Improving Public Hospital Accountability And Governance, Australia

Main Category: Public Health
Article Date: 03 Oct 2007 - 9:00 PDT

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As part of negotiating the next Australian Health Care Agreements with the states, the Howard Government will insist on significant changes to the governance of public hospitals as a condition of Commonwealth provision of about 40 per cent of public hospital funding.

Over the life of the current Australian Health Care Agreements, the Commonwealth Government provides $43 billion towards public hospital services but has no say whatsoever as to how public hospitals are run.

A re-elected Howard Government will insist upon the establishment of local public hospital boards with real authority to appoint the CEO of the hospital. The CEO will be accountable to the Board. The Board and the CEO will have control over the hospital budget and the board and the CEO will make decisions about what happens in that hospital.

The Boards will have significant clinician representation from doctors and nurses and other health staff at the hospital. They will also have local community leaders, people with expertise in governance, finance and the wider delivery of health services.

Currently, even minor decisions are frequently referred up the line to area health CEO, Director-General or state minister's offices. Problems fester, staff are demoralised and bad situations get worse.

This proposal will significantly improve the management of public hospitals and will, in the long term, produce significantly better services for patients.

This is an important expression of the Howard Government's philosophy. We don't believe in more bureaucrats, we believe in more local services.

The Labor Party says that the ultimate answer to public hospital problems is a federal takeover. The Howard Government believes that a better answer to public hospital problems is a local takeover.

Public Hospital Accountability and Governance - Questions and Answers

What is the Government announcing that it will be doing in the next Australian Health Care Agreements (AHCAs) to encourage the better running of our public hospitals?

The Howard Government will insist, as a condition of the 2008-13 Agreements, that the States and Territories will:

- Make a commitment to the improved management and governance of our public hospitals.

- Ensure more local accountability and responsibility for the running and performance of our public hospitals.

- Reform, as necessary, their governance arrangements so that public hospitals report directly to local boards of management that comprise people with appropriate leadership, management and clinical expertise.

- Promote public hospitals having a much more direct relationship with the local communities that they serve rather than with bureaucrats in a remote head or regional office.

Why is that necessary?

Generally Australia's public hospitals are marvellous institutions doing a great job. Australians are lucky to have services of this calibre. When things go seriously wrong it is the exception rather than the rule. Recent events in NSW, Queensland and elsewhere tell a poor story about how public hospitals are run and managed.

They indicate appalling breakdowns in communication and chains of responsibility. The buck seems to be eternally passed while stopping nowhere.

People want "the Feds" to fix these problems, yet under the AHCA arrangements the Commonwealth has no say - even though two out of every three government health dollars is a Commonwealth dollar, including almost one out of every two dollars funding public hospital services.

Don't States and Territories have hospital boards now?

No they don't. In most States and Territories, public hospitals are run directly by State bureaucracies and report to Head Office, usually through a convoluted Public Service hierarchy.

NSW is divided into health regions but these are run by executives, not by boards of management. If there's a problem, as happened when Camden and Campbelltown Hospitals were allegedly mismanaged several years ago, the NSW Minister and her head of department can simply remove one health service head and replace him or her with another bureaucrat. It doesn't fix underlying problems.

The Commonwealth prefers an approach that devolves the management and governance of a hospital to an appointed board of management with a balance of necessary administrative and clinical knowledge and skills. The hospital, through its chairman, reports directly to the State minister, who remains ultimately politically accountable. But the CEO of the hospital reports first and foremost to his or her board, and it is the board that takes key decisions in the policy and financial framework set by government, and with reference to ensuring good and safe clinical practice.

A major difference between the Howard Government's proposal and that which has applied in Victoria is that clinicians and nurses will be guaranteed a voice on the boards, each hospital will have its own board and the boards themselves will have greater autonomy.

A board-based approach promotes better decision-making and greater accountability. It brings those who run the hospital much closer to the community that it serves and whose lives their decisions affect. That can only improve patient care and community satisfaction.

Isn't this "me too" with Labor's hospitals policy?

No. Where Labor talks of taking over the whole of the running of public hospitals from the States, this Coalition plan goes the other way. It is devolutionary. It empowers local communities through localised management. It recognises that each of the 750 public hospitals in Australia is unique, and that one-size-fits all management is no longer appropriate for our public hospitals - if indeed it ever was.

To Labor, "fixing public hospitals" is a slogan not a policy. If it takes over the running of public hospitals federally, Head Office will be even remoter from hospital staff that it is now.

The real challenge is to make our hospitals better-run, more clinically efficient and safer places for patients and staff to be.

Giving power to the coalface, while making decision-makers more responsible and accountable, is a big step forward. Like the changes the Howard Government has made to strengthen Medicare, this is an important change with the potential to achieve big improvements in the way things are done and give the public much more confidence in their hospital services.

http://www.health.gov.au

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