Member Bulletin - A National Health and Hospitals Network for Australia’s Future

This update provides a short analysis of the Prime Minister's recent announcement of A National Health and Hospitals Network for Australia's Future and a progress report on the national activities of AGPN to both inform this agenda and best position general practice and the Divisions Network. 

Current Situation

Important health reviews: Positioning the Network

The Australian General Practice Network (AGPN) has produced A Blueprint for improving the health and wellbeing of the Australian population - the role and function of Primary Health Care Organisations in response to two strategic documents released by the Commonwealth Government during 2009: the National Health and Hospitals Reform Commission's A Healthier future for all Australians and Building a 21^st century primary health care system.

The forerunner to the blueprint was a policy position statement, Care That Puts People First, which outlined three key pillars for a reformed primary health care system:

• § comprehensive primary health delivery through general practice led multidisciplinary teams,
• § reformed primary health care financing, and
• § a regionalised approach to planning, coordination and delivery through primary health care organisations.

Primary health care organisations (PHCOs) are introduced in both documents, and the NHHRC's report recommends that they evolve from or replace existing divisions of general practice (or General Practice Networks - GPNs). PHCOs will have more expansive and strategic functions than GPNs. Accordingly, the Blueprint notes that leading reform of regional primary health care will require organisational and infrastructural development that takes time, and as agreed by members AGPN is currently developing a transition strategy for the transformation of GPNs to PHCOs, with a timescale from now to June 2012.

Care That Puts People First: AGPN's Primary Health Care Position Statement: http://www.agpn.com.au/__data/assets/pdf_file/0020/16274/20090402_pos_AGPN-PHC-Position-Statement-2009-FINAL---Graphic-Designed.pdf

Connecting Care: AGPN's blueprint for PHCOs: http://www.agpn.com.au/__data/assets/pdf_file/0013/21451/20091127_pap_Australian-PHCOs-Blueprint-FINAL-Graphic-designed.pdf

For the NHHRC Final Report: http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/nhhrc-report-toc

For the draft National Primary Health Care Strategy: http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/nphc-draft-report-toc

Announcing A National Health and Hospitals Network for Australia's Future

On 3 March 2010 the Prime Minister announced A National Health and Hospitals Network for Australia's Future as the first stage of the Federal Government's National Health Reform Plan. This is the Government's first major policy announcement in response to the health reviews referred to above. This policy is significant because it represents major reform of not only health and hospitals but also the economy and Commonwealth/State relations. The National Health and Hospitals Network (NHHN) provides a platform for reform of governance and financing on which other reforms can be built.  

For the document: http://www.health.gov.au/internet/main/publishing.nsf/Content/nhhn-report/$FILE/NHHN%20-%20Full%20report.pdf

For the Prime Ministers' National Press Club address: http://www.pm.gov.au/node/6534

 

 What do Divisions need to know about the key reform directions?

There are a number of features in the reform agenda relating to governance, funding, policy leadership, service delivery and accountability that GPNs should be aware of. 

Reform direction 1: one national health system: funded nationally, run locally

• § The NHHN creates a single national network of hospitals - comprised of Local Hospital Networks (LHNs), rather than eight separate State and Territory systems.
• § The Australian Government will be the dominant funder of public hospitals, and will pay for 60 per cent of all efficient public in-hospital costs by 1 July 2011
• § The Australian Government will retain one-third of GST and invest this directly into health and hospitals through a dedicated fund. This will mean more money is available to meet rising health costs.

 

 Reform direction 2: 100% funding and policy responsibility for Primary Health Care 

• § The Australian Government will take full funding responsibility for all health services provided outside of hospitals, like GPs and primary health care services.
• § A stocktake of services funded and run at state level will examine what services will be included.
• § By 1 July 2011, Australian Government funds (including former State funds) will go direct to primary health care services (including community based sub-acute and outpatient services).
• § It is anticipated that by 1 July 2012, all Australian Government primary health care funding will flow via primary health care organisations. The only exception to this will be MBS and PBS payments which will not change.

Reform direction 3: Local Hospital Networks (LHNs).

• § Local hospitals will work in local networks and be paid directly by the Commonwealth Government for each service they provide - known as activity based or casemix funding. The Government has acknowledged that this funding approach may not sustain smaller rural hospitals and that a different model could apply. Direct funding will flow by 1 July 2012.
• § State and Territory Governments will be required to establish statutory LHNs with key governance roles - including health and business professionals - appointed under state legislation. State and Territory Governments will have a role in determining the configuration of LHNs in their jurisdictions under service agreements between themselves and LHNs.
• § While the Commonwealth will be the majority funder, States and Territories will still be responsible for payment of 40% of the efficient cost of services, plus any inefficiency costs. The Commonwealth will operate as majority funder, but States will retain responsibility for hospital performance (clinical, financial, etc)

Reform direction 4: Further announcements

• § Further announcements are expected over coming months on general practice and primary health care, practice nurses, workforce, e-health, prevention, aged care and mental health.
• § The first of these announcements was made recently with regard to increased numbers of GP training places and an expansion of the Prevocational General Practice Placement Program: see http://www.pm.gov.au/node/6571 and http://www.pm.gov.au/node/6568
• § Announcements regarding practice nurse measures and PHCO formation are expected to be next stage announcements.
  

