National Health Reforms Press Ahead


Judith Kiejda, Assistant General Secretary, NSWNA

Judith Kiejda, Assistant General Secretary, NSWNA

A simplified version of former Prime Minister Kevin Rudd’s proposal to reform the health sector has been signed off by all Australian states.Last year then Prime Minister Kevin Rudd said his National health reform plan was bigger than medicare. Under the proposed agreement, the commonwealth Government would have become the dominant funder of public hospitals, providing 60% of the funding. In return states were to surrender 30% of their GST. However, not all States were happy with the deal and refused to get on board.

Now Julia Gillard has put forward a simpler agreement, which all States recently signed. The commonwealth Government will no longer provide 60% of funding. Instead it will increase its contribution of efficient growth funding for hospitals to 45% from 1 July 2014 and to 50% from 1 July 2017.

In addition, from 1 July 2017 the commonwealth will contribute half of every dollar required by states to meet increases in the efficient price of providing public hospital services and growth in service provision. an ‘efficient price’ means there will be a uniform national price for all hospital services and procedures. These payments will be set by an independent body called the Independent hospital Pricing authority (IHPA).

The latest agreement also confirmed the States’ role as system managers for public hospital services as well as their lead role in public health, while acknowledging the commonwealth’s lead role in delivering primary health care reform. The latter is likely to be achieved through the formation of medicare Locals, which will take responsibility for primary health care in local communities.

Overall, the association is happy with the new agreement. ‘Getting this signed off is a significant move,’ said NSWNA assistant General Secretary Judith Kiejda, although she stressed that nurses must be involved in issues around efficient patient care.

‘In this new landscape, it’s important to us that when the efficient price of care is calculated it incorporates the cost of safe staffing and quality nursing care. The IHPA is independent, which is good, but we have to make sure nurses are involved in that process. The IhPa must realise that loadings will be required for rural and remote hospitals,’ said Judith.

The amount of funding available to improve public hospitals remains the same as in the original agreement: $19.8 billion. another benefit of the new arrangements is the establishment of a national funding pool.

‘The establishment of national pooled funds is something the NSWNA and other professional organisations have advocated for some time,’ said Judith. ‘The commonwealth and State money goes into the fund and States have their own accounts within this fund. We see this as enhancing transparency and accountability as to where the money comes from and where it goes.’

The new agreement has met with mixed responses from health commentators, with the major criticism being that it focuses on hospitals rather than on integrated healthcare.

‘We await a vision from health ministers for medicare Locals, which must encompass core values of equity, effectiveness and efficiency. Only with that breadth of vision can we achieve better health in our communities, which in turn can reduce the use of hospitals,’ said Professor Helen Keleher from the Public health association of Australia in the online newsletter Crikey.


New financial arrangements for the Commonwealth and States to share equally the costs of growth in the Public Hospital System.

Confirmation of the States’ role as system managers for public hospital services including:
– System-wide public hospital service planning and performance,
– purchasing of public hospital services,
– planning, funding and delivering capital, and
– planning, funding (with the Commonwealth) and delivering teaching, research and training.

Confirmation of the states’ lead role in public health.

Acknowledgement of the Commonwealth’s lead role in delivering primary health care reform.

Affirmation of the Medicare principles, high-level service delivery principles and objectives, outcomes, outputs and measures agreed by COAG in 2008.

Establishment of a national funding pool to improve transparency and accountability.

The Commonwealth Government will increase its contribution to efficient growth funding for hospitals to 45% from 1 July 2014 and to 50% from 1 July 2017.

From 1 July 2017, the Commonwealth will contribute half of every dollar required by States to meet increases in the efficient price of providing public hospital services and growth in service provision.

Update on NSW Hospital Clinical Councils

NSW health has announced that a peer selection process for members of the NSW hospital clinical councils is expected to commence in march 2011 as part of the introduction of Local health Networks.

Around 150 hospital clinical councils already exist across the State. The introduction of a peer selection process to add clinical staff chosen by their peers to the membership of councils forms part of the transition to Local health Networks, and reflects the Government’s ongoing commitment to involving clinicians in local decision-making.

Clinicians interested in becoming members of the councils will be invited to self-nominate and the decision on the final council membership will be through a peer selection process.

Detailed information, including online and printed materials about eligibility to participate and the process, will be made available to relevant nursing, medical and allied health staff working across NSW health as the selection process is introduced.

It is expected that a dedicated email address will be also established to ensure all clinicians can ask questions and clarify issues and be kept up to date with arrangements in their Local health Network.

‘As part of national health reforms, NSW health recognises that increased clinical involvement in decision-making is vital to making the necessary and sustainable changes that will help keep NSW one of the best performing health systems in the world,’ said NSW health Director General, Professor Deb Picone.

‘The introduction of a peer selection process for Governing councils is a further step in this direction,’ Professor Picone said.

Staff nominated by their peers through the process will also form part of a shortlist for the minister’s consideration when selecting clinical members of the Local health Network governing councils. •