Sebastian Rosenberg, Director, ConNetica Consulting, and Senior Lecturer, Brain and Mind Research Institute at the Sydney Medical School, writes:

“The Federal Government’s willingness to address the issue of health care is laudable as is their recognition that fundamental reform is required.

However, the report launched today by Prime Minister Rudd raises several issues for me:

1.     There is no model of care described.  What is it exactly we want to see for our patients in the 21st century?  What does the evidence indicate is best practice and how do we go about arranging our services against this evidence?  In fact, the report really aims to shore up a hospital system well-suited to a 19th century model of hospital-centric care.  This is not reform.

2.     This paper is all about inputs (GST revenue etc) and outputs (activity funded).  It is about increasing the efficiency of the process of allocating costs and operating hospitals.  There is almost nothing about outcomes.  There is considerable commitment to standards, but the focus here is on waiting times etc.  The paper concentrates on managing hospital system expenditure going forward and this is important.  But the lack of discussion about outcomes (return to work, return to school etc) is disappointing.

3.     Does the paper deliver any more funding to the health system or just change who is paying? This is not clear.

4.     The process of monitoring and reporting is not yet clear but there is no commitment to ensuring this process is independent.  It could still be governments reporting on themselves.  What guarantee does the community have of independence and transparency?  The Safety and Quality Commission was established by governments, without statutory independence. Every state and territory is a member of the Commission, as is the Department of Health and Ageing through Jane Halton.

5.     Casemix costing is a black art.  There are real limitations around casemix technology as the basis for setting prices for services, even for inpatients where the technology is most robust. For outpatients it is worse.  Where price adjustments need to be made to reflect casemix or geography, how will this be done?  Will each new local network lobby their case to the independent umpire, as the states do now to the Grants Commission?  Or will lobbying be done by the states on behalf of all the networks in their jurisdiction?  How will the umpire understand the nuances of each network and set a fair price accordingly?

6.     The days of the general hospital are over.  Casemix funding has been demonstrated to encourage service specialisation and this will in turn have an impact on patient access.  The paper indicates that the states are set to retain control of patient transportation assistance schemes – this needs very careful monitoring as people’s access to care locally changes. Efficient pricing cannot be allowed to create disincentives for service providers to treat complex cases.

7.     According to the table on page 65, workforce planning is undertaken by the states, not by the networks or the Commonwealth.  Is this appropriate?

8.     The lines of communication between a new hospital network and primary care providers is unclear.  What will drive these two arms of health care to work together more effectively?  This will require more than both being paid by the same funder. Who will set the service standards and monitor the performance of the primary care system?

9.     There is nothing about mental health in this report.  The list of  ‘key’ NHHRC recommendations on page 24 of the paper does not mention any of the 12 mental health recommendations made by the Reform Commission.  Mental health is only mentioned three times in the whole document, and then only to indicate that it may or may not be in scope for transfer from the states to the Commonwealth (page 41).

10.  In other places, Italy, NZ, elsewhere, acute beds have become minor parts of a mental health system geared more towards care at home or in the community.  As stated earlier, this report aims to shore up a hospital system that people with mental illness (and other chronic illnesses) should not be required to use. There is still a need to shift the focus of care and funding towards early intervention/prevention of illness.