1. 1 A National Health and Hospitals Network for Australia’s Future Consumer Information Sessions - April 2010 The Hon Mark Butler MP Parliamentary Secretary for Health

2. 2 1.Context for Health Reform 2. National Health and Hospitals Network - Proposed Reforms 3.Next Steps Contents

3. 3 1. Context for Health Reform

4. 4 Challenges in the Australian Health System Fragmentation caused by overlapping responsibilities between different levels of government results in duplication, cost-shifting and blame-shifting. Too many patients are either falling through the gaps or receiving uncoordinated care. Not all Australians get the services they need. People living in rural and regional areas, for example, sometimes struggle to access primary health care. Our public hospital system is struggling to cope with growing patient demand and stretched budgets. Too much blame and fragmentation between governments Gaps and poor coordination in health services that people need Too much pressure on public hospitals and health professionals Too much inefficiency and waste An unsustainable funding model Not enough local clinical engagement The cost of providing health care is expected to continue to increase. But state government revenue growth is not keeping pace with growing health care costs. Waste and inefficiency are ongoing challenges. The Productivity Commission estimates that some public hospitals may be running up to 20 per cent less efficiently than best practice. Many clinicians and citizens are not adequately involved in decisions about the delivery of health services in their local community.

5. 5 National Health and Hospitals Reform Commission The Government established the National Health and Hospitals Reform Commission (NHHRC) in 2008. Chaired by Dr Christine Bennett, the NHHRC was asked to provide evidence base directions for immediate and longer-term reforms of Australia’s health system. The NHHRC’s final report was released in July 2009. It included 123 recommendations. The NHHRC emphasised the need to focus reforms on three main goals: 1.Tackling major access and equity issues that affect health outcomes for people now; 2.Redesigning our health system so that it is better positioned to respond to emerging challenges; and 3. Creating an agile and self-improving health system for long-term sustainability.

6. 6 Significant National Consultation on the NHHRC report recommendations – 103 consultations held across Australia

7. 7 2. A National Health and Hospitals Network - Proposed Reforms

8. 8 Public Hospitals – Changes in funding responsibility The Commonwealth will pay 60% of hospital services The Commonwealth Government will become the major funder of the hospital system. The Commonwealth will fund: 60 per cent of the efficient price of every public hospital service provided to public patients; 60 per cent of recurrent expenditure on research and training functions undertaken in public hospitals; 60 per cent of capital expenditure, both operating capital and planned new capital investment, to maintain and improve public hospital infrastructure; and over time, up to 100 per cent of the efficient price of ‘primary health care equivalent’ outpatient services provided to public hospital patients.

9. 9 Public Hospitals – Activity Based Funding The Commonwealth will pay on an activity basis 1.The Commonwealth will move to a nationally consistent patient level costing and pricing regime for public hospitals over time. 2.The Activity Based Funding work program agreed with states and territories at COAG in November 2008 will be accelerated. From 1 July 2012, the Commonwealth will progressively shift to activity based funding for admitted patient services, paid directly to Local Hospital Networks. From 1 July 2013, the Commonwealth will progressively implement activity based funding for emergency department and outpatient services. 3.The ABF price will take into account a series of loadings that adjust the price for patient and hospital factors (such as rurality and Indigeneity), and a series of cost weights that reflect the cost differences between different diagnoses and procedures. The exact formula and price will be determined by an independent umpire. 4.Payments under this model would not be capped – the Commonwealth will fund all services that local networks choose to deliver (in consultation with states and territories).

10. 10 Public Hospitals - Local Hospital Networks The Commonwealth will require states to implement Local Hospital Networks The Commonwealth will require states to create separate state statutory authorities to receive payment from the Commonwealth. Each Local Hospital Network will consist of small groups of public hospitals : with a geographic or functional connection, large enough to operate efficiently; containing at least one large metropolitan or major regional public hospital; and able to provide a reasonable range of hospital services. States can determine the regional, rural and remote network structure that best meets the needs of their communities. Local Hospital Networks will be responsible for making operational decisions including planning at the network level.

11. 11 Implementation of Public Hospital Reforms Implementation of Activity Based Funding and transition to funding 60% Over 2010–11, the Commonwealth will work with the states to determine the current and future costs of delivering public hospital services to calibrate the financial transfers required. From 1 July 2011, the Commonwealth will increase its funding contribution to 60 per cent of recurrent expenditure on public hospital services, research and training, and planned new capital expenditure. These payments will be made to the states. From 1 July 2012, the Commonwealth will progressively shift this funding to activity based funding for admitted patient services paid directly to Local Hospital Networks, and progressing to emergency department and outpatient services. Local Hospital Networks Local Hospital Networks would be required to be operational by 1 July 2012.

12. 12 GP and Primary Health Care Takeover of 100% of General Practice and primary health care services The Commonwealth will take over funding and policy responsibility for all General Practice and primary health care (PHC) services. In 2010-11 conduct a stocktake of PHC services. This will identify and cost the services to be directly funded by the Commonwealth. From 2011–12, the Commonwealth will commence funding all primary health care programs currently funded and provided by the states. Introduce Primary Health Care Organisations (PHCO) to facilitate integration of care. PHCO to have overlapping membership with LHN Governing Councils Some states have developed successful models of care, and the Commonwealth will build on these models and share them more quickly around the country, so Australians in all states can benefit from successful innovations.

