,000
fixing it so that they can either die in hospital or come back to the
residential aged-care facility and die in the days after. We have medications
that cost, maybe, $50, which people are reluctant to purchase because they have
no money. The alternative is $50 versus $15,000. If these aged-care facilities
had access to these medications that were able to afford them on the residents
behalf, then we would see even more savings.
Ms Angela Raguz, General Manager of Residential Care at HammondCare said
of the PC's report:
The Productivity Commission has done a good job in
understanding and looking at what the issues are that are facing aged care and
the reality of how this industry is going to be sustainable over the period of
time where we have an explosion of older people. What is lacking is the answer
to the workforce question... we can do a lot in our aged-care services and we can
certainly do that at a more efficient price for a long period of time,
especially with the entitlements system coming into place, than what the public
health system is able to offer.
The challenge is making sure we have got the people with the
skills, the knowledge and the experience to do that across a broader base.
Without that, it can get stuck. We have seen it with our palliative care suite:
if we were not an organisation that had a schedule 3 hospital that provided
specialist palliative care services, it would really not be that easy to get
those things up and running and off the ground. It is about how we get those
experts to come on board and to move beyond that view: 'Oh, it's aged
care—that's a bit daggy. I don't want to spend time in aged care.' For young
doctors and nurses it is not the sexiest part of the industry to select. So it
is about getting it within undergraduate training, looking at training people
on the ground in the nursing homes across a broad scale. And it is not just
about setting up distinct units, even though that is an ideal. It is about
lifting the bar across the whole of aged care, be it in people's homes or in
... It is a whole-of-system question that needs to be answered.
If GPs are the primary care physicians, there needs to be a lot of effort and
emphasis put at that level as well.
Associate Professor Rohan Vora, President of Palliative Care Queensland
agreed that the Productivity Commission's entitlement system would go some way
towards addressing the funding of palliative care in the community palliative
setting, particularly if there were an entitlement for case management:
It could do. I guess we would need to have a look at and see
what system You have the MBS item system for Medicare. There are a whole lot of
gaps in that as to how you fund allied health, how you fund coordination of
services—it is a range of things. GPs face exactly the same problem. Their
phone calls and coordination of services are not funded; it is your patient in
front of you at the time. Of course, in palliative care it is not just the
patient in front of you; it is the family in front of you or the family that
cares for the patient that needs to somehow be in that.
Professor David Currow, Professor of Palliative and Supportive Services
at Flinders University informed the committee of his view in relation to an
entitlement based system, in particular, a system which included palliative
care services in the entitlement system:
The issue is that palliative care permeates the entire health
and social system. The question is: how do we best ensure that people, wherever
they have contact with services, are going to be able to get timely,
well-planned, proactively considered services? As we think about entitlements,
we are talking about the ability to actually say, 'This person now has a
life-limiting illness.' At a community level, that will be a huge shift. I
think the United Kingdom, particularly England, have made that shift in the
last few years, and they have started to create primary-care registers, which
have a whole lot of flow-on effects in terms of the entitlements for that person
and their carers.
As I pointed out, the one thorn in the side in Commonwealth
paperwork at the moment is the carers allowance, which asks a professional to
actually prognosticate—and we are either very good at that or very bad,
depending on which literature you read—and then hand it back to that family to
take to Centrelink. We have to change it.
... We need to change that. If there is one really practical
thing we can do today, it is to change that Centrelink paperwork, because it is
Professor Currow also informed the committee that should an entitlement
approach to funding be taken it would be important to ensure that it did not
result in 'perverse' outcomes:
By way of how we best provide services, we need to ensure
that there is continuity and that there are no perverse incentives, as we think
about an entitlement system. We need to think through that very carefully.
There are times that hospital—not a hospice, not an aged-care facility—is
actually the best place to provide care. And we need to make sure that we do
not go down the path of the American system, where their entitlement system has
in fact limited hospice and palliative care services and led to some very
perverse incentives in how those services then work.
