Why the Department of Health has proven tragically inept

Jan 29, 2022
Covid ambulance
Australia's health and economic outcomes could have been much better. (Image: AAP/Bianca De Marchi)

The Health Department’s Covid response was filled with missteps due to its indifferent minister, structural deficiencies and reliance on consultants.

In 2011 the Public Service Commission began a series of reviews “to assess capability in key agencies and identify opportunities to raise the institutional capability of the Australian Public Service”. The review of the Department of Health was undertaken in 2013 in the period after long-serving secretary Jane Halton left the department and before Martin Bowles took up the post.

In an article on this site in 2015, John Menadue highlighted the review’s principal findings:

    • The department is “hierarchical and siloed”.

The department “does not have a high-level strategic policy framework to support the development of coherent policies and programs”.

The department needs to “better connect sources of evidence across the organisation to support the development of a high-level whole-of-health system view to inform and guide the department’s advice … Policy discussions are largely constrained within work silos.”

There is “a sense of reluctance from the department to consider new or changed policy direction … It seems likely that the department’s lack of high-level strategic policy direction is hampering policy and program agility.”

The review’s conclusion in relation to “outcome-focused strategy” was that it was an area of “serious concern”, meaning there were “significant weaknesses in capability for current and future delivery that require urgent action”. In short, the department did not have the capability to provide strategic policy advice about the health system.

While responsibility for the government’s inept handling of the COVID-19 pandemic does not rest solely with the department, it is hard to argue that its weak policy capability has not been important.

The department’s initial response to the findings of the capability review was encouraging. On becoming secretary in late 2013, Bowles embarked upon an ambitious program of structural change. To address the capability gap in policy thinking, in early 2014 he established a strategic policy committee, chaired by a deputy secretary, with members from across the department’s management cadre. It had a wide-ranging agenda, and its monthly meetings would usually include consideration of two or three papers about emerging health policy issues. This mechanism promoted cross-portfolio contribution to the development of policy ideas.

In January 2017 Greg Hunt was appointed minister for health, and it soon became clear that he and Bowles had quite different views of the role of the department in policy development. These tensions came to a head over the Commonwealth hospital benefit — a policy idea which had been canvassed in a discussion paper released as part of the reform of the federation process initiated by then prime minister Tony Abbott.

Following the quiet termination of the reform of the federation process, the department continued work on the policy and had contracted with think tank Global Access Partners to convene a group of interested parties to explore the proposal. News of this work was leaked just before a Senate estimates hearing in May 2017, leading to criticism of the department from all directions, including Hunt. He claimed that he had instructed Bowles to stop work on the idea in March, while the secretary told estimates that “policy thinking should always happen and we need forums to make that happen”.

Bowles resigned three months later and was replaced by Glenys Beauchamp, who had served as secretary of the Department of Industry, Innovation and Science when Hunt was the minister there.

Beauchamp lost little time in abolishing the department’s strategic policy committee. Soon afterwards, staff were told that advice to the minister setting out policy alternatives should not include the department’s recommendation as to the preferred option. This was an early manifestation of the Morrison doctrine enunciated after the 2019 election: the public service is there to implement policy set by ministers.

Much of the health policy train wreck that has characterised the past two years can be put down to a minister who doesn’t want advice and a department that lacks the structure to provide it. However, there are other factors at play.

When I first had management responsibility for a staffing budget in the department in 1994, there was enough money allocated to training and staff development for every policy officer to attend a professional conference (such as the Economic Society of Australia or the Public Health Association of Australia) every year. In addition, the department contracted with a university to deliver a health system financing and policy course using speakers drawn from the university and the department. Staff were actively encouraged to undertake a bespoke graduate diploma in health policy from the same university.

By 2019 the training and development budget was enough to allow one in 20 staff to attend a conference (as long as it was in Sydney or Melbourne, where travel costs were low). Staff could apply for support for study, but support was usually limited to a few hours of study time a week. In short, the department no longer invested in maintaining and improving the professional and health system-specific knowledge and skills of its staff.

Another factor has been the rapid turnover of management personnel. The 2013 capability review observed that “SES officers generally reported a lack of transparency around appointment processes and expressed concern with being moved from role to role with limited consultation, explanation or notice. There appears to be a ‘trouble shooting’ approach to employee appointments, driven by unforeseen changing organisational priorities.”

This still appears to be the case. For example, data reported by the department to the aged care royal commission showed that the average tenure of an SES officer in positions in aged care between 2016 and 2019 was only a little over a year. Between 2014 and 2019 the private health insurance branch had five different heads. In some cases there were strong rumours that officers acknowledged by their peers as doing an excellent job were transferred to other positions at the behest of the minister’s office, following complaints from interest groups.

The Australian health sector is highly complex. Services are delivered by state governments, thousands of individual doctors and other health professionals, and large corporate entities. Health technology such as pharmaceuticals and medical devices are provided by large multinational companies. Some of the most powerful unions and lobby groups in the country (the AMA and the Pharmacy Guild) devote a lot of resources to influencing government policy. Many interest groups have a strong corporate memory, held by senior staff who have spent many years working in the particular sector.

Successful policy development and program delivery require departmental officers to have a strong understanding of this complex environment generally, and of the particular structural issues and regulatory framework applicable to the specific area they are working on. All too often staff are moved on before they have developed the understanding to make a significant contribution.

The lack of a knowledgeable workforce with relevant expertise — combined with the dead hand of staff ceilings — has led the department to an excessive reliance on consultancy services. Austender shows that in 2018 (before COVID-19) the department let 254 contracts for consultancy services, worth a total $61.3 million. Many of these were for legal services or specialist technology assessment. Others were for tasks that ought to have been well within the scope of departmental staff. For example, the University of Melbourne received $44,000 for “desktop research on proposed policy changes that influence medical practitioners”.

As the prime minister and others in his government have observed, Australia’s health and economic outcomes in the first two years of the pandemic were better than those in many other countries. But they could have been so much better if there had been timely vaccine procurement and delivery, effective quarantine services, and an implemented strategy to look after the vulnerable people receiving aged and disability care. The Department of Health is at least partly responsible for the failures in these areas, although ministers must also take responsibility.

The most recent failure is the booster vaccination program for aged care residents. When it became clear that the rapid spread of the Omicron variant would require the population to receive a third vaccination, the department let a contract with a private provider to deliver booster shots in residential aged care services. But rather than providing for maximum urgency, the terms of the contract apparently allowed the contractor to stand down over the holiday period, at the very time when families and others are most likely to wish to visit their relatives.

This is just plain incompetence, with tragic consequences. On December 17 last year there were 105 aged care residences affected by COVID-19, with 196 cases. By January 20, 1198 services were affected, with 7861 residents testing positive, and 216 people had died.

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