Accountability and performance benchmarks for the next Australian Health Care Agreements

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Beyond the blame game

Accountability and performance benchmarks for  

the next Australian Health Care Agreements  


A Report from the National Health and  

Hospitals Reform Commission  
April 2008   


Executive Summary  

The National Health and Hospitals Reform Commission (‘the Commission’) believes that to overcome ‘the blame game’ traditionally associated with the Australian Health Care Agreements (AHCAs) and to improve patient care, the next generation of AHCAs must be different. Going beyond ‘the blame game’ requires a new policy framework, with changes to the three key elements: scope, funding approach and accountability. Other policy processes occurring in parallel with the Commission indicate that this need is understood. This report focuses on the third element – accountability – in keeping with our terms of reference to advise now on robust performance benchmarks across a range of areas (see Appendix A). Benchmarks lack practical force unless someone (in practice, either the Commonwealth or the state* government) is accountable for performance against the benchmark.

We have assumed that the scope of the next generation AHCAs will be broader than hospitals. Our proposals on accountabilities also set a framework for a new funding approach, including incentive arrangements and financial consequences for performance against the benchmarks.
We have suggested an assignment of these accountabilities: states accountable for public hospitals, mental health, maternal and child health and public health, with the Commonwealth accountable for primary care (here we mean all other aspects of care in the community, primary medical care and community health care), prevention, aged care, and Indigenous health. We will be looking to feedback on this approach over the next months of consultation and further consideration in the lead up to our subsequent reports.
This assignment of responsibilities does not necessarily imply an immediate transfer of functions: states will continue to have an important role in service delivery in areas where we have suggested the Commonwealth exercise greater policy leadership with corresponding accountability.

As a first step in our work, we developed a set of principles or expectations of the health system (see Appendix B) to underpin our thinking about health reform and system design. We are currently seeking comment and input to these proposed principles as part of a broad consultation and engagement process. These principles should shape the design of the entire Australian health and aged care system - public and private, hospital and community-based – and be evident in how the system functions for patients and their carers, and should therefore be incorporated in the next set of AHCAs.

We have also identified twelve health and health care challenges where the need for improvement is well understood and extensively documented. These challenges have been used as an organising framework for improved accountability for the next AHCAs. We drew on the work of the Australian Institute of Health and Welfare to identify one or more performance indicators for each challenge and corresponding benchmarks, although some further work is required.
The proposed accountability framework comprises 44 benchmarks where performance against a target should have a clear and usually financial consequence. We were guided by several criteria in developing this set. The most significant of these criteria in terms of transforming the AHCAs are: the need to move towards a single level of accountability for the effective use of benchmarks; the importance of reciprocal accountabilities and benchmarks on all governments; and the need for benchmarks to be set at levels that encourage real improvement.


The National Health and Hospitals Reform Commission has been established by government to “develop a long-term health reform plan for a modern Australia”. The Commission’s Terms of Reference were released by the Council of Australian Governments and are provided in Appendix A, together with information on the membership of the Commission.

The Commission’s Terms of Reference identify that the first task is to provide advice “on the framework for the next Australian Health Care Agreements (AHCAs), including robust performance benchmarks in areas such as (but not restricted to) elective surgery, aged and transition care, and quality of health care”. The AHCAs are but one part of our health system, however their renegotiation is a critical opportunity for change. This, our first, report presents the Commission’s views and advice on key issues relevant to shaping the next generation of the AHCAs, recognising that our views will themselves be shaped over the next months of consultation and further consideration in the lead up to our subsequent reports.
Notwithstanding the focus of this report on the AHCAs, the health care system is about much more than the AHCAs. Our subsequent reports will address our task of fundamental redesign of our health system arrangements. The Commission embraces the need “to go boldly” in creating a vision for the health system of the future, a vision that is achievable and measurable with defined short, medium and long-term actions to drive real improvements in health outcomes and the health care experience of all Australians.
We welcome the input and advice of Australians from all walks of life over the next months in helping us to shape this vision. We are actively seeking to harness and build on excellent thinking, successful innovations and the views of health care leaders, front-line health professionals and the community on broad reforms of the health system, to inform our subsequent work and later reports.
In this report, we begin by presenting our views on the expectations Australians legitimately have of the health care system (see Section 2). We have developed a set of principles that we believe should shape reform and future directions of the whole health system, as well as being included and used as the basis for the next AHCAs.
In the light of the principles we developed, we then identify twelve major health and health care challenges (see Section 3). We were not constrained in this process by only addressing those challenges that might be remedied by revising the AHCAs. The AHCAs are but one instrument for driving the way the health system works, albeit an important one. What we needed to do was to step back and think about how the whole health system works and what needed to be changed to make it more person-centred and equitable, for example.
In Section 4, we outline our views on accountabilities and performance benchmarks for the health system. Our organising frame here was the list of challenges we had identified: that if the AHCAs are to result in an improved health system, we should be able to see that in terms of improved performance against the benchmarks we have identified.
Our starting premise is that clear accountabilities for delivering on improved performance of the health care system are one important mechanism to tackle the health “blame game”. We have identified a set of performance benchmarks (some existing and some yet to be developed) that can be used to track our progress in achieving changes that address the critical challenges facing our health and health care system. These performance benchmarks would expand the scope of the AHCAs beyond public hospitals to all health services and identify the shared responsibility of all governments to work in partnership to improve how the Australian health system works.

