Findings in the detailed report from the Special Commission of Inquiry into Healthcare Funding are
A fundamental assumption of this Report is that it is desirable for the State of NSW to have and fund a universal healthcare system. Universal healthcare coverage remains supported by the Addendum to the NHRA, as well as by provisions within the Health Services Act. Universal healthcare coverage is part of the social contract between Australians and their governments.
The NSW health system is a good one. It comprises doctors, nurses, and other clinicians and workers who are well trained, highly skilled, and dedicated. It is well managed. The money allocated to NSW Health by a combination of NSW Treasury and the Commonwealth Government is not wasted. It is neither mistake nor incident free, but any person suffering an acute illness or injury that attends a NSW public hospital is likely to receive treatment and care comparable to the best that is provided in any other developed country.
The system, however, has failings. One significant failure is that adequate and timely primary care is not available to parts of the NSW population.
There has been a failure to embed prevention in all its forms into the health system, despite repeated and evidence based recommendations to do so.
NSW public hospitals have many elderly patients in wards for extended periods of time beyond any need for acute care to be provided to them. These are people who could and should be cared for in aged care facilities.
It is many years past the date from which the Commonwealth Government should have been working and collaborating on a regular basis with the NSW Government and NSW Health to ensure gaps in primary and aged care did not emerge, and to embed preventive services into the system and to fund them.
There are parts of the health workforce who are suffering from “burnout”. At the time of writing, parts of the health workforce are engaged in industrial disputes with the State Government. Outdated awards, a decade long public sector “wage-cap”, and a lack of parity with pay available in other states have all contributed in varying degrees to that situation.
Based on all I have seen in the last 18 months, the Long Term Health Reforms outlined in the Addendum to the NHRA, and its aspirations for “shared intentions” and to “work in partnership” towards a “nationally unified and locally controlled health system”, are currently (and have been for five years now) just words on paper. If that situation changes, it will be long overdue.
The health of the population and the need for prevention: Chapter 10
Chronic disease has become the leading cause of illness, disability and death in Australia, accounting for approximately 90 per cent of all deaths. Rising rates of chronic disease have a significant impact on the demand for health services.
Targeted policies that address cohorts with higher rates of chronic disease – for example, those experiencing socio-economic disadvantage and those living in remote areas – can bring significant gains.
The theory that compressing the period of morbidity that people experience may have healthcare cost and other economic benefits is the subject of considerable medical and economic literature. A vast amount of research and academic work has been undertaken suggesting that health services, programs, and policies aimed at disease prevention or early intervention have economic benefits.
An ageing population (with high rates of chronic disease) will, as a matter of certainty, be one of the main contributors to the growth in demand for health services, and the growth in cost to the system. If NSW Health continues to be funded as a system that treats acutely unwell people in public hospitals, there is a risk its resources will soon be overwhelmed by what looms as a huge increase in healthcare demands by an ageing population with high expectations.
The lack of funding or action to adequately prevent (or intervene early in) chronic disease is, at best, a curiosity. It should be a top priority. Not only for potential economic and cost saving benefits, but for population health reasons.
“Prevention and wellbeing” is identified as a “priority” and “Long Term Reform” in the Addendum to the NHRA. This has not inspired much action. The evidence demonstrates a greater desire for ephemeral aspiration than the funding of anything actually aimed at “prevention and wellbeing,” ensuring it is done, and analysing the outcomes. No additional funding was provided for it in the Addendum to the NHRA.
The Commonwealth Government does not fund the states, including NSW, to do much more than provide acute care services. Partly (but not solely) because of this, prevention is inadequately prioritised and funded in the NSW public health system. Despite being aware for decades of the need to assist health departments and agencies to shift out of a “reactive mode” and embed prevention firmly in the health system, governments - both State and Commonwealth - have largely prioritised shorter term markers. On the basis of an overwhelming amount of expert evidence, that must change.
If one seeks to understand how much NSW Health spends on “prevention,” it is not easy to find a definitive answer. This might be explained by the imprecise way that “prevention” is defined. This is important: a lack of clarity concerning what is “prevention” can act as a barrier to transitioning the health system into a more preventive one, as well as leading to an undesirable opaqueness about claims made concerning expenditure on prevention.
Executives within the Ministry of Health, management of LHDs, and the health workforces within districts are aware of the need to ensure adequate services are provided (including preventive health measures and community and home based care) to limit the number of people who must be treated in our public hospitals. Collectively, they have the expertise and skills to stand up a more proactive, prevention based health system. They cannot succeed in that endeavour without the required funding and leadership.
“Prevention” of disease (or early intervention) is of such importance that preventive health should be expressly identified as a whole of government priority against which any new initiatives and policy proposals brought forward by all branches of government should be assessed. Prevention and early intervention must be firmly embedded into the NSW public health system. This will almost certainly require greater investment by the Commonwealth Government and the State of NSW in preventive services, as well as some different prioritisation.
This priority should be informed and coordinated by a multiagency, multidisciplinary body led by NSW Health – ideally under the oversight of the Chief Health Officer.
Primary and aged care: Chapter 11
Primary care is a key component of all high performing health systems. The overwhelming body of evidence before this Special Commission reveals that the primary care system in NSW is under severe pressure, and a significant number of people across the State are not able to access comprehensive primary care. While I appreciate this is a funding responsibility of the Commonwealth Government, without meaningful action by NSW Health, this unsatisfactory situation will continue to deteriorate.
With effective primary care, patient outcomes are improved, their need for specialist intervention or inpatient services is minimised, and unnecessary hospital admissions are avoided. Strong primary care is associated with improved population health outcomes for all cause mortality, all cause premature mortality, and cause specific premature mortality from major respiratory and cardiovascular diseases. Effective primary care is a more cost effective form of intervention than acute care delivered in the hospital setting, and increased availability of primary care is associated with higher patient satisfaction and reduced aggregate healthcare spending.
The number of medical graduates pursuing general practice as a vocation has substantially decreased, while the numbers pursuing several specialities has risen. While the primary care system across NSW is generally under severe strain, it is particularly so in regional, rural, and remote areas. That strain manifests itself in various ways, from the complete absence of any primary care services in some locations, to practices with their books closed to new patients in others, a lack of accessible bulk billing practices, and long appointment waiting times.