The Victorian Healthcare Association (VHA) informed the committee that
the PC's recommendation to move to an entitlement system was 'consistent with a
I would say that would not be inconsistent with some of the
key themes that we would see as potentially adding value, particularly from
that funding side of the equation. If the person in receipt of the care is
actually in control of the funding and determining from an appropriately
referenced panel of providers, presumably, where they purchase their services
from, I think that is a terrific model.
The VHA suggested that if such a system were to provide fairer access to
services and resulted in greater funding flexibility they would 'generally' be
I say generally. The proviso and the concerns that we have
had in the past have been around some of the smaller rural communities, where
there is not an active market. Sometimes in those communities you can get
skewed outcomes, or unintended outcomes as opposed to skewed outcomes, as a
result of that type of approach. The viability of those public health services
in smaller rural communities is really quite critical to the way in which those
communities see themselves. So we have got to be careful with all of the
funding leavers that those unintended consequences do not flow. With that
proviso, I think generally where there is an active market then that should be
The VHA went on to explain that the difficulties associated with those
in residential care receiving better access to resources could be 'overcome'
through such a system:
If the person in residential care ended up requiring
palliative care they should, by definition, because that is their principal
place of residence, be just as eligible to the entitlement voucher as the
person still living in the community. The complicating factors always are that
the person is an environment where they are already receiving some care so to
what extent should that be discounted or should that other care be taken into
...You have the one element where the person in the community
might still be living at home and therefore not paying 87½ per cent of their
pension for the residential care they are in receipt of, but then the person in
residential care does not have the maintenance cost of a home. There is a
variety of debates. The fundamental thing is that the entitlement should not be
any different because of the percentage of pensioners paying for residential
care, not necessarily for palliative care.
The Special Interest Group of the Occupational Therapists also explained
that given the importance of multidisciplinary teams in the provision of
palliative care, any move to an entitlement system would need to be coupled
with a broadening of the definition of 'health professional' to ensure that allied
health professionals were included particularly to support people staying
longer in the community before necessarily entering aged care or hospice
Ms Bourke: I think that is an access issue that occurs
outside of the specific pall care units where there is a higher profile. There
is that trickle-down effect. Someone sees the patient and has to think to refer
to you. If they do not, it does not happen. Or they might then ask someone to
write the referral, and it might not happen. I would be interested to know the
people who probably need it and have it translate into an actual referral, but
I think it would be a very tiny number compared to the unmet need that has been
Ms Boffa: I had an interesting conversation with someone in
the community yesterday. It was very clear that this person is receiving
in-home palliative care. The focus of that care is very much about bed based
care and not acknowledging that there were functional goals or quality of life
issues that might also be addressed as part of that care. I think that nursing,
bed based terminal care thought process or view of things does limit the
likelihood of the generation of a referral and acknowledging and identifying
functional goals and quality of life.
When Resthaven, a service provider, was asked to comment on the
Productivity Commission's suggestion they identified a number of issues that
may present in developing an entitlement funding framework:
What we would understand is that an entitlement assessment is
an assessment at a point in time. If the pricing was correct at that time then
the matching of, as you describe it, the assessed need and the payment that
goes with that assessed need would work at that time. The challenge that I
think we all face is what happens five minutes, five days or five months after
that time and, in a system which requires a sense of independence in the
assessment of that need, how does that practically work for people who are in a
changing phase? That is the whole dilemma with anything associated with
palliative care; it is often not until after the person is deceased that you
can map back and see what the signs were where you could say that this person
was very obviously in their terminal phase for the last few days of their life.
But the practicality of having an assessment in a timely way which then gets
those resources in—particularly if that assessment has to be done by an
independent, separate body making those assessments before the provider could
move into that space—those are the procedural and technical issues that go with
designing these systems. What we are saying at the moment is that there is
provision in the existing ACFI system and there is a pay point associated with
making a claim for palliative care. Our experience of that has been that it is
very legitimate to make that assessment.
