Table of Contents
Australia has a generally good health system, but it is changing in response to existing challenges and it faces new challenges which require substantial reform if the system is to remain affordable and effective. The system is huge, with expenditure in health accounting for around 9.7% of Australia’s annual gross domestic product (GDP). It is difficult to imagine an area of public policy and service delivery with which the average Australian citizen would have more contact, or of greater importance to the community. As a result, substantial reform is difficult – politically, financially and logistically.
This chapter examines some of the options for reform and restructuring of the health system to meet new challenges, in the context of our current federal system. Most of my perspectives are from practical experience at a federal level, rather than any particular theory of how our federal system should work. First I will examine some of the principles of effective and responsive government including some new ways in which government can and often does achieve results, working across traditional institutional boundaries. But despite improvements in whole-of-government collaboration, for major ongoing national priorities like health, poor institutional structures can still present major practical obstacles to achieving efficient and effective outcomes. This is explained in the second part of the chapter. The challenges lie at both the national level, where we need the accountability and efficiency of a system based on national funding and national standards – and at the regional and local levels – at which health services need to be adapted and delivered, but where our institutional infrastructure is comparatively weak: there is a need for greater directness, simplicity and clarity in the relationships between these levels.
The third part of the chapter talks a little more about what is needed at each level of the health system, particularly the local and regional levels. It becomes clear that we have to start considering some new institutional options, within our current federal context, if we want to maintain the best possible health system into the future. The model I propose would be more patient-focussed than the one we have now, but would also have in-built incentives to improve efficiency. It would also more effectively address equity, in my view, giving more resources to regions and communities (including Indigenous communities) that most need additional support.
The choice facing governments is not one between theoretical, idealised models of new systems, on the one hand, and small practical incremental solutions to immediate problems on the other. It is a mixture of both. If a more incremental approach is pursued, it is important also to have a clear strategic direction to avoid ad hocracy; if government is willing to consider systemic change, it must include measures that deliver tangible improvements along the way as well as lead to structures with better in-built incentives for improved performance. Clearly my preference is for the latter approach.