The reasons for decline in the availability of primary care are multifactorial. They include the inherent challenges associated with the operation of general practice, including increasing patient complexity, the perceived (and perhaps actual) inadequacy of current MBS rates, and the pressures associated with operating a small business (and their impact on the wellbeing of clinicians). Those challenges exist in all areas of the State, but can be more acute in regional, rural, and remote areas.
Given the role of primary care in promoting and maintaining population health, it is of no surprise that there is a correlation between a decline in access to primary care and a subsequent increase in patients presenting to hospitals with higher levels of acuity. A high proportion of the population’s healthcare needs would benefit from consistent management in the primary care setting, particularly in circumstances where: a. 66 per cent of adults, and 26 per cent of children, are overweight or obese; b. 16.6 per cent of adults have diabetes; c. 36 per cent of adults have high cholesterol; d. 31 per cent of adults have high blood pressure; and e. 24 per cent of children are developmentally vulnerable in one or more domains in their first year of school.
Most care for chronic conditions is provided in the primary healthcare setting by general and allied health practitioners.
A lack of access to primary care also means that continuity of care – an important feature of effective primary healthcare, particularly for those with multiple chronic conditions – is difficult to maintain.
Urgent Care Services or Clinics reduce pressure on Emergency Departments by siphoning off a proportion of the lower acuity patients who would otherwise be presenting. Viewed through the infinitely narrow lens of Emergency Department wait times, this might be seen as a solution to the problems caused by the absence of accessible primary care. Viewed more widely, it is plainly not.
Urgent Care Services or Clinics are able to provide episodic care to a cohort of patients who require it. In some cases, that care could have been provided by a functioning primary care market. In others – such as care required afterhours – it may never have been met by conventional primary care and would instead have increased the patient load borne by the local Emergency Department. In this sense, Urgent Care Services or Clinics can make a positive contribution to the health services landscape. However, nobody should pretend that they are any substitute for effective primary care. They are not.
The view that NSW Health should always prioritise acute care over the delivery of effective and accessible primary care fails to grapple in any meaningful way with the fact that the absence of adequate primary care will likely only increase the demand for “a service that only [NSW Health] provide[s]”; namely, that delivered through Emergency Departments or in the acute care setting, at vastly higher cost and with inferior long term clinical outcomes for patients.
Whenever the State has stepped in to provide primary care through a salaried model or otherwise supported the delivery of primary care to a community where it is lacking, the State has obtained access to the MBS (a Commonwealth funding stream) to offset the cost of delivering that service.
The view that it is not the function of the LHDs to invest in the provision of primary care is incompatible with their statutory purpose and functions as set out in ss 9 and 10 of the Health Services Act. Those functions include to “promote, protect and maintain the health of the residents of its area” and “establish and maintain an appropriate balance in the provision and use of resources for health protection, health promotion, health education and treatment services”. Activities directed to health protection, promotion, and education are not limited to acute care settings and, in many respects, are core functions of primary care. The statutory regime contemplates that LHDs will deliver the care needed to fulfil their stated primary purposes. In doing so, it does not draw a distinction between primary care and acute care, or hospital and community based services.
Where a community is adequately serviced by a primary care market, there may be no need for the LHD to provide those services itself. However, where there is a thin primary care market, such that it does not meet the needs of the community, or no market at all, the LHD may need to provide primary care services (or support the delivery of primary care in a struggling market) consistent with its primary purpose and statutory function.
There are several examples of where LHDs are currently doing exactly that in areas of need, including (among others) in the Murrumbidgee LHD, the Mid North Coast LHD, the Hunter New England LHD, Western NSW LHD, and the Central Coast LHD. LHDs – working in collaboration with PHNs and any existing service providers – are best placed to identify and address gaps in primary care services. That enables place based solutions to be designed having regard to the needs of the community, which may include the LHD itself providing, or providing support for, primary care. Those place based solutions necessarily include attracting a workforce to deliver the care needed in those regions. The overwhelming weight of the evidence supports a conclusion that clinicians who have historical links to regional areas, or who undertake their training in regional areas, are more likely to return to practise in them. Providing individuals with the opportunity to deliver primary care through a salaried position would likely enhance the prospect of professionals opting to commit to the delivery of primary care in rural and remote areas; perhaps with the added benefit of using that workforce synergistically to address workforce challenges in other areas of the public health system within the regions.
As part of a place based response, consideration must be given to engaging a salaried primary care workforce, whereby general practitioners and other workers are employed by NSW Health to provide accessible primary care in underserviced areas. In the process of award reform, any barriers to this occurring – including what I have been told is a failure to specifically identify general practitioners as specialists capable of being employed as Staff Specialists in the current award – should be removed. To the extent that NSW Health provides traditional primary care services, the Ministry of Health should pursue funding from the Commonwealth Government – whether through s 19(2) exemptions or otherwise.
Thin or failing aged care markets are also having a significant and detrimental impact on care delivered through public hospitals in NSW.
On any given day, there are significant numbers of elderly patients occupying beds in public hospitals that could, if an aged care bed were available, be discharged. Patients in that category are described as “maintenance patients”. The high number of maintenance patients occupying hospital beds at any given time has financial implications for the NSW public health system, and creates risks for patients and staff. Maintenance patients are a high cost to the system. Those costs are borne by the LHDs.
The large numbers of maintenance patients also create bed block, impacting the ability of a facility to move patients through the hospital. This in turn can result in ambulance ramping or the treatment of patients in the waiting room, which may not be optimal for all patients and may be unsafe in certain circumstances.
When elderly patients are in maintenance beds, they are not in the optimal environment they should be. Being in a hospital beyond the time when a patient is clinically suitable for discharge brings with it certain risks, including hospital acquired complications, a higher risk of falls in elderly patients, and the effects of long periods of isolation away from their home environment and families.
NSW Health suggested that by stepping in to address this problem, it would be “assuming responsibility for delivering services that are not only squarely within the Commonwealth realm of responsibility but also ancillary to health services”. This significantly oversimplifies the arrangements made under the Addendum to the NHRA. Victoria has maintained a presence in the aged care market and, like private providers of aged care services, is funded by the Commonwealth Government to do so. NSW Health has also maintained a presence in the aged care market through MPSs located in rural and regional areas. Commonwealth funding is provided for these services.