The process of reviewing that decision sometime later by
somebody who is reviewing the paperwork rather than reviewing the person, and
therefore making that assessment—
... It is really problematic. So what we see is either that
there is an underclaiming of those payments [or a subsequent clawback] ...
because with hindsight people are being very cautious in terms of when they are
making those claims, which is probably too late, so then the funding is not
necessarily supporting that as well as it might.
Resthaven explained that one of the problems facing the sector and
reform is the fact that there has never been a mechanism to formally cost any
aspect of aged care, including palliative care:
The point that we have made in our submission is that there
has been no formal costing study of the actual costs of care for any aspect of
aged care. There is a historical pattern in terms of designing that.
...So I think that if we were going to move down a path which
assumes some relativities in terms of the payment models as you are describing
them—which is effectively how funding works in health as you have described
it—then as an industry we would want to be very comfortable that the starting
point was actually a real rather than a theoretical starting point.
Professor David Currow reminded the committee however that although the
majority of palliative care recipients may be residing in aged care facilities,
palliative care applies across the entire spectrum of the population, not just
aged care, and that one in three people who die expected deaths are under the
age of 65:
We also need to be incredibly clear about the demography of
the people who are seen by palliative care services—that is, the people who die
expected deaths in our community. One in three of those people are under the
age of 65. It is important that we acknowledge the full age spectrum as we
start to think about the services that need to be provided. Excluding dementia,
for every two people seen with cancer it would be expected that a person with a
non-cancer diagnosis would also be seen. We have a national strategy; we need
to back that, to resource it and to implement it.
Settings of care – cost, effectiveness and efficiency
Throughout its inquiry the committee received much evidence from
palliative care service providers. The information detailing the different ways
in which services are delivered further highlighted the complexity of
adequately funding the provision of quality palliative care.
Palliative care is provided in many settings: in hospitals; in the
community through not-for-profit organisations/charities; and in aged care
facilities and hospices. As discussed above, funding of the services provided
through these different models is a complex arrangement of state and territory
government money, federal government funding and grants, and bequests and
donations from community members.
The committee consistently received evidence which clearly identified
that the cost of providing palliative care in the community setting is cheaper
and often more effective as the majority of people prefer to die at home or in
a community setting rather than in a hospital.
Palliative Care Queensland highlighted the risks of not adequately
funding the provision of services:
For a lot of us, the issue almost becomes can we afford
palliative care? ... if we do not do it they [people requiring palliative care
services] end up in the acute system. They queue at emergency, they ramp at
emergency and end up in an acute bed, so you are doing it anyway. It is just
that you are doing it not in a very good way and it is costing a lot of money.
It is hard to know how much cheaper it is... we know that an acute bed in the ICU
is $4,000 to $7,000 a day. If you are talking about an acute bed in a hospital
it is probably around $1,000 to $1,300 a day... a palliative care bed in
Queensland is costed at about $950 a day. We know that if you go down to a
step-down facility where maybe you do not have as much need for acute intervention,
pain management and a whole lot of ancillary services, it is probably around
$600 or $700 a day. And in a nursing home, as we heard before, maybe it is $150
to $200 a day above what is already subsidised to put in the extra care. So it
all depends on where the person is.
Of course, we know that, if they are at home and looked after
by a carer and want to exploit the carer and pay them nothing, it may be $60 or
$100 a day—
EPC highlighted to the committee that the cost of community based care
is significantly less than hospital based care even though the average length
of stay in the community setting is much greater than that of a hospital stay:
In 2009, the average cost per episode of care in a sub-acute
hospital was $7,654; in the community the average cost per episode was $2,546.
An episode in a hospital was 14.7 days; the average length of stay in the
community was 133 days. People may have many hospital admissions during their
condition. The cost benefits are clear, however, there are really much more
than cost-benefits. We have become so used to going to the specialist each time
we are sick that we fail to realise how much we can manage at home and what our
real wishes are.
Dr Leslie Bolitho AM, President of the RACP suggested that at present
the sector faces a 'perfect storm' – 'an ageing population, increasing rates of
complex and chronic disease and ever-tightening resources.'
