The Australian Public Service Commission 'Capability Review of the Department of Health and Aged Care' notes that
In 2023–24, the department will administer 20 programs across 4 outcomes. Administered funding totals $103.3 billion, mainly payments for personal benefits of $65.1 billion (63% of the total), including those for medical services, pharmaceutical services, and private health insurance rebates. Subsidies, predominantly for aged care, amount to $20.9 billion (20% of the total). Grants expenditure is expected to be $14.0 billion (14% of the total), most paid to not-for-profit organisations. The department also provides shared services to 17 portfolio agencies.
More than 5,800 people work at the department in 8 different worksites around Australia. Roles span 17 job families including: policy; project and program management; regulation and compliance; science and engineering; data, research and analysis; administration and information and communication technology. The department has been increasing its representation across Australia – at the end of April 2023, 22% of the department’s APS staff worked outside Canberra from offices in all capital cities and some regional locations. ...
The most critical challenges were identified as the following:
• Meeting the challenge of growing demand for aged care with an ageing population, while making the improvements in quality recommended by the Aged Care Royal Commission. The challenge is further compounded by increasing workforce shortages, considering disability care and other social care workforces also face shortages, and the interface between the aged care system and the hospital system. An integrated policy solution that considers the broader system dynamics will be needed to deal with this challenge.
• Addressing the challenges across the health workforce – particularly primary care and in rural settings. This is unlikely to be resolved simply by increasing numbers, given the declining percentage of medical graduates wanting to work in primary care. It will require rethinking and changing the roles played by the different elements of the health workforce including allied health.
• Addressing the growing cost of hospital care, which is a large and growing share of state budgets. Addressing this will require collaboration between the Australian, state and territory governments to optimise the use of hospitals and primary care.
• Increasing the focus on preventive health care. It is possible to prevent many chronic conditions from developing, or to reduce their impact, by creating systems and environments that support people to live a healthy lifestyle. This is important given the growing cost of acute care, the need to address inequities between different population groups and the need to improve the sustainability of the health system.
• Being on the front foot in terms of opportunities in the rise of personalised medicine, mRNA technology, digital technologies, the promise of artificial intelligence and the revolution in genomics, while being mindful of the significant cost implications.
• Preparing for global mega-trends, such as those outlined by the CSIRO report, Our Future World, including adapting to climate change and the expectation of increased unprecedented weather events; supply chain disruptions; geopolitical shifts characterised by disrupted patterns of global trade, geopolitical tensions and growing investment in defence; and a strong consumer and citizen push for decision makers to consider trust, transparency, fairness and environmental and social governance
• Managing the continued shift in the mix from acute care to chronic disease management, particularly as the population ages.
• Being prepared for the next pandemic, which may be worse than COVID-19, and ensuring the department is ‘battle ready’.
The APSC's appraisal is unduly positive, quuoting endorsements by unidentified stakeholders but erasing substantive criticism of for example the TGA.
The Review articulates '9 priority areas for capability improvement':
Integrated strategic policy development capabilities
A core challenge for Australian society over the next 4 years is providing effective and affordable health and aged care. An ageing population, more chronic rather than acute diseases and growing mental health challenges are set against increasing workforce shortages across the health, aged and disability sectors. This is creating significant challenges for access to quality affordable care. Meanwhile great strides in medical technology are creating significant opportunities for improved health outcomes.
Continuous improvement is not going to provide sufficient solutions for these challenges. Over the next 4-plus years, significant reform is needed across the health and aged care sectors, taking account of interactions between the sectors. For example, there is a clear need to move more patients from higher-cost acute and hospital settings into primary and community care or aged care settings. But that requires policy development to address the interactions across the whole health and aged care system. Such reforms will not be possible without collaboration between the Australian, state and territory governments.
Nearly everyone this review spoke to expect the department to take a lead in providing a ‘direction of travel’ on major system reform of the health and aged care sectors, and to lead discussions about the detail of that reform. However, stakeholders from across the Australian Government and from outside the government told the review that the department has not been consistently playing a leading role here for many years. There have been notable exceptions, such as the department’s leadership of the National Medical Workforce Strategy, the Primary Care Reform Strategy and the reforms coming out of the Aged Care Royal Commission, but broad whole- of-system reform initiatives have been limited. In part this is because, despite strong policy capabilities in particular areas, there is lack of capability in integrated policy development addressing the interactions between the various parts of the health and aged care systems. The department is not seen to have put forward systemic reform options to government or lead this discussion with the states, territories and other stakeholders.
This may be because previous ministers have not asked the department for this advice, and capability in this area may have declined. However, the department should maintain system reform policy capabilities regardless of the needs of the minister of the day.