Serious problems will continue to bedevil our public hospitals if something is not done urgently to address the lack of aged care beds available for the particularly challenging patients which the private market based providers will not accept. It is unrealistic to think that this problem can be solved without the State stepping in to play a greater role than it presently does in the aged care market – albeit it is entitled to be funded by the Commonwealth Government where it does so, at least to the same extent as would any other market based provider of aged care services. A similar issue arises in relation to patients who are suitable for discharge but waiting on National Disability Insurance Scheme (NDIS) acceptance and support. This has a similar impact on the bed flow of facilities to aged care patients.
There are also instances where NDIS providers seek to relinquish care of their clients to district facilities, where the accommodation provider for that client does not have staff with the appropriate skill set to effectively manage the challenging behaviours of that client. Likewise, there are also “social admissions”, where the district becomes the “default provider” for NDIS participants due to breakdown of their living arrangements or carer fatigue and inability to obtain respite care.
Although the evidence does not suggest that patients waiting on NDIS acceptance and unable to obtain appropriate support are creating problems of the same scale as those awaiting placement in an aged care facility, this situation should be closely monitored and action taken early to avoid the development of a system wide problem.
First Nations Healthcare: Chapter 12
In 2005, the then Aboriginal and Torres Strait Islander Social Justice Commissioner, Tom Calma AO, delivered his Social Justice Report, which recommended, (among other things) that: a. the governments of Australia commit to achieving equality of health status and life expectation between First Nations Peoples and non-Indigenous people within 25 years; b. the governments of Australia commit to achieving equality of access to primary healthcare and health infrastructure within 10 years for First Nations Peoples; c. resources available for First Nations Peoples’ health, through mainstream and First Nations specific services, be increased to levels that match need in communities and to the level required to achieve clearly identified benchmarks, targets and goals; and d. arrangements to pool the funding available for First Nations Peoples’ health should be made, with states and territories matching additional funding contributions from the Federal Government, with the ultimate objective of increasing the level of flexibility in the deployment of that funding pool.
In the almost 20 years since that report was delivered (and despite the well intentioned efforts of many working within the public health system across Australia), little progress has been made in relation to what can readily be discerned as the objectives of Mr Calma’s recommendations.
NSW Health is aware of the importance of Closing the Gap, and has taken action over a number of years in an attempt to improve services for, and health outcomes of, First Nations people.
AMSs and ACCHOs are vital to the communities they serve. They are an indispensable, central hub of those communities.
First Nations people are under represented in the medical, nursing and allied health professions in NSW. A strong First Nations health workforce is rightly seen as critical to ensuring cultural safety in the health system. However, there are unintended negative consequences of setting targets that NSW Health organisations must meet for their First Nations health workforce. AMSs and ACCHOs expressed frustration that they have long recruited and trained staff, only to lose them to jobs with higher salaries in LHDs or NGOs that have been given funding to provide First Nations health services but do not have the First Nations workforce required to deliver the service.
No one within an ACCHO or AMS expressed any criticism of staff members who have moved to take up LHD roles, and they uniformly agreed that First Nations health workers should receive the highest remuneration on offer for the important work that they do. However, the cannibalisation of the workforce they recruit and nurture is a substantial drain on their limited resources and makes it challenging for them to deliver the care required by their communities.
Problems like this will persist in the absence of truly collaborative health service planning and delivery of First Nations health services. Only with constant and meaningful collaboration will it be possible for LHDs and ACCHOs/AMSs to properly explore opportunities to seamlessly coordinate services and share staff rather than having to compete for those that are in short supply.
The importance of meaningful consultation and collaboration between NSW Health agencies and First Nations communities and care providers cannot be overstated. It is critical to ensuring that health services and research are culturally appropriate and has the added benefit of promoting efficient use of available resources. Effective collaboration can also help to prevent waste, avoid service gaps that exacerbate unmet need, and facilitate coordinated planning focussed on optimising outcomes. Meaningful consultation does not mean simply telling the community what is planned. It means identifying a specific community’s needs and priorities in collaboration with that community, and codesigning solutions. Needs may differ between communities, but systemic change is about policies and practice, and these must recognise the barriers experienced, including in rural and remote areas, through local consultation with First Nations people.
Joint clinical service planning between ACCHOs, AMSs, and LHDs would address a lot of concerns. This would reduce duplication and allow them to work together to address workforce shortages and resource limitations. It would enable coordination of patient journeys in the community and in hospital, and collaboration to address issues earlier, rather than relying on siloed, output driven funding agreements. Joint clinical services planning would enable each group to optimise the value of their contribution and facilitate sharing of resources, communication and effective referral pathways in both directions. It is precisely what was recommended by Commissioner Calma. Aboriginal health services are underfunded. In addition, AMSs and ACCHOs have little autonomy as to how they can spend funds they receive, particularly from the Commonwealth Government.
AMSs and ACCHOs could use funds more effectively from a health outcomes perspective if they were allowed to make the decisions about where to and to what extent they should allocate those funds based on the needs of their communities. Undoubtedly, they are best placed to make those decisions.
The funding that those organisations receive is often short term. It should be blindingly obvious that short term funding in healthcare is undesirable. It makes the establishment and maintenance of health services and programs attached to that funding difficult to the extent that the funding almost becomes counterproductive. Workforce planning based on short term funding is stressful for everyone involved, and burdened by obvious disincentives relating to both recruitment and retention.
Reporting requirements in relation to funding are considered burdensome. There is evidence that supports this view. That is not to suggest there should not be proper accountability for the use of public funds, including as to the outcomes achieved from funding particular projects or services. The preponderance of evidence, however, is that the administrative burdens on AMSs and ACCHOs relating to funds they receive from government is unreasonably onerous, time consuming, and a financial drain on them.
Statewide Services: Chapter 13
There are patients with a spinal cord injury who are not accessing the highly specialised care offered by the NSW Spinal Cord Injury Service, or who are not accessing those services in a timely way. This occurs because the NSW Spinal Cord Injury Service does not have a centralised registry of all patients with spinal cord injuries who may be receiving care without having been referred to the specialist service. A coordinated “State based” approach to the planning and delivery of highly specialised services like the NSW Spinal Cord Injury Service is critical to its effective operation.