In view of the benefits that could be gained, not only in terms of patient
preference, but also to health care budgets, the RACP suggest shifting the
provision of palliative care to the community sector rather than relying on the
The committee supports the development and introduction of nationally
consistent classifications and data collections for hospital provided care and
the development of a nationally consistent costing and funding model for
hospital provided treatment which will flow from the introduction of activity
based funding (ABF). The committee however does share the concerns of witnesses
and submitters to its inquiry that ABF will not adequately account for the
complexity of palliative care including the different disease trajectories
associated with life limiting illnesses, the different settings in which
palliative care can be provided and the key role that multidisciplinary teams,
including allied health professionals, play in the provision of care.
The committee acknowledges that the Independent Hospital Pricing
Authority, responsible for progressing ABF, has established a sub-acute
advisory committee which includes palliative care specialists in its
membership. The committee is not convinced however that the establishment of
such a committee will go far enough in ensuring that the unique attributes of
palliative care, including the fact that the outcome being sought is rarely
curative, will address the specific funding requirements which it has
identified throughout its inquiry.
The committee notes that under the National Partnership Agreement on
Improving Public Hospital Services, funding for palliative care is bundled with
funding for subacute care and states and territories are given the flexibility
to redirect the funding as they consider is necessary. The committee
acknowledges the need for flexibility in funding palliative care given the many
settings in which care is provided however is concerned that at present there
is no consistent or standard reporting mechanism in place to review how money
provided to the states and territories is allocated. The committee is concerned
by this situation despite the requirement of the COAG process that each state
and territory government to provide implementation plans.
The committee recognises that ABF will introduce a method of measuring
and collecting data but considers that the complexity of providing palliative
care make its funding a unique challenge. The committee considers that some
flexibility needs to be retained as to how each state and territory allocates
its funding given their differences in terms of geographic size, dispersion,
population, and demographics. However, the committee regards accountability as
critical and calls on the government to ensure sufficient governance structures
are in place.
The committee suggests that palliative care differs in nature from the
other types of 'sub-acute' care, and this warrants it being considered as a
separate funding category. The committee also considers that recognition needs
to be formally given to the role of the community sector in the funding
arrangements for palliative care, given that evidence clearly shows the cost
benefits that can be achieved by transferring the provision of palliative care
to the community setting rather than the hospital based environment.
The committee received evidence in relation to the Productivity
Commission’s suggestion that the aged care sector moves to an entitlement
system (one in which diagnosis would determine funding entitlement and the
funding entitlement would follow the patient through the system). The
Committee recognises that life limiting illnesses are not limited to those
Australians who are aged – palliative care service recipients cross the age
spectrum and although generally it is assumed the majority reside in aged care
facilities or within the community, this is not always the case. The Committee
recognises the concerns that this raises, however, this ought not necessarily preclude
palliative care being included in any future move to an entitlement system in
the aged care system. Reforms should take account of the complexities of
The committee considers that at times it is forgotten that disease does
not discriminate. Although longevity increases the incidence of incurable
illnesses such as dementia, incurable and life-limiting illnesses can be
suffered by anyone, from the very youngest to the very oldest members of
community. Funding mechanisms should reflect this fact, and ensure care is
delivered in accordance with the WHO definition of palliative care.
The committee recommends that the Australian government considers
extracting palliative care from the sub-acute care category and create a new
funding category of 'palliative care'.
The committee recommends that in determining the appropriate costing for
palliative care services the costs of providing care in the community sector
also be calculated and allocations made to support the provision of palliative
care services by this sector. The committee acknowledges that any allocations
of funds to community sector service providers would require rigorous and
transparent governance arrangements to be established.
The committee recommends that the creation of a new palliative care
funding category should result in the establishment of a palliative care
advisory committee by the Independent Hospital Pricing Authority to advise the
Authority on appropriate costing for palliative care services consistent with
the activity-based funding approach.
The committee recommends that the development and introduction of
consistent national data collection specifically provide for the recording and
reporting of palliative care data.
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