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Deal to Improve Care, Transparency

An AUS$19.8 billion health care deal between the Australian federal government and state/territorial governments will improve services, reduce red tape, and deliver “unprecedented transparency” on health care, according to Prime Minister Julia Gillard. The deal was struck during a meeting of the Council of Australian Governments (COAG) last February.

The agreement will give states and territories AUS$16.4 billion in extra hospital funding, as well as AUS$3.4 billion for emergency department upgrades, elective surgery, and 1,300 subacute hospital beds in the next four years. In return, the states and territories have pledged to deliver reforms, including meeting new national standards regarding a four-hour wait time maximum for emergency departments; ensuring that 95 percent of all patients waiting for elective surgery will be treated within clinically recommended times; increasing control of hospitals to the local communities and clinicians; and providing more transparency through reporting.

The new agreement will also eventually establish a 50–50 partnership between the federal and state/territorial governments on all new hospital growth funding. The federal and state/territorial governments will each contribute their share of funds into a national pool where each state and territory will have its own account. The funding pool will allow for complete transparency on how states and territories perform and help identify inefficiencies. This national pool, to be operating by July 2012, will be administered by an independent body.

With this reform, the majority of states and territories will no longer be given block grants for hospital funding from the federal government. Instead, hospitals will be paid per activity, and prices will be set by an Independent Hospital Pricing Authority. The Gillard government hopes that these initiatives will help to identify top performing hospitals, as well as underperformers.


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