There are presently insufficient specialist rehabilitation beds at the Royal Rehab Group’s facility at Ryde and Prince of Wales Hospital to enable patient flow, and therefore those services are difficult to access. There are also associated bottlenecks in intensive care and the acute services at Royal North Shore Hospital and Prince of Wales Hospital because there are insufficient rehabilitation beds.
The three adult brain injury units cannot presently provide traumatic brain injury rehabilitation for all people in NSW that require it because there are not enough beds. There has been no increase in the number of inpatient beds available in over 20 years. The inability of Statewide Services like these to keep up with population demand in part reflects the lack of central decision making in relation to the nature and volume of services to be provided. Similarly, there is no centralised decision making process for decisions relating to funding, the location of services, or staffing of services. For example, the various brain injury rehabilitation services are managed and funded by the LHDs in which they are situated, and the NSW Brain Injury Rehabilitation Program does not receive any funding directly for its services or patients. As a result, differences in the relative funding allocated to services within the NSW Brain Injury Rehabilitation Program can arise between LHDs.
A centralised body – involving representatives of the Agency for Clinical Innovation (ACI), LHDs, and appropriate divisions or units within the Ministry of Health – should have oversight and responsibility for the governance and operation of supra-LHD and Statewide Services; including in relation to matters such as planning, implementation, funding, data management, performance agreements, monitoring outcomes and review of the ways in which services are delivered.
Funding for Statewide Services should be allocated centrally, before flowing to the host LHDs via service agreements that clearly specify the services to be provided, as well as a series of measurable outcomes to be achieved.
An effective centralised approach to the planning, funding, and delivery of supra-LHD and Statewide Services – facilitated and coordinated by the Ministry of Health – must necessarily draw on relevant expertise and knowledge from within the particular service, the LHDs which host those services, and other parts of the wider system, such as the Pillars.
The delivery of paediatric services across NSW would be enhanced by the development of a Statewide plan and strategy dedicated to those services. There would be benefit in such a plan addressing matters such as: an identification of the services that can be expected to be provided in the specialist children’s hospitals and those services that sit within LHDs; how those services interact with and support each other; and a clear identification of the referral pathways into the specialist children’s hospitals (including referrals from general practitioners) and then back to local services for ongoing care and management.
That plan and strategy could also support the development of approaches for LHDs to receive specialist support when managing paediatric patients through virtual care models, or a hybrid of virtual and face to face care.
While its funding should be informed by the system wide service planning process discussed elsewhere, there is evidence that Justice Health is underfunded in relation to the demand for its services. It exists in a “capped financial environment” that does not appear to reflect (or be based on) the health service needs of the population it serves, and the extent of demand.
Rates of obesity (and conditions associated with it) are high in prison populations. This becomes a burden on the public health system when prisoners with metabolic and related diseases are released. Funding should be provided (or redirected) to Justice Health (supported as appropriate by a suitably qualified group or agency within NSW Health) to enable it to set the diet of the prison population.
There are bed block problems in transitioning patients under mental health orders from high security settings to medium and low security. This is the result of a lack of bed availability. This should change. No doubt the transition of patients from high, to medium, to low security settings is a complex matter for the most experienced relevant health experts. Those decisions should not be complicated by bed availability issues. That is not in the interests of the patients concerned, or the LHDs or communities to which they will return.
There is also an issue in my mind as to the utility or appropriateness of the division of funding between Justice Health and Corrective Services NSW concerning psychiatric services (Justice Health) and psychological services (Corrective Services NSW).
I am concerned enough about both of those issues to recommend that they be independently examined as a matter of urgency.
Affiliated Health Organisations: Chapter 14
The current processes for negotiating service agreements with AHOs lacks transparency in terms of their budget allocations. There is little in the way of genuine “negotiation” in relation to AHO yearly budget allocations.
There is no reason why philanthropic funds donated to not for profit organisations should be used to subside the delivery of the public health system because the funding provided by NSW Health does not meet the cost of delivering certain services. The existing processes for AHOs to secure capital funding would benefit from improved transparency and certainty to promote longer term capital planning. There are significant budgetary and governance implications if they are unable to maintain the capital required to operate those services. Those risks flow to the public health system as a whole, which is heavily reliant on those organisations for the delivery of a range of services, including highly specialised services.
AHOs should receive funding sufficient to cover the costs of delivering the services they are required to deliver under their service agreements. As a basal proposition, this much is accepted by NSW Health.
It should not be assumed by anyone (including NSW Health) that, when assessing the fair cost of an AHO delivering any particular service, the unique circumstances of that organisation can be ignored. It is possible (maybe likely) that the fair cost of having an AHO deliver a service exceeds what it might hypothetically cost NSW Health if it were to attempt to deliver that service itself. To the extent that AHOs incur capital costs in connection with the delivery of the services required of them, these must also be taken into account in determining the level of funding that they receive.
AHOs are, by reason of their status under the Health Services Act, part of the public health system. However, unlike LHDs, they remain independent organisations with their own legal obligations. Accordingly, if they do not receive funding sufficient to cover the cost of delivering services, their long term sustainability is at risk. While a series of negative results against budget for an LHD is not an optimal result, it does not risk their survival as an organisation, nor does it expose those responsible for controlling them to action for trading while insolvent. The same cannot be said of AHOs and their directors.
AHOs are in an inferior bargaining position to the Ministry of Health or LHDs in their respective negotiations with them. There is a risk that this power imbalance will continue to operate to the detriment of AHOs (and the system of which they are a part) for so long as they are required to enter into service agreements with LHDs and thereby compete with all of the other services to be delivered by those districts out of their limited budgetary envelope. Adjusting the arrangements so that it is the Ministry of Health that is responsible for funding AHOs through service agreements may help to overcome these problems.
Each AHO should enter into a single service agreement with the Health Secretary – in much the same way as currently occurs for the only networked AHO – and negotiations with those organisations regarding funding and the nature and location of services to be delivered under those agreements should principally occur at Ministry level. Relevant LHDs can, and should, be involved in that process when necessary.
Planning the services to be provided by each AHO, and where those services are to be provided, should form an integral part of the wider service planning process discussed elsewhere in this Report. On an annual basis, and in conjunction with the planning and identification of the services to be provided by each AHO under their respective service agreements, Schedule 3 to the Health Services Act should be reviewed to ensure that it accurately records the recognised services and establishments of each of them and amended to the extent necessary to reflect those services. There is no good reason why it ought not be accurate at all times.