The department is implementing major reforms, including the response to the Aged Care Royal Commission and Strengthening Medicare Taskforce. But with Australian Government costs of more than $100 billion per year in the health system, more work is needed to integrate policy and on-the-ground delivery of these important commitments.
This is an area that will require sustained focus and investment over the coming years. To embed such a capability, the department could commit to producing a periodic report on the current state of the health sector and future direction of travel, along the lines of Treasury’s intergenerational report.
Using data to inform policy
The review heard a range of views on the department’s data capabilities. While the department was broadly viewed as having highly capable data scientists and analysts, many stakeholders said this capability was not being fully used, in some cases through a lack of willingness to engage in risk.
The department has used a mixed model for data analysis, relying on both in-house capability and specialist firms to complement its abilities in areas such as Medicare and pharmaceutical regulation and compliance. Through the pandemic, the department relied heavily on data consultants to assist in modelling pandemic outcomes, successfully supplementing its own capabilities.
The review heard of close collaboration with both the Australian Bureau of Statistics and the Australian Institute of Health and Welfare on data tools and modelling to support long-term health and aged care policy analysis. We also heard that the department had invested in tools to allow policy analysts throughout the organisation to perform independent analysis of linked data sets.
However, the use of data is not yet embedded throughout the department, and key program and delivery areas, such as the Primary Health Networks (PHN), do not yet have data-driven metrics to support performance monitoring, or to assist in future policy development and design. Looking forward, the department needs to empower policy makers at various levels to improve their understanding of the availability, flaws and possibilities of data sources plus an ability to pose answerable questions, and then to use the answers to frame policy proposals and options. This will enable staff to appropriately explain clearly and succinctly to ministers, advisors and other stakeholders.
Systemic consideration of the health and aged care workforce
A range of stakeholders told the review team that the department needs to take a greater national leadership role in coming years in health and aged care workforce policy, as this is one of the most pressing challenges across the sector and will remain so for many years to come.
The health workforce is perhaps the largest input to the health and aged care system. It is used at all levels and in all settings of health and aged care service delivery. It can be put to uses with greater or lesser degrees of efficiency, quality and safety in health service delivery, depending on policy structures established at all levels of government and through private providers. The health workforce is trained, regulated and governed at clinical levels via all levels of government, the education sector and professional colleges.
Health Workforce Australia previously provided national leadership in this area and, following its closure, the department has attempted, with variable success, to provide the comprehensive data collection, analysis and planning that Health Workforce Australia provided. Despite successes with the National Medical Workforce strategy, medical workforce data collection and early initiatives in the nursing workforce area, the review team has heard stakeholders seeking much greater leadership from the department to support:
• changed models of care, with greater reliance on team-based care
• better models to prioritise where and how the clinical workforce is trained
• models of care that account for a potential gap between supply and demand for health workers with greater use of lower skilled workers, greater use of technologies, or both.
Parts of the workforce can move between the primary, hospital, aged care and National Disability Insurance Scheme sectors, so it is difficult to develop policy for one sector without considering the implications for the other sectors. Current health and aged care workforce capabilities are scattered across the department, and it should consider how capabilities can best be organised to give integrated policy advice.
Increased knowledge about the providers the department funds and regulates
A common theme from many external stakeholders is that the department needs to develop a deeper commercial understanding of the providers it funds and regulates.
These providers include hospitals, aged care homes, general practitioners, medical specialists and allied health practitioners. The knowledge required includes the economics of the businesses, the distribution curve of providers in terms of performance, and the impact of funding or regulatory changes on the sector. Without that knowledge, the department is seen by many to be susceptible to place too much weight on the loudest voices in discussions and negotiations, when they often represent the views of less sophisticated providers or practitioners rather than the average or more sophisticated providers.
The department has access to much data and expertise about the economics of providers but many stakeholder discussions suggest it does not seem to be making full use of this data and expertise.
Through effective use of data and access to expertise, the department should know the economics of the entities it funds or regulates at least as well as the entities themselves.
Readiness for future healthcare delivery
The rapid pace of technological change, including in areas such as personalised medicine, and the use of artificial intelligence in diagnosis and treatment for patients, will present a challenge for health system funders and regulators globally in coming years. The review team heard that it can be difficult to work across some divisional and group structures within the department, and that sometimes inflexible internal resourcing models don’t support meeting internal priorities.
For example, the TGA’s cost recovery is more than 90% from industry. Having limited flexibility for non-cost recovery activities, including forward-looking work, means it is more constrained than most international peers. This is seen in in its ability for technical experts to scan the horizon for therapeutics regulation issues and support joined-up policy efforts that consider future health care delivery models that incorporate technological change.
