House of Representatives Committees


Membership of the Committee
Terms of reference
List of abbreviations
List of recommendations

Chapter 1 Introduction
Chapter 2 Overview
Chapter 3 A national health agenda
Chapter 4 Funding a sustainable health workforce
Chapter 5 Rural and regional health services
Chapter 6 Local government
Chapter 7 Public hospital services
Chapter 8 Private health
Chapter 9 Improving accountability
Appendix A – List of Submissions
Appendix B – List of Exhibits
Appendix C – List of Public Hearings and Site Inspections


A common complaint to Members of Parliament is that, when people are unhappy about their health care, both the Commonwealth and the states blame each other for the failings of the health system. While the associated political grandstanding often makes for some good headlines, the blame game does not benefit patients. Patients don’t care which level of government manages or pays for their health care — they want reliable access to quality care.

The blame game is a feature of the health system in Australia. The committee considers that an Australian Government led ‘national health agenda’ is an important part of addressing the blame game.

Addressing the blame game will involve a national approach to developing and funding health care. This will require leadership from the Australian Government, cooperation by the states and a joint commitment to end the blame game. The complexity of health delivery and financing, the rate of development of new health technologies and rising community expectations mean that ongoing reform is needed.

While there is scope for improving the quality and access to health care in Australia, it is important to bear in mind that the health system delivers good outcomes compared to similar overseas countries.

There is no questioning the commitment and dedication of the health workforce in providing high quality health care. Despite the constraints that financing arrangements can impose, most of the time health professionals are able to ensure that patients receive the care they need, when they need it. However, access to health care, particularly in regional, rural and remote areas requires sufficient skilled health workers training and working in major cities and in regional areas.

I welcome the Australian Government’s recent commitment to address the under investment in training places for medical and other health professionals over the past 15 to 20 years. However, attention now needs to be given to ensuring that there are sufficient clinical training opportunities in both the public and private sectors for rising numbers of health trainees.

The committee received considerable evidence about Australian Health Care Agreement funding for public hospitals. These agreements expire on 30 June 2008 and governments are considering options for reform. The committee supports some divergence from the current funding model to remove barriers to health reform and more closely link funding with national policy standards and accountability for quality health care. Public hospital funding arrangements should also give closer attention to the health care needs of people living in regional and rural areas.

One key objective of the inquiry was to allow for a transparent engagement with organisations and individuals outside government about their ideas on health funding. The inquiry overlapped with a review by the Council of Australian Governments (COAG), which by its nature, does not provide opportunities for wide consultation with health professionals or the community. The committee is pleased that many of these concerns have been addressed.

The committee received 159 submissions, held 18 public hearings, made 9 site inspections and received approximately 28 private briefings. I would like to thank those who put so much time and effort into their submissions and travelled long distances to appear at public hearings and assist the committee.

It was particularly pleasing to receive submissions and hear evidence from the governments of the ACT, Victoria, Northern Territory, Western Australia and South Australia. Unfortunately, other state governments, some of whom voiced opinions in the media, did not choose to make a direct contribution to the inquiry.

During the course of the inquiry, there were significant problems in the Queensland health system, including allegations of misconduct by ‘Dr Death’ in Bundaberg Hospital. It is clear that there needs to be significant reform within Queensland Health to ensure that there is no repeat of the horrors allegedly allowed to be practised by Dr Patel. The Queensland Minister for Health did not take up my offer to conduct a swift and open inquiry into further claims of misconduct in August 2006 at Mackay Base Hospital.

Finally, I would like especially to thank the Deputy Chair, Jill Hall MP, and all the members of the committee, including the early involvement of Malcolm Turnbull MP. The committee’s enthusiasm for developing health reforms was shown by the hard work and determination to hear evidence and make site inspections around Australia. The committee secretariat work was diligent and sustained, and the committee thanks all those staff involved.