A structured process should be implemented to promptly resolve any dispute between the Ministry of Health and an AHO regarding the extent to which funding offered is sufficient to meet the cost of delivering the level of service required under a proposed service agreement. Whatever process might be adopted, it must be independent, able to be unilaterally triggered by either the AHO or the Ministry of Health in the event of a dispute, and capable of meaningfully regulating the “purchaser/provider” nature of the relationship to be reflected in any subsequent service agreement. Such a process will not, however, interfere with or usurp the Minister’s power to determine the subsidy to be paid to each AHO.
Single Digital Patient Record: Chapter 15
NSW Health has commenced its SDPR project. Evidence suggests that the SDPR will bring many benefits to the health system of the kind discussed in the Strengthening Medicare Taskforce Report, and other reports.
Something akin to an SDPR was recommended by Commissioner Garling more than 16 years ago. It is a failure of government that an SDPR has not been implemented in the timeframe recommended in that report (i.e., by 2013).
A serious limitation of the SDPR is that there is no current plan for it to interface with primary care providers including general practitioners. There also does not appear to be a plan for it to extend to the St Vincent’s Health Network, or other AHOs.
Access to the SDPR should be made available to primary healthcare providers. One advantage of linking the SDPR to primary healthcare providers, and in particular general practitioners, is that it will enable data to be collected about services provided by general practitioners, including preventive and chronic disease management services. It will enable greater connection and information sharing between those providing primary care services, and those providing acute services to the same patients.
The SDPR should also be accessible to the St Vincent’s Health Network and other AHOs. Unless NSW Health rolls out the SDPR to them, it risks a fragmentation of access to important data within the NSW public health system itself; the very thing that it is intended to overcome. That is obviously undesirable, and could pose health risks and lead to inefficiencies. As to the St Vincent’s Health Network, it is a networked AHO, and operates a public hospital – the SDPR must be connected to it. This should not wait until after its expected completion in 2029. The cost of making the SDPR accessible to AHOs (in their capacity as part of the NSW public health system) should be borne by NSW Health.
Planning: Chapter 16
A robust health service planning function is critical to the delivery of healthcare in NSW.
The capability of NSW Health to design and implement a feasible and successful system wide approach to health service planning relies on its decision making as to what the public health system is, and the boundaries of “the civil contract … between taxpayers and the Government about what [public health services] might be received in a particular community”; particularly in the context of a “constrained financial environment”.
The current approach to public health service and workforce planning in NSW is not built upon a comprehensive understanding of population health needs from the bottom up.
The widespread disinvestment in planning resources within NSW Health and dissolution of its service planning branches, as well as underinvestment in retaining planning skill at the LHD level, has fostered a “patchy” approach to service and workforce planning.
The emphasis on workforce availability (rather than population need) as a driver of service planning reflects the deficiencies in the current workforce planning processes, as well as the limited integration of workforce and service planning. In particular, NSW has not “done a very good job of predicting ahead of time how many doctors [it will] need, [and] how many nurses [it will] need”, nor facilitating collaboration between educational institutions and medical colleges for the delivery of that workforce.
Because LHDs and SHNs have traditionally delivered facility based services, planning processes have had a tendency to be driven by the needs of capital processes, infrastructure and prioritisation of limited capital funds. This “bricks and mortar” approach is problematic. The “real planning need or the needs of [a] community [have] nothing to do with a facility”, and instead demand the provision of services in a community in a different way, for example, through extended general practice or extended scope of practice for nurses or allied health.
The absence of strong systematic planning has fostered the development of services in response to other drivers, such as funding and workforce availability, political considerations, and historical service commitments. This method of growth has been ineffective in promoting patient safety and fiscal responsibility, and has culminated in a public health system that is increasingly being stretched unsustainably in an attempt to deliver as many services, in as many locations, as possible.
There is a clear need to approach system wide health service planning in NSW in a way that better combines the local knowledge and assessment of LHDs and SHNs in relation to population health needs, in genuine collaboration with (and information sharing between) them and other providers of healthcare within their catchments, and overarching system wide coordination delivered through the Ministry of Health. Greater central involvement in planning is essential to identifying the most optimal and equitable distribution of services and (finite) resources across the State. The Ministry of Health should take on an oversight role for service planning, but this should not extend to dictating to LHDs and SHNs the way in which they are to go about delivering their services. This is a matter for local decision making. However, where the Ministry of Health is required to drive the development and maintenance of services that are necessary to service the population needs of more than one district, the Ministry of Health could drive that service delivery through purchasing and activity targets or specific initiatives.
Publicly available planning documents should spell out the identified health needs of the community, the services that it is anticipated will be required to meet those health needs, and how (and by whom) it is intended that those services will be provided. These documents should also be explicit about what members of the community requiring those services should expect in terms of accessibility (including transportation arrangements, where necessary) and waiting times (the metrics around which will inevitably be informed by appropriate clinical evidence). The first step in the process must be the identification of the health needs of the local community. Unless community needs are identified, there will potentially be large gaps in service provision, including gaps that are invisible to service planners. The health needs of a community should be the core consideration in place based planning.
The identification of need, for the purpose of service planning, should involve population needs analysis, demand analysis, and analysis of socio-demographic factors, as well as genuine community engagement. In recognising that LHDs are but “a single organisation in a health ecosystem”, it should also involve engagement with other local organisations delivering services, in both the primary care and the acute care sector, to determine both the quantitative and qualitative needs of the community.
The “needs identification” step of the process will inevitably be best informed by a ground up approach, whereby LHDs and SHNs with intimate knowledge of the needs of the populations they serve and the associated health matrix can feed information into the planning process while also using information flowing down from the Ministry of Health, which has a broader understanding of service availability within the State.
The next step in developing an approach to service planning is deciding what services should in fact be delivered by the public health system in order to meet the identified need. This involves a broader consideration of what the public health system is and what it can deliver in an economic and safe way. There is a need for NSW Health to consider, first, what services fall within the ambit of the “public health system”, and secondly, how the public health system can operate to offer those in scope services to the people of NSW in an optimal and equitable way. That will require decisions about what services should be provided and where. That must be done in a coordinated way across the system as a whole to ensure the optimal deployment of resources. This must be done as part of an open collaboration with community and other providers of healthcare to that community.