There are also opportunities to leverage existing and growing capabilities to better tackle future technology changes. We observe that the department has received significant funding to reform the way information in the aged care sector is collected and provided. The platform being developed for this purpose also has possible wider application in a range of other care markets funded and supported by the Commonwealth, such as veterans’ affairs and the National Disability Insurance Agency.
Ensuring readiness for future models of health care service delivery and treatment requires concerted and ongoing effort to yield best results for the health system and, through it, improved health outcomes for the public.
Learning the lessons from COVID-19
The COVID-19 response has been a major focus of the department over the last 3 years. The department has been in the front line of both developing policy to respond to the pandemic and delivering many aspects of that response. The speed with which the department had to work has led to many innovations and taken the department into new areas of activity such as vaccine delivery.
The department had to innovate in:
• the way it works with front line organisations such as Aboriginal Community Controlled Health Organisations with more flexible funding and less detailed accountability requirements
• how it communicates with diverse communities to ensure messages about COVID-19 are getting through
• the way areas work across the department and with other Commonwealth, state and territory agencies, as this had changed substantially to deal with the response.
There are important lessons from this experience about what has worked well, what hasn’t worked so well, and what should be done differently to be ready for the next pandemic.
However, there does not yet appear to have been any comprehensive review of lessons learned. The department is keen and prepared to undertake such a review. There is clearly the question of when the time is right for such a review, as COVID-19 is not totally gone, but if left too long, organisational memory will start to dissipate as people move to different roles and other priorities take over. To ensure the department fully extracts the lessons from the COVID-19 response, we think it is important that a thorough and significant review occurs ideally sometime in the next 12 months.
Collaborative and enduring relationships with the states and territories
Effective delivery of health and aged care to the community relies on the Commonwealth, states and territories, and the private and community sectors working together. Many stakeholders, not just the jurisdictions, raised the need for the department to work more closely and collaboratively and in a less ‘transactional’ way with state and territory counterparts.
Jurisdictions and other stakeholders appear to be looking for a high-level, medium- and long-term policy discussion about the future of the health and aged care systems. Health care consumes around 40% of state budgets and current trajectories suggest it is rising over time. It is no surprise that the jurisdictions want a continuing, in-depth discussion with the department about the future of health and aged care.
The review team notes the challenge for senior staff to find time, space and resources for content-rich, evidence- based engagement with jurisdictions. The authorising environment for such forward thinking waxes and wanes. However, as the level of government responsible for most health care financing and for health settings that require close integration with jurisdiction-based services, the department should lead a more open and less transactional engagement with the jurisdictions on health and hospital system design, and an enduring architecture to facilitate this.
We note that the department has a team allocated to addressing these issues. We also recognise that reform discussions are often intertwined with requests for more funding, and that there are constraints on the department’s ability to fund reform. However, we do not think that this negates the need to create more collaborative relationships with the states and territories.
Improved communication and engagement with the community
During COVID-19, Australians relied on heath messages provided by senior department staff. Those senior staff were supported by an extensive communications and engagement effort across the department and into Australia’s multi-faceted community. Much was learnt and staff are proud of their efforts at a time of national and personal challenge.
Improving communication and engagement with the community is an important area for departmental capability development. In the past, mass media campaigns were a key tool for the department to spread health messages. The experience with COVID-19 has highlighted shortcomings with this approach and pointed to the need for new thinking and new skills in the department. Many of those with complex (and potentially expensive) health and care needs do not receive information through traditional media.
Indeed, the department needs to reach some people who distrust government and are wary of government messages urging them to participate in programs or use services. Communicating with such communities requires long-term engagement, detailed data and analytics, and a willingness to use influential community members backed by social media to provide information and receive feedback.
Creating the capability to reach all parts of the Australian community will require a lift in the department’s approach to engagement with communities and their representative organisations, as well a more contemporary approach to communications.
Building and empowering the mid-level of the department
The review team often heard praise for the knowledge, commitment and ability of the department’s most senior staff (the executive and division heads). However, feedback on mid-level leaders (branch heads, directors and team leaders) was more mixed – with many stakeholders arguing that turnover in these levels created challenges for organisational engagement and potential for decisions to be escalated to higher levels when they could be managed more appropriately at lower levels.
All Commonwealth departments face workforce challenges and we were not surprised to receive such feedback. The department has taken steps to address turnover and, through enhanced workforce planning, is supporting a leading work from home policy, improving working conditions in offices, and raising the profile and approachability of senior managers. However, there is still a lot of movement at the mid-level of the department, partly driven by many of the most talented staff moving frequently between roles.
The department should invest in both the business systems and learning and development to support greater delegation to these levels. We heard there is latent capacity in these levels that will leave if left untapped. There is a wide palette of strategies to build the mid-level of the organisation while improving succession planning, particularly at the local level, and creating more stability and/or better handovers when mid-level managers move.