13. 13 Reform element: Hospitals $m National Access Targets for Emergency Departments Support for 805,0000 emergency department attendances in 2013-14 500 Capital Investment for Emergency Departments The equivalent of 10 new emergency departments or walk in centres nationwide 250 National Access Guarantees for Elective Surgery in Public Hospitals To support 22,000 additional elective surgery procedures in 2013-14 650 Additional Sub-acute Beds 1,316 new sub-acute care beds by 2013-14 1,623 Flexible funding pool across ED, ES and sub-acute Support for the equivalent of either: 325,000 emergency departmental attendances per annum or 13,7000 additional elective surgery procedures per annum or 300 additional sub-acute beds 200 Capital Investment for Elective Surgery The equivalent of 15 new operating theatres or seven day surgery centres nationally 150

14. 14 Reform element: Primary health care $m Voluntary Enrolment and Chronic Disease Services for Patients with Diabetes Flexible delivery of primary health care services through general practice for treatment and ongoing management of people with diabetes who voluntarily enroll with their general practice. 260,000 diabetes patients enrolled by 2013-14. 436

15. 15 Reform element: Aged Care $m Enhanced Access to Primary Care for Older Australians Upto 295,000 additional GP services being provided to older Australians in the four years to 2013 – 14 96 Enhancement of the Aged Care Complaints Investigation Scheme Strengthening the Aged Care Complaints Scheme to protect the most frail and vulnerable people in our society from poor quality care or abuse 3 Enhanced Regulation of Aged Care Accomm Bonds – Prudential regulation Greater assurance to aged care residents and their families that their accommodation bonds are used to improve aged care infrastructure and that they are secure 22 Capital Investment in Multi-purpose services On any given day 586 older Australians will be cared for in a more appropriate aged care facility 120 Increased funding for viability supplement – Community Care Support for more than 400 rural & remote community care providing 6,300 places 10 Reform of roles and responsibilities – HACC Transition of the admin of HACC services for older people to the Commonwealth (except Vic and WA) 34 Development of access points and enhancement to assessment Nationally consistent screening and assessments to direct people to the most appropriate care 32 Better support for Long Stat Older patients Support to assist 2,000 long stay older patients per annum 280 (in forward estimates)

16. 16 Reform element: Mental health $m Expansion of Youth Friendly Mental Health Services Expansion of the current 30 headspace services and an additional 30 youth friendly mental health services, providing services for an additional 20,000 young people per annum 78 Early Psychosis Prevention and Intervention Centres Providing improved detection and earlier treatments for up to 3,500 young people 25 Mental Health Nurses initiative Supporting up to 136 additional mental health nurses to provide an estimated 11,700 extra services. 13 Care packages for patients with severe mental illnesses Providing flexible care packages for up to 25,000 people with severe mental illness 57

17. 17 Reform element: Workforce $m More General Practice Training Places. 1,375 more general practitioners practicing or in training by 2013 and. 5,500 new GPs or GPs undergoing training over the next decade. 339 Additional Postgraduate Clinical Training Places. 975 places each year for junior doctors to experience a career in general practice during their postgraduate training period 148 Enhance and Expand the Specialist Training Program. 680 more specialist doctors in the next decade 145 Allied Health Workers Locum Scheme. Support for 1,000 allied health professionals over the next decade to take leave 5 Allied Health Workforce - Clinical Placements Scholarships. 1000 extra clinical training scholarships over the next decade 6

18. 18 Budget announcements The 2010–11 Budget delivers a further $2.2 billion package of investments in the National Health and Hospitals Network over four years. This includes: $772 million to improve access to General Practitioners (GPs) and primary health care  $417 million to improve after–hours access to GP and primary care services and establish Medicare Locals – ensuring every Australian and their family has the access and advice they need locally, when they need it.  $355 million to deliver 23 new GP Super Clinics across the nation and upgrade around 425 GP and primary health care clinics. $523 million in training and supporting Australia's nurses  $390 million to better support practice nurses in GP clinics.  $60 million in training and education incentive payments to assist nurses and personal care workers in aged care.  $69 million to establish the first ever rural locum scheme for nurses, build nursing careers and support nurse practitioners in aged care.

19. 19 Budget announcements $467 million to modernise our health and hospital system  $467 million to introduce personally controlled electronic health records for every Australian who wants one from 2012–13 — improving patient safety and health care delivery and slashing cost duplication. $400 million to drive efficiency and high performance  For the first time, setting a nationally efficient price for public hospital services — and ending disputes about hospital funding.  Setting national quality and safety standards and ensuring transparent reporting on performance.

20. 20 Health system benefits of the proposed reforms Benefits 1.Productivity enhancements and reduced waste. 2.Independent and transparent performance information at the hospital and state levels. 3.Greater transparency on Commonwealth primary health care performance. 4.Clarification of health responsibilities between governments. 5.Clarify that the Commonwealth is accountable for reducing hospital demand and supporting better care in the community. 6.Freeing up state budgets and easing of long term fiscal pressure on state budgets beyond the forward estimates ($5 billion in 2019-20). Estimated benefits to states: 2010-11 to 2019-20