Community engagement around health services planning must be a genuinely consultative process. Telling the community what has been decided after a planning decision has been made is not consultation. Good community consultation requires a high degree of transparency.
Albury Wodonga Health: Chapter 17
As a general matter, it is not optimal practice for any health infrastructure to only be conceived and designed around a particular sum of money that happens to be available. That, instead, is an optimal way of risking the wastage of precious public funds.
The money said to be available for health infrastructure should not drive service delivery. Rather, any infrastructure spend should be based on what the health service needs of the catchment population are and will be, which themselves will be based on a variety of factors such as (but not limited to) population growth, ageing profile, and various socio-economic factors.
There is little evidence to suggest that the proposed redevelopment of the Albury Hospital was based on this kind of analysis. Equally, there is little to suggest that the proposed redevelopment of Albury Hospital has had meaningful regard to the views of the medical and other clinical workforce of Albury Wodonga Health, of management, or of the community. While those views are not determinative of any particular outcome, there must be meaningful engagement with them, that appears to be either absent here, or at best insufficient.
Workforce: Chapter 18
The NSW public health system’s most important asset is its workforce.
The health workforce in NSW is comprised of dedicated and highly skilled people, who everyday work to provide high quality care to the people of NSW. There is, though, now a need to take steps to ensure that the public health system will have the benefit of such a workforce long into the future.
The causes of the current workforce challenges facing NSW Health are multifaceted. Some reflect societal changes – such as shifts in how and where people want to work – which will take time to address. Others are what might be described as system issues relating to how NSW Health plans, engages, and deploys its workforce.
Most of the awards and other instruments setting the terms and conditions of employment or engagement for NSW Health workers do not reflect contemporary work practices. They have not been reviewed substantively for many years. Many terms of those awards date back decades. There was general consensus (except in relation to the Public Health System Nurses’ and Midwives’ (State) Award) that NSW Health awards are outdated and no longer fit for purpose. Many awards are overly long, not drafted in plain language, are frequently ambiguous, and replete with inconsistencies and incoherences (both internally and with other awards dealing with similar professions). The number of awards dealing with allied health professionals lacks any rational explanation except for history. There is an urgent need for a broad project of award reform in respect of NSW Health awards. Recent history suggests that, if that does not occur, NSW Health, and the industrial organisations and their members, will likely continue to be engaged in a rolling series of negotiations and disputes. Indeed at the time of writing this Report, and throughout the duration of this Special Commission, negotiations and disputes have been ongoing.
Extant Visiting Medical Officer Determinations have not been updated since 2014 and require modernisation.
There presently exists a disparity in the rate of pay between NSW and other Australian jurisdictions for some of the health workforce. That disparity was cited as being a factor in some of the difficulties experienced in recruiting and retaining a permanent workforce, particularly in some specialties and regions.
Whether pay parity is ultimately to be achieved or not, there can be no genuine controversy that the pay and conditions of health professionals in NSW should be appropriate to the work performed. Health professionals in NSW should be fairly and reasonably compensated for the value of their work to the system. This will require an assessment of the nature of their work, the skill and responsibility involved, and the contribution it makes to the system, including any changes in those qualities since the last “work value” assessment. The contribution a profession makes to the system should be viewed broadly, not as limited to questions of productivity, efficiency, or savings.
There are overall shortages in applicants for some specialist training programs, such as psychiatry and emergency medicine. Modelling indicates “significant” career opportunities in psychiatry, diagnostic radiology, ophthalmology, and rehabilitation medicine, as well as neurosurgery. Those “significant career opportunities” correspond with a relatively high number of additional trainees needed each year to meet projected demand.
A shortfall in applications for internship positions or for vocational training positions – at least in relation to some specialties – will impact the future workforce. It is from those pathways that the future medical workforce (including specialists) develops, an extensive or prolonged shortage in those pipelines has the very real potential to lead to future shortages in that workforce.
There have also been shortages of specialists to fill available positions in psychiatry, emergency medicine, radiology, and anaesthesia, as well as general practice. Many, but not all, of those shortages are seen in rural and regional NSW. The underlying causes of workforce shortages in rural and regional NSW are multifactorial, but include: a. a perception (which may be mistaken) that work in rural and regional areas is less interesting and professionally satisfying while being more onerous (including in relation to on call obligations); b. a perception of a lack of professional and social support in rural and regional areas, especially for those clinicians who trained in metropolitan areas; c. insufficient financial incentives for metropolitan based clinicians to relocate to rural or regional areas; and d. limited employment opportunities for spouses and partners of clinicians, a lack of suitable accommodation, childcare and other services in rural and regional areas. There are significant shortages of midwives and enrolled nurses across the State, and (as with the medical workforce) a maldistribution of the nursing and midwifery workforce between metropolitan and rural and regional areas.
The shortages in the nursing and midwifery workforce in some rural and regional LHDs correlate with difficulties in attracting students for clinical placements and applicants for graduate positions, notwithstanding the range of incentives, scholarship, and cadetship programs aimed at increasing the attractiveness of rural and regional work. Those shortages are also reflected with a greater use of agency nurses in those areas.
There is value in data that analyses “aged vacancies” - i.e., vacancies in respect of permanent positions that have been advertised but unfilled for some time. Data of that kind is likely to assist in identifying and quantifying the extent (and duration) of a shortage within the permanent workforce at a facility or across a region. The Ministry of Health should take steps to capture and consider data of that kind as part of an enhanced, system level, service planning process into the future. Modelling indicates that some allied health disciplines are experiencing significant shortages compared with service demand, including, for example, radiation therapy, sonography, psychology, podiatry, and occupational therapy. Maldistribution of the allied health workforce is also a significant issue in most disciplines. The reasons for those shortfalls and workforce maldistribution in the allied health workforce are complex but include: a. competition from the private sector and NDIS providers, which typically pay more and offer more flexibility; b. at least a perception of reduced career development or progression opportunities, particularly in rural and regional areas; and c. insufficient supervisors to supervise complete clinical placements for those under training.
