Proposed merger of the Organ and Tissue Authority and the National Blood
The initial work of the committee has focused on the concerns arising
from the 2014-15 Budget.
The committee has also examined a specific instance of the
'efficiencies' proposed in the 2014-15 Budget: the merger of the Organ and
Tissue Authority (OTA) and the National Blood Authority (NBA).
No justification was given in the National Commission of Audit report
for the merger of the OTA and the NBA. The government accepted this
recommendation, seemingly without analysis, in the 2014-15 Budget.
This chapter examines the effect of the proposed merger.
The Organ and Tissue Authority
An independent statutory agency established in 2009 under the Australian
Organ and Tissue Donation and Transplantation Authority Act 2008, the OTA:
works with state and territory stakeholders to deliver the national
reform programme on organ and tissue donation; and
leads the DonateLife Network, a part of the national reform
programme and comprising of DonateLife organ and tissue donation agencies and
hospital based staff in 72 hospitals across Australia.
National Reform Programme
The National Reform Programme (NRP) was announced by the Australian
Government on 2 July 2008 and endorsed by COAG on 3 July 2008. In essence
the NRP was 'to implement a world's best practice approach to organ and tissue
donation for transplantation.'
The aims of the NRP include to:
increase the capability and capacity within the health system to
maximise donation rates; and
raise community awareness and stakeholder engagement across
Australia to promote organ and tissue donation.
The NRP comprises nine key elements to:
establish a new national approach and system for organ and tissue
donation: a national authority and network of organ and tissue donation
establish specialist hospital staff and systems dedicated to
provide new funding for hospitals;
provide national professional education and awareness;
provide coordinated, ongoing community awareness and education;
provide support for donor families;
establish a safe, equitable and transparent donation and transplantation
national eye and tissue donation and transplantation; and
undertake additional national initiatives, including living
Since the establishment of the OTA, there has been significant
achievement against each element, including a significant increase in organ
donation in Australia.
Prior to the establishment of the OTA in 2009, organ donation levels in
Australia were at a record low. The Gift of Life Incorporated has observed that
the work of the OTA and its single focus on organ donation has had a dramatic
effect on the rate of donation:
Since 2009, there has been a 43% increase in the number of
organ donors in Australia (354 in 2012 compared to 247 in 2009) and a 30%
increase in the number of transplant recipients (1,053 in 2012 compared to 808
in 2009). So far in 2013, there has been a further 18% increase (334 donors to end
October compared to 285 last year).
Transplant Australia has outlined the direct benefits to the Australian
economy from reducing the transplant waiting list:
Ongoing treatment for patients on the waiting list is not the
only cost. There are also socio‐economic
effects such as loss of employment/income, the breakdown in relationships,
absenteeism from education, an increase mental illness, physical and
psychological changes, and loss of quality of life.
In 2006, Kidney Health Australia commissioned a report titled The
Economic Impact of End-Stage Kidney Disease in Australia. Amongst other
findings, Kidney Health Australia reported on the direct cost of dialysis
treatment compared to the cost of treatment through a transplant:
Each year, dialysis treatment for a person with end stage
kidney disease costs $84,000. The cost of transplantation from a live donor is
$75,000, with ongoing treatment for the recipient with medications costing
about $11,000 annually. In the case of a deceased donor, the cost of a transplant
is $65,000 with ongoing treatment for the recipient costing about $11,000
These are direct costs regarding the transplant. However,
what they do not take into account is the benefits to society and the economy.
Once a person has received an organ transplant, more often than not they are
able to return to a relatively ‘normal’ lifestyle, which includes returning to
employment, playing sport, travelling and family life. In some cases,
recipients have gone on to start a family themselves. These benefits to society
have a positive impact far broader than the direct financial impact on the
The benefits of organ transplantation to both the recipient and the
broader society are undeniable.
The National Blood Authority
The National Blood Authority (NBA) is an independent statutory agency
within the Health portfolio that manages and coordinates arrangements for the
supply of blood and blood products and services on behalf of the Australian
Government and state and territory governments. It was established by the National
Blood Authority Act 2003 following the signing of the National Blood
Agreement by all state and territory health ministers in November 2002.
The NBA represents the interests of the Australian and state and territory
governments, and sits within the Australian Government’s Health portfolio. The key role of
the NBA is to:
provide an adequate, safe, secure and affordable supply of blood
products, blood related products and blood related services; and
promote safe, high quality management and use of blood products,
blood related products and blood related services in Australia.
The work of the NBA involves work with state and territory
governments, risk planning in relation to ensuring blood supply, and
contracting with suppliers of blood and blood products.
In its Phase One Report (March 2014), the National Commission of Audit
recommended the consolidation, abolition or merger of a number of government
agencies, authorities, companies, boards, councils and committees. The
Commission argued that many of these bodies not only duplicated work within the
Commonwealth Government, but also duplicated and overlapped the functions of
the State Governments.
Among the bodies identified for merger are the OTA and the NBA. The
Commission recommended that these two authorities be 'brought together within
the department to harness expertise'.
The government responded to the recommendations of the Commission
of Audit regarding the consolidation of government agencies in its 2014-15
Budget. The Budget outlined the agencies and bodies which would be abolished,
merged or consolidated, including the OTA and NBA. The collective 'savings' to
be made from the merger, abolishment or consolidation of the agencies identified
by the National Commission of Audit are estimated in the Budget to be $19.4
million over four years.
The proposed OTA/NBA merger is but one of approximately 76
official bodies the government proposes to disband before July 2015.