What do we want from  our health care system? 

The Australian health and aged care system has multiple functions. For most Australians, what they want from the system is that it will be there when they need it - from antenatal care and birthing through life to death. Australians expect when someone suffers an emergency, an ambulance will arrive quickly, they will be dealt with speedily on arrival at the hospital and they will get good care and rehabilitation if required. Australians also expect that when someone requires surgery for a condition that is not an emergency, they will be able to get access to a hospital in a timely way. Access to a broad range of primary health services (such as general practitioners, district nursing, allied health services and community mental health services) in the community is another vitally important underpinning and expectation of our health system. For people in poor health with chronic or debilitating conditions, the important expectation is that their condition will be managed effectively, with care provided as close to home as possible, so that they can have normal family, social and working lives. Another expectation is that when they or their loved ones can no longer manage at home, they are able to get support at home or, if necessary, can move into a supported environment. Similarly, when people are dying they expect to receive care and support that maintains their dignity and treats them with respect.
However, health is not “merely the absence of disease”: the health and aged care system has an important function in protecting and promoting health. This ranges from providing services to individuals and groups to broader, whole of population interventions. These health promotion and protection functions include support to people to stop smoking, through prompting by health promotion advertising or primary care encounters, access to groups to reinforce individual decisions, as well as changing behaviour about smoking in public places through legislation. Other examples include early detection services so that disease can be picked up and treated early (breast screening is one example) and organised prevention activities such as immunisation. At a whole of population level, these public health services also include ensuring a clean water supply and other environmental health initiatives. The health system as a whole is important to our identity as Australians: universal access to health care is an investment in the future productivity and longevity of our fellow citizens and helps to strengthen social solidarity.
The health care system exists in a dynamic environment. This means it has an important role in incorporating new learning and knowledge into current practice. To keep Australia at the cutting edge of health service delivery, the health system must absorb, implement and create new knowledge through clinical, public health and health services research, and evaluate and apply knowledge developed elsewhere through health services research. Leading scientists and clinicians also create new knowledge and technologies through research that must, when proven and appropriate, be incorporated into practice for the health benefit of Australians, while also contributing to our position in a growing global knowledge economy.

Another aspect of the dynamic nature of the health care system is that it needs to ensure that there is an adequate supply of health professionals for the future. The whole health care system has an important role in clinical training, education of undergraduate students and training and research opportunities for post-graduate students embarking on professional specialisations.

Finally the health care system employs about 7% of Australians and this employment role cannot be ignored. Recruiting to, and retaining within, the health system will be vital to capturing the talent and realising the investment made in training of all health professional groups. The health system also provides market opportunities for small, medium and large businesses to supply goods and services, thus contributing to our broader economy.

2.1 Proposed principles for the health care system

Australians and their governments generally share a number of aspirations about how the health care system ought to work in this country, although their precise formulation varies over time. The Commission has developed a set of principles to underpin the design of Australia’s future health system in two functional categories: service design principles (generally what we as citizens and potential patients want from the system) and governance principles (generally how the health system should work).
The Commission’s recommended service design principles are: people and family centred; equity; shared responsibility; strengthening prevention and wellness; value for money; providing for future generations; recognising broader environmental influences that shape our health; and comprehensive. Our governance principles are: taking the long term view; safety and quality; transparency and accountability; public voice; a respectful and ethical system; responsible spending on health, and a culture of reflective improvement and innovation.
The principles have been previously published on the Commission’s website ( and are described more fully in Appendix B.
These principles should shape the whole health system, public and private, hospital and community based services. These principles also form part of the framework that should be included in, and shape the negotiation of, the next AHCAs.