Currently, there is no system wide approach to workforce planning, in the sense that the clinical workforce is not established or structured by reference to a detailed assessment of population needs or the supply of clinicians across the system. The need for a system wide approach to workforce planning and engagement has increased in recent times as the effects of “pressure” on the health budget, and workforce shortages and maldistribution have become more acute. Difficult choices must be made as to what services are made available, where, and in what form if the system is to be sustainable into the future. The advantage of a system wide perspective in responding to that new environment is that it provides an opportunity to maximise the efficient delivery of health services across the State by ensuring the most effective deployment of its workforce and budget to achieve that aim. It is essential that the Ministry of Health has a key role in that process, given that it alone has oversight over large amounts of workforce data and the ability to analyse and interpret that data at a system level. It also effectively controls the funding allocated to local organisations to fund their workforce needs.
The current structures have given rise to the untenable situation of parts of the system competing with one another for agency nurses and locums. That results in parts of the NSW public health system bidding against each other, which only results in increased cost to it.
The need for a system wide approach to workforce planning does not mean that the benefits of devolution are to be discarded. To the contrary, local perspective and input remain critical to effective planning.
One significant benefit of a centralised workforce planning function that leverages the oversight and expertise within the Ministry of Health is that it will provide NSW Health with the ability to better observe the impact of the actions or policies of external stakeholders and societal changes on NSW Health workforce (including its future workforce pipeline), and to plan and implement a response to them.
There is no central coordinating function in relation to clinical placements, which can lead to competition between universities for those placements.
There is considerable scope to enhance the planning, establishment, and allocation of clinical placements for university students and vocational training positions for registrars, which will likely deliver significant benefits to the system.
As part of a system wide approach to workforce planning, there should be greater strategic coordination and planning related to clinical placements and vocational training. HETI is well placed to take a leading role in that process, and to perform that function going forward.
While HETI administers a central computer based system (ClinConnect) that facilitates the “booking” of students into placements, there is no central coordination of where placements are established or how students are allocated to them. This approach creates some obvious problems, including that: a. either universities or local organisations end up competing with each other depending on whether demand for placements exceeds supply in the relevant local area or the reverse; b. the matching of students with placements is largely manual rather than allocated in the nature of, for example, the medical intern program; c. because the matching of supply and demand occurs locally and is largely based on relationships, there may be a supply of students at one university and a demand for students at a local organisation that are never matched with one another because there is no central coordination or visibility; d. there is a duplication of administrative work because of the need for both universities and local organisations to make and administer multiple arrangements with one another, with variable terms; and e. there is no central monitoring or direction as to the number of clinical placements that should be established or where they should be established in order to match demand for placements, or future service requirements.
As a result, NSW Health is not able to obtain the benefit that may flow from a more coordinated approach to the allocation of university placements and recruitment of those being placed into identified areas of need at the time of their likely graduation. A more strategic, whole of system approach to allocating clinical placements that aligns (so far as possible) with projected future demand for clinicians in the relevant field is necessary.
The coordination of clinical placements is a function that is best located within HETI, working in close collaboration with Ministry of Health and the LHDs and SHNs. HETI must be appropriately and adequately resourced to perform that role. In doing so, there should be quarantined funding for those roles (perhaps in the form of clinical educators) within HETI that are the interface between universities, students and local organisations to ensure that local organisations are appropriately supported to deliver high quality and effective student placements over the medium to long term. Such roles must be protected from broad brush “efficiency” programs.
Effective consultation between health system management and clinicians is an integral part of a highly performing health system. The Medical Staff Council (and other councils provided for in the Model By-Laws) provides a mechanism for that to occur and for management to harness the benefits of the collective experience and expertise of its clinicians in matters affecting the delivery of care at their hospitals. If Medical Staff Councils (and the other councils) are to achieve that aim, they must provide an effective means of consultation and engagement at the facility and district or network level.
In order to strengthen those processes, the Council structures set out in the Model By-Laws should be reviewed. The role and purpose of each Council should be clearly identified, and they should be complementary of each other.
Following that review, the Model By-Laws should be amended to clearly articulate the purpose and role of each of the Councils, and how they relate or interact with each other.
Having the Chairs of each Council observe Board meetings can only enhance the discourse between management and clinicians. Where a Board has determined not to extend an invitation to Council Chairs to attend Board meetings, they should implement a procedure whereby the Board shall receive reports from the Chair of each of the Councils within their district or corporation on a regular basis (at least quarterly) as to matters that fall within the remit of their respective Councils.
The complaints and grievance policies would benefit from wholesale review and simplification. NSW Health accepted the benefits in doing so, and some work in this respect is under way.
There are high levels of fatigue, stress and “burnout” across the NSW Health workforce.
While the COVID-19 pandemic undoubtedly contributed to this, that high rates of burnout persist within the system should be seen by all of those with an interest in maintaining a strong and effective health workforce as troubling. It is something that must be addressed in a meaningful way, and as a matter of priority.
Given the extent of burnout and low levels of staff wellbeing across the system, more detailed data on those matters should be routinely collected across the system. That will then provide the basis for targeted initiatives (which may differ in different locations) to support and enhance the wellbeing of the workforce and reduce staff distress, including that which is occasioned by burnout.
Funding: Chapter 19
The question of whether the system as a whole is “underfunded” is complex and cannot be answered solely by reference to demand indicators. It requires consideration of what the NSW public health system should be, including the nature of the services that should be available, where those services should be offered, and the timeframes in which patients can expect to be treated. It is only once that system is identified and designed that the necessary funding levels, and optimal models, can be identified.
The historical origins of the “base” figure for funding in the NSW health system – including the size and shape of the health system that it was at least conceptually supposed to have supported – are unknown by those within the Ministry responsible for the preparation of budget submissions, and those within Treasury currently charged with considering and making recommendations in relation to them. That is not a criticism. However, in circumstances where no one can identify the origin of the base from which the NSW Health budget has been (and is being) set, the base cannot be said to reflect an assessment of the level of funding required to deliver a public health system that meets the current and emerging health needs of the population, or that is required to “promote, protect and maintain” the health of the population. Matters such as cost growth and forecasted activity growth are considered in the budgetary process. However, those are matters that inform a consideration of what it would cost to operate the public health system to continue for another year in its existing form. They say little (if anything) meaningful about the cost of delivering a public health system that is best placed to meet the health needs of the population. In order to determine the level of funding required to deliver a public health system that meets the needs of the population, it is first necessary to gain a detailed understanding of: what those needs are, the services that are available (both within NSW Health and from other providers) to meet those needs, and what (if any) additional services are needed. That analysis is best performed as part of the system wide planning process that must now be undertaken.
