COAG Meeting – Hospital funding and health reform

The official  communiqué from the 1 April 2016 COAG meeting and subsequent responses.

Hospital funding and health reform

COAG reaffirmed that providing universal health care for all Australians is a shared priority.

Leaders agreed a Heads of Agreement for public hospitals funding from 1 July 2017 to 30 June 2020 ahead of consideration of longer-term arrangements. This will see the Commonwealth providing an estimated additional $2.9 billion in funding for public hospital services, with growth in Commonwealth funding capped at 6.5 per cent a year.

This Agreement preserves important parts of the existing system, including activity based funding and the national efficient price, and focuses on improving patient safety and the quality of services, and reducing unnecessary hospitalisations.

As part of this Agreement, all jurisdictions agreed to take action to improve the quality of care in hospitals and reduce the number of avoidable admissions, by:

  • reducing demand for hospital services through better coordinated care for people with complex and chronic disease – the current system does not always provide the care the chronically ill need – this means they are hospitalised more than is necessary;
  • improving hospital pricing mechanisms to reflect the safety and quality of hospital services by reducing funding for unnecessary or unsafe care – reducing hospital-acquired complications will improve patient safety; and
  • reducing the number of avoidable hospital readmissions – too many patients are readmitted to hospitals as a result of complications arising from the management of their original condition.
  1. The Commonwealth will continue its focus on reforms in primary care that are designed to improve patient outcomes and reduce avoidable hospital admissions.

Responses and Analysis

Another day, another hospital funding dispute – how to make sense of today’s COAG talks  In this article from the Conversation, Stephen Duckett, Director, Health Program, Grattan Institute puts the latest announcements in context and concludes "On the whole, the day will probably result in a good outcome for the public hospital system, avoiding, at least for the time being, the perilous position created by the 2014 Commonwealth Budget...A major benefit of the proposal on the table today is that it restores cost sharing. This means that the Commonwealth again has skin in the game in terms of increases in public hospital costs. It again will cause the Commonwealth to focus its mind on what it can do in areas of its policy responsibility to rein in those costs."

Hospital funding deal: experts respond  - In this article from the Conversation experts Stephen Leeder, Emeritus Professor, Menzies Centre for Health Policy at the University of Sydney, Lesley Russell, Adjunct Associate Professor, Menzies Centre for Health Policy, University of Sydney, and Peter Sivey, Senior Lecturer, Department of Economics and Finance, La Trobe University respond to the COAG announcement.  Key points: