Commonwealth-State cooperation is essential for healthcare reform

Feb 7, 2023
Doctors in blue hospital uniform with stethoscope.

The recommendations of the Strengthening Medicare Taskforce released last week, like almost any serious health reform in Australia, require joint Commonwealth and state action.

Unfortunately, going into last Friday’s National Cabinet meeting state responses were at the juvenile end of the spectrum – the Commonwealth should give them and doctors more money – with no serious commitment to work together for reform. The noises coming out of the meeting were much better, with actions and negotiations scheduled over the next couple of months in the lead up to the federal budget in May.

However, the track record of Commonwealth-state processes over the last decade is that they have been long on gobbledygook and short on anything that has demonstrable benefit for patients or taxpayers. It is as if the point of all the negotiations was to get a signed agreement, without caring whether any reform was actually achieved.

This has to change. Health Minister Butler has said that Medicare is in its worst shape in 40 years, so at least he is up for action. But primary care is not the only area where reform discussions are under way. There are critical shortages of health professionals in many areas, and public hospitals are under stress. Joint Commonwealth-state action is required in all three domains.

1. Primary care reform

A centrepiece of the Strengthening Medicare Taskforce report was an emphasis on integrated, multidisciplinary teams. For these to work, the Commonwealth must get the funding incentives right. But that is not enough. The states control many of the regulatory levers about who, other than medical practitioners, can prescribe which medications. Prescribing rights for pharmacists, nurses, and nurse practitioners are regulated by states through scheduling of drugs. At present each state is going its own merry way on this, leaving the Commonwealth playing catch up. However, the Commonwealth pays for the Pharmaceutical Benefits Scheme and so state and Commonwealth decisions must be harmonised.

2. Workforce planning

University and vocational education places are paid in part by the Commonwealth, and in part by students themselves, facilitated by deferral of fees through income-contingent loans. Especially in the health professions, a rate limiting factor for the number of new health professionals is the number of clinical placements in health and community facilities. These are currently partially subsidised by the Commonwealth, but state governments, especially through public hospitals, provide majority funding here.

Rational health workforce planning was set back by the decision in the 2014 Abbott budget, – with Peter Dutton as Health Minister – to abolish the national workforce planning agency, Health Workforce Australia. Planning the right mix of health professionals, and implementing the plans, again requires joint Commonwealth-state action. Action here is urgent given the long lead times involved in the education and training of health professionals.

3. Hospital reform

High on the agenda for any health system reform is always getting hospital policy right. Public hospitals are under immense pressure, partly because of the continuing ravages of Covid and the incidence of new infections, partly because of deferred care and long Covid, and partly because there were problems in many states pre-Covid.

The states have suggested the answer is just give them more money, specifically for the Commonwealth to increase its share of public hospital funding from 45% to 50%. Unfortunately, there has yet been no commitment from the states about what the Australian taxpayer and patients get in return for billions of extra spend. Nothing about what will happen to either elective procedure or emergency wait times. Nor is there any commitment to address inefficiency in hospital care. Here again joint Commonwealth-state commitment for reform is needed.

The vibes from last week’s national cabinet appears to be that the Commonwealth and states recognised that they have to work together on reform. One hopes that they also accept a sense of urgency for this task. One also hopes that by ‘reform’, we don’t mean yet another policy document produced from the random policy word generator stored in a basement in Woden, but rather what is produced is a document, written in plain English with verbs (‘doing words’), targets, and timelines, and funding to effect change.

In the long-term health, Commonwealth-state reform might require use of new structures, especially joint action at the regional level through Primary Health Networks and local health districts. But whatever the structures, we need to move away from high-level vague commitments, which satisfy no one outside those in the cosy process and which do not lead to any real change, only satisfying the requirement for a photo opportunity with signatures on a piece of paper.

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