Objectives of the National Health Reform Agreement

National Health Reform Agreement (NHRA) is an agreement that specifies steps to enhance the clarity, governance and funding of the health care system of Australia. In addition, by implementing the stipulations of the agreement, the states and territories lowered their centralized health administrations and decentralized financing, planning and provision responsibilities to local level. (NSW, 2012) Government of Australia has given an assurance of $16.4 billion of extra financing for public hospitals for 2014-2015 and 2019-2020. NHRA has also pledged to enhance its role to effective growth financing for hospitals to 45% in 2014-2015, raising to 50% from 2017-2018. The NHRA lays down that the all the parties involved are collaboratively in charge for offering activity-based funding or block funding to the public hospitals  (CFFR).  Activity-based funding is based on the amount and charges of the services offered to the service users. Block funding is offered for educational and research purposes ( NHFB, 2016). NHRA will develop a collaboration between Commonwealth, and the states and territories. It acknowledges that the duty for the supervision of public hospitals is of the states and territories. NHRA further ensures effective costs and improving the patient access to accomplish the sustainability and transparency of public hospitals’ financing, along with their responsibility and approach to requirements of the local communities. So it be said that NHRA works on improving the performance of public hospitals in Australia to gain better health outcomes. This report will discu ( NHFB, 2016)ss the NHRA along with focus on the Aged Care reform. It will also provide a critical analysis of the NHRA and based on the analysis certain recommendations to improve the reform are also proposed.

The objectives of the NHRA include increasing the quality of the performance reporting by establishing the National Health Performance Authority and improving the accountability by the Performance and Accountability Framework. The Framework supports the improvement of local level performance assessment to contribute towards the attainment of the objectives. The fundamental objective of the Agreement is to induce a safe, high quality Australian health system, by improving on the aspects of transparency and accountability. The Agreement will be based on three different domains – equity, effectiveness and efficiency of service delivery in health care system. The parties who signed the Agreement are focused in offering coordinated care reforms particularly for service users with chronic and complex conditions as this is the basis of a strong and sustainable health system. Apart from that flexibility and sustainability are also the driving factors (Lost about health-care reform? Here’s where we got to in 2011, 2011).

NHRA came into being after an autonomous inquiry of a year and a half into the health system, a Prime Ministerial listening tour of the hospitals throughout Australia, numerous fraught Council of Australian Governments (COAG) meetings and an ineffective effort. After the series of events the federal Labor Government was eventually able to make a health reform deal with all states and territories in the form of NHRA.

The integrated approach of funding was also applicable for primary health care which is mostly provided by General Practitioners. Private health insurance were accountable for primary health care and private hospital services and, to a certain scope for public hospitals as well. Over time, the Government of Australia is to have the most of the financing and policy accountability for aged care system, including the Home and Community Care program, in every state and territory except Victoria and Western Australia. It can be concluded that NHRA supports in provision of improved access to services (Wiese, Jolley, Baum, Freeman, & Kidd, 2011), urges improved effectiveness enhanced the local accountability and transparency, improved responsiveness to local communities and a more robust funding structure for the aged care service in the future. In addition, it increased public information to facilitate comparison of health service delivery (Shannon, Holden, & Dam, 2012).

Critical Analysis

Several commentators suggested that the extent of reform has been scaled back over time. Also, the reforms overviewed in the NHRA are less detailed than those outlined in the National Health and Hospitals Network (NHHN) Agreement (2010). Western Australia refused to sign up the NHHN agreement because of the contentious suggestion to keep hold of GST from the states in order to fund reforms so it was removed from the NHRA. It is also believed by some health policy experts that NHRA had narrower scope. They viewed it as a reform bundle in financing terms instead of a system terms which was regarded as a huge weakness of the reform. It was particularly criticized for this as major portions of the Agreement were dedicated to public hospital funding and specifically in describing that how the Commonwealth will shift from block funding to an ABF system. Further the engagement in ABF was also not new as COAG first dedicated to ABF in 2008. However, the details regarding how ABF will work in practice was new in NHRA (Boxall, 2011).

However, the NHRA has various strengths. In absence of NHRA, the budget of state and territory governments would have been exhausted by their increasing health expense duties and their capability to offer several services would have been substantially constrained. Further, NHRA offers substantial detail regarding the manner in which funding will flow between the Commonwealth, state and territory governments and Local Hospital Networks (LHNs). The fundamental purpose of NHRA is to make the flow of finances at both levels of governments to LHNs more transparent, so that blame game could be prevented or reduced in the healthcare system.

NHRA also gives some added specifications on the new governance and performance evaluation provisions. For example, it was outlined that the National Health Performance Authority (NHPA) will maintain the MyHopsitals website which was then managed by the Australian Institute of Health and Welfare (AIHW), and will compare performance data for LHNs and Medicare Locals to recognize best practice. Principles for data sharing between various institutions and Governments was also laid down in the agreement because it was regarded as a deficit in the system. NHRA further stipulated the principles for data exchange between levels of government and groups. Moreover, it obligated the governments to develop a more official process of data exchange.