A budget process that does not enable executives or Board members of an LHD (some of whom had extensive business and accounting experience) to readily understand how the budget has been prepared is a process that demands immediate improvement. LHD Board members are offered modest renumeration for the responsibilities they have. An LHD Board cannot discharge its functions unless given a budget that is capable of being readily understood. They should not have to reengineer it to be able to understand it.
Within some parts of the system, the funding available is (at least currently) insufficient. For example: a. the funding available to many of the LHDs and AHOs does not enable them to deliver the services necessary to meet the needs of their populations, and maintain infrastructure; b. LHDs have experienced significant budgetary challenges when opening and operating new facilities in circumstances where the ongoing funding made available to them does not meet the cost of doing so and; c. Justice Health does not presently attract the level of funding it requires to meet the demand for its services, with “patients waiting longer than clinically recommended, across all services waitlists”.
Further, there is under-resourcing or underfunding (including by the Commonwealth Government) in aspects of: a. primary care (including general practice services and allied health); b. mental health services; c. community health services; d. aged care; e. dental services; f. paediatric services; g. preventive health services; and h. health services for First Nations people.
Ultimately, the funding model should not be “the tail that wags the dog”. Rather, the funding models that are adopted by the Government to fund the NSW public health system, and by the Ministry of Health to fund the public health organisations (and the system more widely), should be those that best support the delivery of the public health system that the Government (through NSW Health) aspires to provide. A central problem with the provision of health services in NSW is the funding divide between it and the Commonwealth.
There is a series of “Long Term Reforms” in the Addendum to the NHRA. The Commonwealth Government – the polity with the most financial power in Australia’s federated system – has not shown any great inclination to act on these reforms, or to (sufficiently) fund them.
The Addendum to the NHRA will not achieve its aims unless the State and the Commonwealth Governments can sit down and agree on a funding envelope so that the states, including NSW, are adequately funded to provide health services when and where they are needed that are aimed at reducing rates of chronic disease (including early intervention) as well as having people “age well”.
Having identified, through a system wide planning process of that kind, the health system that the NSW government (through NSW Health) aspires to deliver to the people of NSW, the Ministry of Health should – with expert guidance – reformulate its approach to funding so as to devise a funding structure that will ensure that the LHDs and SHNs are sufficiently resourced to deliver that system. That will inevitably include blended, bundled, or other funding mechanisms.
Services provided by NSW Ambulance have changed over time. Many health services now provided by NSW Ambulance are aimed at (and achieve the goal of) keeping people out of the hospital system and Emergency Departments if there is an appropriate alternative. Between 25 to 30 per cent of “incidents” addressed by NSW Ambulance now do not result in transport to a hospital.
While NSW Ambulance now routinely adopts this as its approach, its budget still has its origins in its prior role of being “ambulatory first aid.” To that historical budget, growth including from “ad hoc political announcements” has been applied. What has not been done, however, is a comprehensive analysis of the services the modern NSW Ambulance and its staff provide, with funding based on that reality. That should now occur.
Procurement: Chapter 20
Delivering the highest value healthcare for the money expended should be a priority in any procurement process – a concept that is sometimes described as “value based healthcare”. As NSW Health rightly submitted, the concept of “value for money” is broader than “value based healthcare”. Accordingly, it must be remembered in any consideration of NSW Health’s approach to procurement that, in the wider government context, a range of criteria beyond monetary value must be incorporated into procurement plans and tender evaluation processes.
The concept of “value” in healthcare should involve a consideration of value not just to an individual patient and those with a direct stake in their care, but to other stakeholders in the system including clinicians and the broader community.
The principal object of centralised procurement should be to ensure that NSW Health achieves the best value for money spent. Only through careful modelling will it be possible for HealthShare to determine which arrangement will deliver greatest value to the entire system. If that arrangement results in rural and remote LHDs paying more for a particular item, or incurring significant freight costs in having goods delivered from a centralised warehouse, it may be that equity can only be achieved through adjustments to the funding provided to those LHDs, rather than seeking to equalise pricing through procurement in a manner that risks system wide value.
Complexity is inevitable in a system of the size and scope of NSW Health, particularly when that occurs within a government context that introduces a range of legislative and NSW Government requirements. NSW Health has ongoing procurement reforms. There are undoubted benefits in NSW Health continuing to: a. consolidate its procurement policies, processes and systems where practicable; b. provide clear, practical guidance to staff at all levels of the system (and not just procurement staff) to the steps they need to take to procure different kinds of goods and services; and c. ensure that assistance is readily available if staff experience difficulties.
Innovation: Chapter 21
While a more robust approach to what might be considered to be significant and “game changing” innovations is both necessary and appropriate, there is also a need to adopt a similarly thorough approach to the identification, assessment, prioritisation, and implementation of innovations that target the current burden of disease and public health issues and trends that are prevalent within the community.
There is a risk that ground breaking innovations that, by their nature, will benefit a smaller patient cohort may receive disproportionate attention and support compared to those with the potential to enhance health outcomes for more of the population, thereby yielding greater overall economic benefits and improving the health of many more people. That is not to say that innovations that are likely to benefit smaller patient cohorts are not important and should not be pursued.
There are limitations in current funding models and approaches that impact on efforts to drive and implement innovations across the system. For example, it has been suggested that activity based funding (ABF) can limit the capacity for local innovation that may produce wider system benefits if pursued. There may also be concerns that adopting a new model will have a negative financial impact in an ABF context because it will result in reduced activity and, therefore, will generate lesser reimbursement.
Those limitations in current funding models sit in a context where, unlike some other jurisdictions, NSW does not have an “innovation fund” (or something similar) that is capable of being drawn upon to support innovation across the system. Innovation and research are, in general terms, insufficiently supported. An example of such a fund is the $2 billion fund that was established in 2020 by the Victorian Government to stimulate industry investment in life sciences.
Unless enough resources are committed to embed implementation of innovation into the system, it is unlikely the benefits will be sustained. That is because change in clinician behaviour and for the relevant processes to be integrated and become business as usual takes time. As a consequence, the ACI takes a cautious approach to the number of initiatives it rolls out Statewide at any one time. That can result in some promising programs not being scaled for wider application due to the time that it will take to implement them, particularly in circumstances where a LHD does not see a particular innovation as a priority for their population.
