Coalition of the willing


Breaking the Commonwealth/State Impasse in Health: A Coalition of the Willing

A Joint Commonwealth/State Health Commission (Joint Health Commission)

A State handover of health services to the Commonwealth as suggested by Tony Abbott would in my view be the best way to overcome the waste and buck-passing between the Commonwealth and State governments. Another option would be a joint national Commonwealth/State health commission. Both approaches would require the agreement of the Commonwealth and all the States.

But if these are not achievable because of ideology or political opportunism, a practical and feasible alternative, which I suggest, would be to establish a Joint Commonwealth/State Health Commission (Joint Health Commission) in any State where the Commonwealth and a State government can agree “ a coalition of the willing. I envisage that the joint commission with shared governance would be responsible for the funding and planning of all health services in that State. Consistent with an agreed plan, the Commission would then buy health services from existing providers “ Commonwealth, State, local, NGO and private.

A political agreement between the Commonwealth and any State is essential. If this political agreement is achieved, I am confident that we would see a more cohesive and integrated health service, delivered much more efficiently. Once the benefit was clear in one State I am sure other States would follow.

I think this proposal is feasible and would have strong public support. Either the Commonwealth government or a State government could initiate the breaking of the impasse.

The Commonwealth Government provides 47% of national health funding and the State Governments 23%. Another 30% of funding is from non-government sources.

In both the NSW and SA health reviews that I chaired, a view was widely expressed that ‘it’s all very well for the State government to review their health systems, but the major problem is the inefficiency, fragmentation, gaps, cost and blame shifting which results from the different roles of the Commonwealth and State governments in health’. This view was expressed, not only by those working in the health system, but also by the community generally. It was also frequently expressed by the media. The problem of divided responsibilities is well understood.

A solution requires a political agreement between the Commonwealth government and at least one State (or territory). The political issue cannot be avoided and attempts to get around this issue are likely to be unsuccessful, time-consuming and cumbersome. A bureaucratic or organisational response to a political problem will be unsatisfactory. The issue must be addressed politically. If there is political agreement, I do believe that the governance, financial, administrative and other issues could be successfully managed.

Such an approach would not produce a unified national health system, but six (excluding the territories for the moment) joint health systems which are State-based. But this would be superior to the present division and fragmentation. The six State-based joint commissions could also perhaps better reflect the different history and needs of different States. One size doesn’t necessarily fit all.

Let me describe my proposal to set up a Joint Health Commission in any State where the Commonwealth and the States could agree.

It would have the following characteristics.

1. Coverage of Joint Health Commission. The wider the coverage the better to ensure real and comprehensive resource allocation which facilitates the integration of services across the full continuum of care. The following programs should be included as the responsibility of the Joint Health Commission.
¢ State Health (including Health Care Agreement)
¢ Aged Care
¢ Department of Veterans’ Affairs (DVA)
¢ Home and Community Care (HACC)
¢ Commonwealth Regional Health Services in rural and remote areas.
¢ Medical Benefits Scheme (MBS)
¢ Pharmaceutical Benefit Scheme (PBS)
¢ Aboriginal Health
¢ Local Government health
¢ NGOs (eg nursing services)

I envisage that State health, HACC, etc. would tender for the provision of services to the Joint Health Commission. Similarly, local government and NGOs would tender, although allocations to them would probably need to be made through the State health department.

Private hospitals could probably be excluded from this coverage as they depend on private contributions rather than direct government funding, except for occasional seed money. But provision should be made that private hospitals could tender to supply services to Joint Health Commission, along with local government and NGOs “ see 3 below.

Importantly, existing providers would continue to operate and provide service but those services would be purchased by Joint Health Commission as part of a statewide plan, which I refer to under ‘functions’ below.

2. Pooled Funding of Joint Health Commission. The Joint Health Commission would receive a negotiated pooled allocation of funds from the Commonwealth and State governments, which reflected the coverage of programs for which it would be responsible (see 1 above) with appropriate population growth and cost indexation add-ons.