The reform also stated the modifications in governance of public hospitals at local level. A significant change outlined was that the LHNs will have separate bank accounts and receive Commonwealth funds directly from the National Health Funding Pool. It confirmed that they had greater funding assurance and more flexibility in budgeting than they had prior to the implementation of the agreement. But since the state government is still the biggest funder, so it can move its funds between LHNs according to the needs of the current scenario (Dixit & Sambasivan, 2018).

After establishment of the national governance organizations and a performance and evaluation framework, the Commonwealth recommended to be more active in ensuring that the healthcare providers offer improved delivery of services. However, the function of Commonwealth is still limited to monitoring and encouraging the care providers which include the states, Medicare Locals and private hospitals to accomplish the set performance standards as the Commonwealth itself does not provide hospital services. When the formal process was established, both the levels of government were able to work on the crucial aspects of health care system. As in Australia the healthcare services is a shared responsibility among the Commonwealth and the states, an agreement and understanding between the two levels of governments is essential. The NHRA is a reform which facilitates cooperation and understanding, it has chances of providing long-term benefits.

After critically analyzing the reform several recommendations are suggested to reinforce this agreement. NHRA must link the care adherence systems with quality systems more thoroughly in order to improve the services. A mandate must be build regarding the data collection of performance and quality of care services routinely. The data gathered through the routine collection must be evaluated and made available to public to assist the clients so they can make informed choices in regards to the services they are seeking. The public accessibility of the data will further help in driving service competition and quality improvement. The official website must also publish the Quality indicators that should comprise of relevant information to support informed decision-making about different aspects of healthcare services. Moreover, the satisfaction of the clients should be analyzed by conducting surveys and other evaluation processes. There is a need of strengthening the compliance and complaints procedures to ensure that the clients and their carers can convey their issues without fear of retribution and a belief of resolution. The care services standards must include partnership with the clients so that they are assisted to be engaged in quality improvement. A reliable, strategic and integrated national approach to care education and training is needed which should include minimum standards for education and training for those involved in working with the clients (Bartlett, Butler, & Haines, 2016).  (Giles, Halbert, Gray, Cameron, & Crotty, 2009). This approach should focus on leadership and cultural alterations at administrative level, to increase opportunities to translate the learning into improved practice. The attempts of improvements must be supported by government and by the health care sector, and emphasize on accomplishing sustainable changes to practice which result in better outcomes for the population.

Conclusion:

The National Health Reform Agreement is a national agreement developed to enhance the transparency, governance and funding of the health care system of Australia. To strengthen the sustainability of the public health system of Australia, the Commonwealth and all the states and territories signed the NHRA for funding and management provisions of public hospitals in 2011. As per the agreement the Commonwealth funds half the efficient cost of offering public hospital services. NHRA invested an added $19.8 billion in public hospital services during 2010-2020 to ensure that all patients receive improved quality of acre and the local communities are given focus in the provision of local services and reinforce the primary health care services by development of Medicare Locals. NHRA is better than previous agreements as it provides more emphasis on even sharing of responsibility for the financing of the growth in costs of public hospital services in future. NHRA offered more transparent and simpler funding for public hospital services, on the basis of effective price of offering those services. The aged care reform supports in provision of improved access to services, urges improved effectiveness enhanced the local accountability and transparency, improved responsiveness to local communities and a more robust funding structure for the aged care service in the future. In addition, it increased public information to facilitate comparison of health service delivery.

References:

NHFB. (2016). National health reform payment and funding flows. Retrieved from https://www.nhfb.gov.au/health-reform/health-reform-payment-flows/

Bartlett, C., Butler, S., & Haines, L. (2016, May 2). Reimagining health reform in Australia: Taking a systems approach to health and wellness. Retrieved from https://www.strategyand.pwc.com/au/report/health-reform-australia

Boxall, A.-m. (2011, August 4). National Health Reform Agreement: what might it achieve? Retrieved from Parliament of Australia: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/FlagPost/2011/August/National_Health_Reform_Agreement_what_might_it_achieve

CFFR. (n.d.). National Health Reform Agreement. Council of Federal Financial Relations. Retrieved October 30, 2018, from https://www.federalfinancialrelations.gov.au/content/npa/health/_archive/national-agreement.pdf

Dixit, S. K., & Sambasivan, M. (2018). A review of the Australian healthcare system: A policy perspective. SAGE Open Med., 6.

Donato, R., & Segal, L. (2010). The economics of primary healthcare reform in Australia – towards single fundholding through development of primary care organisations. Aust N Z J Public Health, 34(6), 613-9.

Giles, Halbert, Gray, Cameron, & Crotty. (2009). The distribution of health services for older people in Australia: where does transition care fit? Aust Health Rev., 33(4), 572-82.

Lost about health-care reform? Here’s where we got to in 2011. (2011, December 19). Retrieved from The Conversation: https://theconversation.com/lost-about-health-care-reform-heres-where-we-got-to-in-2011-2997

NSW. (2012). National Health Reform Public Hospital Funding. NSW.

Shannon, E., Holden, J., & Dam, P. V. (2012). Implementing National Health Reform –Is Organisational Culture the Key? APSA.

Wiese, M., Jolley, G., Baum, F., Freeman, T., & Kidd, M. (2011). Australia’s systems of primary healthcare – the need for improved coordination and implications for Medicare Locals. Aust Fam Physician, 40(12), 995-9.