Twelve health 

and health care  challenges today 

For most people, the Australian health care system works well: the quality of the health workforce is good and care is available when you need it. But that is not the experience of all and some people find it difficult to access the care they need (for example, people with mental illness, people who are socially marginalised, and people living in rural, remote and outer metropolitan areas).

Taking the long-term view, we also know that there are significant changes impacting on the health of Australians, particularly the ageing of the population and the emergence of the ‘epidemic of chronic disease’. These are substantial challenges that already place pressure on the current organisation and funding of Australia’s health system.
Considering our task to advise on a framework for the next AHCAs, the Commission commenced its deliberations by addressing this question:
What changes and investments do we need to make to:

  1. Enhance health promotion and wellness and

  2. Make the health care system work better for those who need it?

From this we identified twelve critical challenges where the need for improvement is well understood and extensively documented. Of course, these are not the only challenges! We expect that as part of our consultation and engagement strategy to hear many views, both on what needs to change and, even more importantly, ideas and examples of and opportunities for innovative solutions to tackle these challenges.

An overarching issue for all these challenges is achieving better health and a better health care system in a financially sustainable manner. In addition to population ageing and the increasing burden of chronic disease, advancing medical technology and higher consumer expectations of what the health system should be able to deliver create real pressures on our health system. Financial sustainability is embedded in many of the principles that we have developed for future reform, including the need to emphasise prevention and to ensure value for money and responsible spending in how we organise and finance health services.
An important element of financial sustainability has to involve increasing community awareness about how much we spend on health services. With ever-growing demands on health services, there have been projections that state budgets could be totally devoted to health spending, with no spending on schools, roads or other important areas. This is clearly neither sustainable nor realistic. There needs to be better community awareness that health services, like water, are precious resources that we need to use wisely. Some of this will involve taking greater personal responsibility for our own health, while at a system level there needs to be a much stronger focus on prevention, an expanded role for community and primary health services, and a more balanced allocation of resources within the health system.
The twelve health and health care challenges highlighted are:

  1. Closing the gap in Indigenous health status

An Aboriginal or Torres Strait Islander child born today can expect to live 17 years fewer than a non-Indigenous child. At most ages, the Indigenous population has an age-standardised death rate at least twice the non-Indigenous population, with an Indigenous male aged 35 to 44 almost five times more likely to die than a non-Indigenous male of the same age. The chance of an Aboriginal or Torres Strait Islander male reaching the age of 65 is 25% and 35% for a female, compared to over 80% for other Australians. The same trends are reflected in differences in self-reported health status, recent illnesses, and long-term conditions. Although infant mortality rates per 1000 live births for Aboriginal populations are declining, they are still three times greater than for non-Aboriginal Australians. Birth weights for Aboriginal infants are considerably lower than for non-Aboriginal infants. Aboriginal people have much higher rates of infectious disease and other conditions reflecting poorer physical environments than non-Aboriginal people, and higher rates of substance abuse and many chronic conditions (the latter occurring at earlier ages than in non-Aboriginal people). The outcomes of care are also poorer for Indigenous Australians: non-Indigenous cancer patients survive longer than Indigenous patients and access to interventions such as cardiac catheterisation is lower for Indigenous people.
The causes of these differences are complex and go beyond the health care system. But the health care system has a lead role in working with other service delivery sectors and with Indigenous communities to improve the health of Indigenous Australians. There are proven interventions that work: improving maternal and child health, reducing the incidence and impact of chronic disease and culturally responsive drug and rehabilitation programs.

  1. Investing in prevention

Prevention has to be core to our health care system. We know that many chronic diseases are preventable and they share common risk factors. Action to improve life chances and choices will improve health status, reduce health inequalities and reduce people’s need for health care. People can reach retirement age in better health and delay health interventions further. This requires policy to give at least the same priority to long term gains as accorded the urgent and immediate. Of course, the health system and health professionals cannot be held wholly responsible for our health – it is a shared responsibility and individuals contribute to their own health through the choices they make. We also need to build partnerships across other sectors (including education, housing, transport, workplaces and local government).

  1. Ensuring a healthy start

People’s chances of a long, healthy life are affected even before they are born. The prenatal and early years of life are the foundations of health and development, significantly impacting on a person’s physical and mental health throughout their life. For example, babies with low birth weight have an increased lifetime risk of cardiovascular disease and diabetes; and young children subjected to child abuse or neglect face a lifetime of greater risk of mental health problems as well as physical illnesses (such as cardiovascular disease, obesity and diabetes). Investment in this life stage is paramount and provides exceptional value. Access to good health care, particularly primary health care, and community support services for pregnant women, children and parents can help ensure a healthy start to life, as well as provide early identification, diagnosis and appropriate intervention when problems emerge. However, as with many other parts of the health care system, fragmented responsibilities between Commonwealth and state governments and poor communication and sharing of information between hospital maternity care and primary and community care hinders effective provision of services. In many areas, there are also problems with timely access to intervention services to assist children with a disability or developmental delay.

  1. Redesigning care for those with chronic and
    complex conditions

People with chronic and complex conditions need access to comprehensive care from medical practitioners, nurses, allied health, social and community support, and often, aged care services. The multiplicity of programs, Commonwealth, state and local government, are complex to navigate and have tight eligibility rules that create program silos with gaps between them. As a result, the health system often fails when patients and their families need it most. The health system does not function effectively when responding to people with multiple health needs that may be provided in different settings and by different health professionals, and where there is a requirement for continuity over time. Care for people with rehabilitation and personal support needs is a particular gap. With many different programs and services with different rules and funded in different ways, there is little ability for service continuity, responsiveness in planning and implementing local models of integrated care, or use of new communication technologies that are focused on the needs of people in their local communities. There is an opportunity to implement and share successful working models where excellence in the care of people with chronic and complex conditions has been demonstrated, moving beyond trials to introduce best practice and knowledge more broadly.

  1. Recognising the health needs of the whole person

Medicare was designed in the 1960s, 40 years ago. It focussed on access to doctors and hospitals for once-off acute episodes. But health needs are broader than that; they relate to the physical, mental, emotional and social wellbeing of the individual. Patterns of illness have changed and new approaches to care and treatment have developed, involving a broader range of health professionals often working together in multidisciplinary teams to provide care across different settings that meet the ongoing health needs of individuals. Universal and affordable access to medical care must remain at the heart of Medicare, but the system needs to respond to these and other new developments in health care
Key gaps in access exist today, for example, support for mental health care and dental care. The needs of people with mental health conditions are often poorly met. Problems include variable investment in community-based mental health services (resulting in a reliance on acute hospitals which, in turn, are under great pressure) and MBS rebates that do not adequately address those with serious mental illness and those living in areas where mental health nurses, psychologists and social workers are scarce. In the case of dental care, there is clearly inequitable access, with some people relying on public dental programs of varying coverage. Mental health and oral health care needs should not be treated as separate to the needs of the whole person. Our programs and funding come in neat, well-defined categories, but people’s needs do not.
Mental health and oral health are just two examples of how Medicare does not focus on the total person. Another example includes the lack of support for allied health and counselling services to help people better manage risks (smoking cessation, dietary advice, support with exercise). Many Australians also use complementary medicine services as a form of self-management – these services are not evaluated and there are often no linkages with traditional medicine that can impact on the effectiveness of all care provided. Health funding focuses on the acute needs of people in hospitals, while changing health needs mean that many people need greater support while living in the community and for support in promoting good health. Hence, acute requirements such as hip replacements may be provided, but physiotherapy, dressings and walking aids or home modifications receive more limited support through our health system.

  1. Ensuring timely hospital access

Possibly the most visible challenge relates to long waiting times for elective surgery in public hospitals. There is continued growth in demand for public hospital care, which is expressed as both emergency demand (trauma, medical conditions such as heart attacks and stroke, and the needs of frail elderly people) and demand for elective surgery. In hospitals, as in other walks of life, the urgent takes priority and elective surgery is often squeezed out, so people wait longer than clinically desirable.

Long waiting times for elective surgery are a symptom of an underlying problem of capacity in public hospitals. The current internal organisation of hospitals, with multiple mini-queues as patients pass from one department to another, creates inefficiencies and waste. In the longer term, preventive strategies and a reformed chronic disease management system with improved management of care and information across the many interfaces of care will reduce demand on public hospitals and allow better access to elective surgery. As well, addressing elective access requires changing the way hospitals work (streaming elective from emergency care) and ensuring public hospitals have adequate capacity for the demands placed upon them. Addressing waiting lists requires action in all parts of the health system.

  1. Caring for and respecting the needs of people
    at the end of life

As the population ages, so the death rate grows. Over the last few decades, we have increasingly recognised the distinct needs of people at the end of life. Palliative care programs have emerged, often focussed on people with cancer or HIV/AIDS. Hospitals are getting better at listening to people regarding their decisions about care at the end of their lives, although the lack of clarity around advanced care directives remains an issue. Yet still, often interventions are made that deny a person’s right to die with dignity, and currently we provide only limited options for support for those dying at home. This is an area where the principle of people and family centred care is particularly important, including through providing care at or closer to home for people who want this option, and a preference for less institutional settings with the option to go to more formal care if there are difficulties coping at home.

  1. Promoting improved safety and quality of health care

Despite the best efforts of well-intentioned health professionals and implementation of sound policies and protocols, things go wrong in health care settings both in and out of hospital. Between 15-20% of hospital overnight episodes have an adverse event. Adverse drug events, medication management errors and falls are a significant problem across the health continuum and are particularly relevant to older patients with complex health problems on multiple medications. These examples highlight the need and opportunity for improvements in the safety and quality of health care. Adverse events and mistakes could cost the health system $2 billion per annum. Improvements need to tackle systemic, communication and information management issues including better patient identification, handover and decision support.

  1. Improving distribution and equitable access to services

We have identified above a number of weaknesses of the health system that apply to city and country alike. But Australia’s geography creates other challenges: ensuring an appropriate mix of health and aged care services in regional, rural and remote locations, the workforce to staff them, the support for remote staff, and programs to assist people who need to travel for care. Access for these communities is facilitated with good retrieval services, support with accommodation close to treating facilities and help with transport for visiting family members.
Location can also be an issue within metropolitan areas with the workforce unevenly distributed and with significantly better access to health care in wealthier than poorer areas, while health needs are distributed the other way (the so called ‘inverse care law’). For Indigenous Australians, these location issues amplify their disadvantage in terms of access to care and health.

  1. Ensuring access on the basis of need, not ability to pay

The three universal programs (Medical Benefits Scheme, the Pharmaceutical Benefits Scheme and access to public hospitals) provide a critical equitable underpinning for health care in Australia. Families are further protected against out of pocket costs by the Pharmaceutical Benefits Scheme and Medicare safety nets. But there are still financial barriers to access, with many people facing sizable co-payments and limited government support for some key elements of the service system including allied health and community nursing services, dental care, and aids and equipment.

  1. Improving and connecting information to support
    high quality care

The way health knowledge and information are created, stored, shared and accessed across health services significantly impacts not just on the efficiency of the health system, but also on the quality and safety of patient care. ‘Connected health’ allows health knowledge and patient information to move with the patient across the different parts of the health care system, improving patient care, helping people navigate their way through the system, supporting doctors in their decision-making, and improving productivity and efficiency.
To achieve this, information about a person’s health and how to optimise it needs to be readily available from reputable and respected sources in multiple and accessible formats, while appropriately managing privacy, security and confidentiality.
Currently, health information networks have been built by different public and private providers and are usually based on inconsistent and incompatible designs, which do not allow for interconnectivity. It is imperative to implement a robust and standards-compliant information management system that enables individuals to authorise access to their vital health details across all health care environments including hospitals, GPs and other health professionals, where they choose to do so, in an agreed privacy regime.

  1. Ensuring enough, well-trained health professionals and promoting research

Responsibility for the education and training of the health workforce is shared between the Commonwealth (which has responsibility for universities) and states, medical specialty colleges and other professional bodies, in hospitals and community settings. There are critical shortages of many health professionals, often exacerbated by skewed distribution of services and providers, poor morale and retention and rigid adherence to narrow professional roles. Recent initiatives to redress some of these problems involving general practice nurses, remote area nurses, specialist nurse practitioners and allied health professionals within multi-disciplinary care teams are still in their early stages of roll out.
Research, education and training are sometimes seen as an afterthought by health services which are focused on service delivery. Clinicians who have clinics and operating lists cancelled at short notice are denied their responsibility to teach. Trainees are expected to provide service while the commitment to their own training and that of students can be ignored in the interest of service provision. Trainees still work unhealthy hours, adversely affecting their ability to learn. Access to training opportunities, especially surgical, is also impacted in those specialties where a majority of work is undertaken in the private system (particularly orthopaedics, ear, nose and throat surgery and ophthalmology) and also in general practice due to time and workforce constraints. Schools of nursing and allied health professions are constrained in their ability to expand to meet workforce needs because of the difficulty of finding appropriate clinical placements. When placements are found, they may be withdrawn at short notice because of changed service needs.
Inadequate access to protected time for research, teaching and training and the supervisors to provide this, is short-sighted and must be remedied. Linking innovative clinical research to new models of service delivery has to be a crucial element of a vibrant and evolving Australian health care system. This is a key role for all health professional disciplines and is at the heart of a learning and improvement culture.
Training institutions such as universities are limited in their ability to offer comprehensive and adequate training for students because of difficulty in obtaining sufficient suitable clinical placements. Primary care also suffers from a lack of teaching infrastructure, yet is expected to be the new teaching domain.

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