Whilst confidence in the funding formula is developed, it might be useful to consider shadow funding in the first 3 years and move to actual pooling of funds thereafter.

3. Functions of Joint Health Commission
a. Shared Resource Allocation through the purchase of various services from providers – Commonwealth, State and local government, and NGOs as part of a joint strategic plan.

¢ Shared resource allocation can then be achieved through the establishment of a minimum set of Commonwealth and State programs eg primary care services; aboriginal health services; home and community care services; hospital services and aged care services.
¢ Funding would be allocated with agreed short and long term integrated outcomes rather than program outcomes with specified standards and levels of performance.

b. Shared Performance Management
Oversee continuous improvement of the health system, monitor progress and establish reform targets and timelines:
¢ Development of standard measurement
¢ Benchmarking
¢ Patient centred best practices
The development of the National Health Performance Framework provides an excellent opportunity for the establishment of a system that can meet the needs of consumers, community and health services. The National Health Performance Framework provides a three-tiered approach that examines health status and outcomes, determinants of health as well as health system performance.

The performance framework should facilitate the mapping of progress for the population of a State, region or service. It could also be used to examine progress in tackling a particular health problem (eg aboriginal health), and to take a wider look at the interface between health and other government departments, the private sector and non-government organizations.

4. Joint Health Commission Governance. The following features could be included.
¢ Membership of the board should be high level to enable strategic decision-making.
¢ The board of directors must have clear ‘governance’ responsibility and not an advisory role. They should reflect the broad interests of the whole community and not be seen as representative of the Commonwealth or State or ‘insider interests’ that so dominate health systems in Australia.
¢ Independent chair appointed by the two Ministers from a short list provided by the respective CEOs. It might be useful to have the chair from another State.
¢ Apart from the chair, no jurisdiction to have more than 50% representation.
¢ Representation could include other Commonwealth and State jurisdictions (eg Education) and people having knowledge of the private sector.
¢ The board would appoint the CEO who would be responsible to the board and not the two jurisdictions.
¢ The board would approve the strategic plan and budget.
¢ A constitution may be useful to provide more user-friendly objects, role, function and operating procedures, including engaging the private sector.
¢ Board should have a small secretariat, but rely on Joint Health Commission for planning etc. Avoid a new level of bureaucracy.
¢ Board costs would be shared by Commonwealth and State.
¢ Commonwealth and State ministers would be responsible for negotiating high-level policy principles, including overall funding on the advice of the board. This would help reduce the risk of the board dividing on Commonwealth/State lines. Ministers must reach broad agreement if the Joint Health Commission is to work.
¢ The board should be responsible to Commonwealth and State ministers, with one financial report to both.


I believe that a Joint Health Commission that is established in any State where the Commonwealth and the State agree would be a substantial improvement on the present arrangements. It requires a political decision. I sense that the public is tired of the blame shifting and fragmentation in health and would respond to a sea change such as this. If John Howard or Mark Latham offered to establish such a joint health commission in any State that agreed, they would achieve what both of them are seeking in health “ a better health system, a favourable community response, and differentiation in health policy.

A Joint Health Commission in any one State could begin to address the ‘big ticket’ problems in health delivery – the Commonwealth/State fragmentation, an antiquated workforce structure, obvious system failures in safety and quality and the most basic of all, the lack of effective governance in our hospitals.

All these big-ticket issues are lost sight of in the argy bargy of Commonwealth/State blame and cost shifting.

Not only would a Joint Health Commission in one State be a substantial improvement. It would also be very symbolic, demonstrating that governments can address hard political issues in a cooperative way.

We must stop tweaking the dollars only, when the real problems are structural. A lot of health spending is counter-productive – throwing money at problems to get them out of the media or for short-term political gain, rather than solving systemic problems. Any increase in health dollars must be accompanied by system change. A Joint Health Commission starting in one State is the way to start breaking the impasse.

This paper first appeared in New Matilda’s Policy Think Tank section.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.