Hon Alex Somlyay MP


Membership of the Committee


Hon Alex Somlyay MP

Deputy Chair

Ms Jill Hall MP


Hon Alan Cadman MP


Mrs Justine Elliot MP


Mrs Kay Elson MP


Hon Warren Entsch MP (from 9/2/06 )


Mr Steve Georganas MP


Mr Michael Johnson MP


Ms Catherine King MP


Mr Malcolm Turnbull MP (until 9/2/06 )


Mr Ross Vasta MP

Committee Secretariat


Mr James Catchpole

Inquiry Secretary

Mr Kai Swoboda (from 03/06)

Ms Sonya Fladun (until 03/06)

Ms Julia Searle (until 12/05)

Senior Research Officer

Ms Margaret Atkin

Research Officer

Ms Trish Tyson (until 11/05)


Mr Ian Bigg (09/06 to 11/06) Department of Health and Ageing

Administrative Officer

Ms Lauren Walker

Terms of Reference

The House of Representatives Standing Committee on Health and Ageing has reviewed the 2003-2004 annual reports of the Department of Health and Ageing and the Private Health Insurance Administration Council and resolved to conduct an inquiry.

The Committee shall inquire into and report on how the Commonwealth government can take a leading role in improving the efficient and effective delivery of highest-quality health care to all Australians.

The Committee shall have reference to the unique characteristics of the Australian health system, particularly its strong mix of public and private funding and service delivery.

The Committee shall give particular consideration to:

List of abbreviations


Australian Council on Health Care Standards


Australian Council for Safety and Quality in Health Care


Australian Health Care Agreement


Australian Health Ministers’ Conference


Australian Institute of Health and Welfare


Australian Medical Association


Council of Australian Governments


Chronic Obstructive Pulmonary Disease


Financial Assistance Grants


Fringe Benefits Tax


Gross Domestic Product


General Practitioners


Goods and Services Tax


Home and Community Care


Hospital Purchaser Provider Agreement


Institute of Medical and Veterinary Science


Medicare Benefits Consultative Committee


Medicare Benefits Schedule


Memorandum of Understanding


Multi‑Purpose Services


Multiple Sclerosis


Medical Savings Accounts


Medical Services Advisory Committee


Organisation for Economic Co-operation and Development


Pharmaceutical Benefits Scheme


Patient Episode Initiation


Private Health Insurance Administration Council


Private Health Insurance


Public Health Outcome Funding Agreement


Repatriation Pharmaceutical Benefits Scheme


Strategic Planning Group for Private Psychiatric Services


Specific Purpose Payments


Visiting Medical Officer

List of recommendations

3 . A national health agenda

Recommendation 1

The Australian, state and territory governments develop and adopt a national health agenda. The national agenda should identify policy and funding principles and initiatives to:

Recommendation 2

As a matter of priority, the Department of Health and Ageing undertake the actions specified in the July 2006 Council of Australian Governments’ response to the Productivity Commission’s health workforce inquiry to:

Recommendation 3

The Australian Government should supplement state and territory funding for public dental services so that reasonable access standards for appropriate services are maintained, particularly for disadvantaged groups. This should be linked to the achievement of specific service outcomes. (para 3.119)

4 . Funding a sustainable health workforce

Recommendation 4

The Department of Health and Ageing take a lead role to better coordinate the existing jurisdiction-based recruitment of overseas trained health professionals by the Commonwealth and state and territory governments.(para 4.53)

Recommendation 5

The Australian Government implement a strategy for Australia to:

Recommendation 6

The Minister for Science, Education and Training ensure that agreements about health workforce allocation and funding between the Department of Education, Science and Training and universities allow for supplementary funding by the Department of Health and Ageing to:

Recommendation 7

The Australian Government develop explicit purchasing agreements for clinical training with public health care providers. The purchasing agreement would cover:

Recommendation 8

The Australian Government take advantage of expanding opportunities for private sector health providers to conduct clinical training and, where appropriate, enter into purchasing arrangements to fund this training. (para 4.94)

Recommendation 9

The Australian Government ensure that the new national health professions’ accreditation body’s decisions about changes in models of care arising from task substitution are also reflected in funding arrangements. (para 4.108)

Recommendation 10

The Australian Government amend the Fringe Benefits Tax Assessment Act 1986 so that:

5 . Rural and regional health services

Recommendation 11

The Minister for Health and Ageing, in consultation with state and territory health ministers and as part of the national health agenda (see recommendation no. 1), develop standards for the delivery of health services in regional, rural and remote areas. (para 5.41)

6 . Local government

Recommendation 12

The Minister for Local Government, Territories and Roads give priority to the development of processes and guidelines to assist Australian Government agencies implement the principles of the Inter-Governmental Agreement on Local Government, as announced by the Australian Government on 6 September 2006. (para 6.34)

7 . Public hospital services

Recommendation 13

In negotiating future Australian Health Care Agreements, or substitute arrangements, the Australian Government either:

Recommendation 14

In negotiating future Australian Health Care Agreements, or substitute arrangements, the Australian Government ensure that indexation arrangements reflect actual cost increases discounted by an appropriate efficiency dividend. (para 7.34)

Recommendation 15

In negotiating future Australian Health Care Agreements, or substitute arrangements, the Australian Government should define the standards that states must meet to satisfy the principle of equitable access to public hospital services, particularly in relation to people living in rural and regional areas. (para 7.43)

Recommendation 16

In negotiating future Australian Health Care Agreements, or substitute arrangements, the Australian Government consider dividing funds into separate streams through which it can:

should be linked to outcomes and performance standards; and

should not be absorbed into the GST pool. (para 7.49)

Recommendation 17

The Australian Government should make specific purpose payments to the states and territories for the provision of public hospital services subject to horizontal fiscal equalisation using the Commonwealth Grants Commission’s ‘inclusion’ method rather than by being absorbed into the Goods and Services Tax (GST) pool. This would require amendments to the A New Tax System (Commonwealth –State Financial Arrangements) Act 1999. (para 7.53)

Recommendation 18

The Australian Government should ensure that the terms and conditions associated with future public hospital arrangements do not lock-in historical Commonwealth-state service provision models. Future arrangements should:

Recommendation 19

The Australian Government consider extension of Medicare Benefits Schedule funding, or substitute grant funding, to public outpatient and emergency department services. (para 7.65)

8 . Private health

Recommendation 20

The Australian Government introduce an outcomes‑based assessment process that:

Recommendation 21

The Australian Government amend private health insurance legislation to require that a single coordinating doctor be required to obtain informed financial consent from a patient in relation to all treating health professionals in all but the most exceptional circumstances (such as emergencies). The patient should consent in advance to the cost of the full range of services provided by all health professionals involved in the patient’s care. (para 8.68)

Recommendation 22

The Australian Government, in conjunction with the Australian Medical Association, establish guidelines for private hospitals and health funds that discourage medical professionals and private hospitals providing specific advice to their patients about transfer private health insurance funds and/or products. (para 8.79)

Recommendation 23

The Department of Health and Ageing undertake further research to examine how medical savings accounts could be introduced within the Australian health financing system as a health savings and insurance vehicle. (para 8.98)

9 . Improving accountability

Recommendation 24

The Australian Government, in conjunction with the states and territories, give priority to undertaking research to develop mechanisms to make waiting lists for public hospital elective surgery fairer. (para 9.15)

Recommendation 25

In negotiating future Australian Health Care Agreements, or substitute arrangements, the Australian Government provide incentives for the states and territories to report in a consistent manner on patient waiting times for access to specialists in outpatient clinics. (para 9.20)

Recommendation 26

In negotiating future Australian Health Care Agreements, or substitute arrangements, the Australian Government require all public hospitals to:

Recommendation 27

The Australian Government prohibit the payment of private health insurance benefits for hospital services unless the relevant hospital:

Recommendation 28

The Australian Government require all state and territory governments to regularly publish reports on sentinel events occurring in their public hospitals. (para 9.47)

Recommendation 29

The Australian Government support the development of hospital and clinician‑based performance information systems to better inform patients about the competence of health care providers and strengthen accountability of health professionals and health service providers. Reporting systems should allow, where appropriate, for performance information to be qualified to reflect differences in the type of patients being treated. (para 9.54)

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