To put the savings from the OTA/NBA merger in context, the $19.4 million
savings figure represents the aggregate figure expected from the abolition of
the 76 government bodies.
Evidence from hearings
As part of its examination of the 'savings' to be made from a merger
between the OTA and NBA, the committee held a hearing with each organisation.
Officials at the hearings advised that work was proceeding on the
implementation of a merger and the anticipated savings to be made. However,
neither the OTA nor the NBA was able to provide advice on a quantum of savings.
The only explanation of possible efficiencies came from Mr Leigh McJames, Chief
Executive Officer of the NBA:
I cannot quantify those savings. There are a range of options
and they are under consideration by government but I can indicate that when we
have looked at it there are administrative savings that are not even related to
staff. To give you an example, you have two organisations in separate buildings
when you bring them together there is a saving in rental space straight off
because you cut the number of meeting rooms you require. That has utility
savings—you only need one IT system; in terms of governance overhead you reduce
the requirement so that instead of having two audit committees you only have
one audit committee, you only have one set of auditors, you only have one set
of annual reports and so that list goes on. There are the administrative
overheads. Some of those efficiencies are already being realised. An example is
sets of policies—as an independent statutory authority you have a reasonably
large overhead in terms of generating policies to adhere to legislative
requirements. One agency will only need one set of policies...
When asked a direct question on notice about potential savings, the NBA
could not provide any specific details:
The National Blood Authority, Organ and Tissue Authority and
Department of Health are continuing to develop advice for Government that will
lead to decisions on implementation of the merger, including any savings. This
advice forms part of the deliberative process of Government, and therefore it
is inappropriate to release it at this time.
Similarly the OTA could not assist in response to a question on notice
which sought documents and information regarding the OTA's work on implementing
The committee notes with concern that rates of organ and tissue donation
in 2014 are trending below 2013 outcomes.
The committee considers the potential savings to be negligible and the
effort and disruption required to achieve them unwarranted. The committee
believes that the detriment caused by uncertainty for staff members and
confusion for stakeholders, including state and territory governments,
outweighs any potential benefits.
Further, the committee believes that merging the OTA and NBA has the
potential to be damaging to the achievement of the aims of the OTA's National
Reform Programme. Although it may seem that organs, tissue and blood should, as
bodily parts and fluids, be treated in similar ways when it comes to supply for
transplant and transfusion, their clinical and administrative management is
The committee recognises that there is a key difference between the
decision to donate organs and tissue as compared to donating blood. The
decision to donate blood is a personal one and can be taken individually and
acted on easily by the individual on a regular basis. Organ donation from a
deceased person, while a personal choice, requires the consent of family.
The two agencies reflect this difference: the OTA focuses on promoting
organ donation; providing education about donation; provides training to
medical professionals to assist them in discussing organ donation with patients
and their families.
Critically the OTA provides funding to facilitate retrieval of organs from
deceased donors. The NBA on the other hand focuses on contract management so as
to ensure blood supply and blood products from the Red Cross and other
Promotion and education about blood donation is outsourced.
These significantly different roles make it likely that few if any operational
efficiencies will result from any merger.
The committee is concerned that a merger between OTA and NBA would
result in a loss of the focus that a single agency can bring to promoting organ
donation. The proposed merger could reverse the positive trends in the rate of
organ donation in Australia which have been achieved by the OTA.
The committee understands that work is being undertaken in preparation
for the merger of the OTA and NBA, including the compatibility of ICT systems
and accounting systems. However the committee believes that it is not too late
for this work to be stopped and certainty provided to staff and stakeholders
that the two authorities will remain separate. The work done to date has shown
that the 'savings' from the merger would be minimal at best. The committee thus
questions the value of proceeding with the merger, given that it is a strong
possibility that the cost of the work to undertake the merger could be greater
than the savings achieved.
At its hearing in Moruya the committee heard the personal story of Mr
Brad Rossiter, a double amputee and organ donation recipient. Mr Rossiter is an
advocate for organ donation and tells his story in order to educate others
about what this gift of life can mean. Asked for his view of the merger of the
OTA and NBA, as someone who had received an organ donation and who remains
involved in the DonateLife promotion and advocacy, Mr Rossiter's answer was
I would like to think that DonateLife, the Organ and Tissue
Authority, remains a single entity, because the work they have done since
establishing it in 2009 has been strong. They have really built it up well. I
think they should continue to push on as they do and provide awareness, through
community efforts and also through hospital services, of increasing organ and
tissue donation—by themselves.
On the evidence the before the committee it is clear that a merger of
the OTA and the NBA would result in minimal, if any, "savings". The result
is far more likely to put at risk the positive work done so far by the OTA,
with the consequence that organ donation rates in Australia suffer.
The committee could find no evidence that thorough consideration or
consultation had been undertaken with organ and tissue donation sectors or with
the Red Cross on the impact of the merger of the OTA and NBA.
The committee concludes that the government’s ideological drive for
"smaller government" will unnecessarily jeopardise the work of an
agency dedicated to increasing organ donation rates and another whose work
ensures the safe supply of blood and blood products and services to the
The committee recommends that the government cease its planned merger of
the Organ and Tissue Authority and the National Blood Authority.
The committee could find no evidence that a thorough consideration of
the impacts of the merger within either agency or the broader public and health
sector had been undertaken. Further, based on evidence gained in hearings, any
efficiencies to be achieved are minimal and the risks to each agency continuing
to improve upon their achievements to date are high.
Senator Deborah O'Neill
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