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Hand hospitals, GP over to the states: OECD

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The states and territories would assume exclusive responsibility for hospitals and primary care while the Commonwealth would steer policy and funding and oversee quality and performance under a far-reaching shake-up of the health system proposed by an international review.

As the states warn of the devastating effects of Federal Government cutbacks to hospital spending, the Organisation for Economic Cooperation and Development has recommended an end to the complex and confusing split of responsibility for health care between the two levels of government.

In its annual Health Care Quality Review of Australia, the OECD said that although the nation’s health system achieves good health outcomes for the amount of funding it receives – the sixth longest life expectancy among rich countries with only average health expenditure – the country could do better if it simplified lines of responsibility and boosted the role of GPs.

“Australia achieves good health outcomes relatively efficiently, with health expenditure at 8.8 per cent of GDP, about the same as the OECD average,” the Review said. “[But] the health system features a complex split of federal and state and territory funding and responsibilities which can make it difficult for patients to navigate their way through.”

Under current fragmented and nonsensical arrangements, both levels of government carry responsibility for overseeing health care quality, the OECD found.

But, within this, states are given the lead role as hospital “system managers” while the Commonwealth retains prime responsibility for primary health care.

It said arrangements for supervising private care were just as labyrinthine, with the states carrying responsibility for licensing private hospitals while health funds were regulated by the Federal Government.

“Better rationalised responsibilities, by making states and territories responsible for primary care, for example, would help ease some of the system’s complexity, as well as the tension that sometimes exists between the two levels of government,” the review said.

Related: Public hospitals stretched by rising demand

For decades the nation’s public hospitals have been caught up in outbreaks of the “blame game” between the Commonwealth and the –states over funding, and medical students battling for limited intern places are the latest victims of the blurred lines of responsibility.

The OECD said the states should assume responsibility for hospitals and primary health, leaving the Commonwealth to oversee quality and performance.

The OECD said it made sense for the Federal Government to play the lead role in steering health policy and overseeing quality and performance, noting the work of agencies like the Australian Commission on Safety and Quality in Health Care and the Independent Hospital Pricing Authority.

It said Australia also stood out among its peers for having a consolidated national registration scheme for practitioners.

“Greater harmonisation of quality monitoring and improvement approaches would make the states more comparable, providing opportunities for health services to be benchmarked against a larger pool of peers, and to draw lessons that could help improve health care quality,” the OECD said.

The Organisation said quality could be further enhanced by strengthening primary health care, particularly given the growing number of patients with chronic health problems.

It said an “unusual division” had developed between primary care and community health, adding to the fragmentation of the system, while the slow adoption of e-health made it difficult to coordinate care among different providers.

The OECD also took aim at fee-for-service payment model, which it said did little to promote the integration of care, and decried that the Practice Incentive Program, as a pay-for-performance scheme, remained largely under-developed.

“[It] consists of few incentives that are tied to quality and patient outcomes,” the Organisation said, and expressed surprise at the lack of data collected on primary health care quality and outcomes: “[this] provides general practitioners with very limited opportunity to compare their performance with that of their peers”.

Adrian Rollins

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