If health reform was a baby, you’d have to say that it’s facing an exceedingly tough start to life. After managing (just) to survive a seemingly endless gestation and a fraught delivery, it is starting life with some daunting challenges ahead.

Rather than clutching their bundle with mutual joy, its parents in the Commonwealth and state bureaucracies are apparently regarding each other with mutual loathing and mistrust.

It’s not an auspicious look given that this poor baby’s future rests heavily on the ability of a host of different agencies and groups to work together in far more collaborative ways than in the past.

If the feds and the states aren’t able to put aside traditional rivalries and hostilities, how can they expect the Medicare Locals and Local Health Networks to do so?

The poor quality of relationships between federal and state health bureaucrats was one of many challenges to health reform implementation identified during a two-day workshop in Canberra this week.

The Australian Healthcare and Hospitals Association convened the health reform simulation, facilitated by former NHS executive Chris Spry, with the aim of identifying what needs to happen to give the reforms the best chance of a healthy start to life.

Many of the comments at the workshop suggested a sense that the reforms are getting bogged down in technical, governance and territorial disputes, and that their goal — a more integrated system based around populations, communities and patients — is fading from sight.

Another major barrier to implementation was a lack of clarity about reforms. It seems quite incredible at this late stage of the day that many of those close to the process have quite different understandings of the details.

Concerns were also raised that the level of funding promised by the Commonwealth for public hospitals — according to calculations by some workshop participants, the Commonwealth share is expected to increase from 38% in 2011/12 to 42% by 2020 — is unlikely to allow much scope for innovation and service development.

There were also concerns that if the Independent Hospital Pricing Authority’s role is confined to setting a price for a narrow range of services delivered only by hospitals, this may create the perverse incentive of encouraging hospital care for patients who could better be cared for in the community.

“At the moment, the funding model does not contain the incentives required to reduce the utilisation of hospitals,” one of the workshop groups concluded.

This group recommended that the Commonwealth agree to fund growth, not just in traditional hospital services, but in all health services delivered via Local Health Networks.

Prue Power, executive director of the AHHA, said: “The biggest lesson that emerged out of the simulation was the need to be serious about providing support to implement the reforms. If we don’t do that, the status quo will prevail.”

Workshop participants also said that Commonwealth health bureaucrats need to get a better understanding of the realities of health service delivery, and to develop better working relationships with states and territories.

Another major theme from discussions was the need for proper support for the new Medicare Locals and Local Health Networks, and to develop the capacity and skills of health service managers and clinical leaders to work effectively in the new environment.

If it takes a village to raise a baby, there was a strong sense that many in the village are currently not up to the challenge. This says much about the system and culture they work in.

As one hospital clinician commented, “Health administrators are into funding, targets and staying out of the newspapers, so very talented and creative people can’t work outside of that paradigm — they can’t be leaders, they’re managers.”

As this more detailed Croakey post illustrates, there are a multitude of challenges ahead for the vulnerable babe of health reform.

Peter Fray

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Peter Fray
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