 Some common questions and answers about Local Hospital Networks

What form will LHNs take?

LHNs will be groupings of between one and four acute hospitals but with potential for inclusion of other inpatient services (eg. sub-acute) with regional networks potentially including more small hospitals. LHNs will need to be large enough to operate efficiently and to provide a reasonable range of hospital services.  

 LHNs will be governed by an appointed professional Governing Council and CEO.  The intent is that the Council will be a skills based board including clinicians with the professional capacity to run these large, complex organisations.

 

Could LHNs take on the role proposed for PHCOs?

No. The Government remains committed to PHCOs to better integrate the current array of GP and primary health care services, to reduce cost shifting and blame and to drive allocative efficiency and innovation. PHCOs are also expected to have a key focus on the hospital interface and managing the demand for hospital services.   

Unlike LHNs which will be responsible for the management of all hospitals services within their area, PHCOs will not be responsible for the management of all general practice and primary health care services within their boundaries. LHNs could be considered as service providers, more akin to general practices and Aboriginal community controlled health services than PHCOs.

PHCOs and LHNs have different roles, responsibilities and functions. PHCOs will plan, coordinate, purchase and in some cases deliver primary health care services on a regional basis.  It is therefore expected that there will be fewer PHCOs than LHNs, and more than one LHN may sit within the boundaries of a PHCO particularly in non-metropolitan areas. However there would be logic in alignment of boundaries.   

 

Is there a risk that PHCOs may be considered additional bureaucracy, and irrespective of the above answer, get subsumed into one regional structure anyway?      

 

At this point, the Government recognises the need to separate out primary health care if it is to be strengthened, better organised and integrated.  Scenarios such as one PHCO for every LHN would sustain the current power imbalance between hospital and non-hospital services (unless the PHCOs were significantly large enough and capable and competent to deal one-on-one with a LHN). The alternative of a system of regional PHCOs with one or more LHNs and with quarantined funding for PHC will create greater equity between the two pillars of the PHC system: hospitals and non-hospitals (general practice/PHC).  AGPN has continued to advocate strongly for this outcome.

 

What action has AGPN been taking to position a key role for the Network in the health reform agenda?

At the August 2009 Chairs/CEOs meeting and the subsequent November Chairs/CEOs meeting the membership accepted the challenge to become the future PHCOs of Australia.  This move was considered to be the next logical stage in the evolution of the Network as well as necessary for its survival (the Government is unlikely to fund the Divisions of General Practice Program as well as a new system of PHCOs).

Since that time, AGPN has embarked on a number of policy and developmental activities.  At a policy level, Connecting Care, a blueprint for PHCOs was published in November 2009 following considerable consultation in the latter half of 2009 and culminating in discussion at the November Chairs/CEOs meeting and AGPN Forum.

PHCO Transition Strategy

The August Chairs/CEOs meeting also discussed the desirability that each member make a one-off contribution to AGPN to build capacity to enable urgent policy and business development work to be undertaken to assist to position the Network as the logical choice for PHCOs, to develop and advocate a preferred model for an Australian system of PHCOs and to provide the economic and business analysis of the costs associated with transition, start up and initial operations. A proposal was presented to Network members seeking a financial contribution to this suite of activities, attracting contributions in the vicinity of $240,000.

KPMG was subsequently engaged and have brought together a multidisciplinary team of governance experts, legal advisers, organisational change management advisers and health economics advisers to help develop two separate but related pieces of work:

1.) a transition strategy which will provide the Network with:

• § a transition toolkit that provides a detailed roadmap and the relevant tools to form a PHCO
• § a transition timeline over the twelve-month horizon it should take for a PHCO to evolve/form
• § a plan that details the individual transition steps and responsible parties for each step
• § a summary of the steps involved in the legal pathways that a GPN could take to evolve to a PHCO

2.) a fully costed business case for PHCO transition, establishment and initial operations.

The primary audience for the strategy is the Network and for the business case is government, however both documents will be circulated to the Network according to the timeframes below.

  PHCO Boundary Modelling

Carla Cranny and Associates were commissioned to develop an objective assessment of PHCO boundaries, size and number taking into account factors such as demography, communities of interest, rurality, growth corridors and existing hospital and PHC infrastructure. The output from this consultancy will be a preferred state-by-state scenario backed by maps, comprehensive data profile and a detailed discussion of guiding principles, criteria and other rationale. 

Series of policy papers

The PHCO blueprint is a high-level aspirational document. AGPN is currently working on a series of supplementary policy papers as a basis for Network-wide consultation on the following topics. We will also seek the views of the General Practice Network Leadership Group (GPNLG) and the recently formed National Policy Consultative Group (for membership see: http://www.agpn.com.au/policy/policy-development/network-primary-health-care-policy-consultative-group):

§ Membership and governance frameworks	§ PHCO funding models and environment
§ Community engagement models	§ Role and configuration of a national peak body
§ The PHCO-LHN-hospital interface	§ PHCOs and general practice interface
§ PCHO roles, functions and transition stages	§ A PHCO leadership development scheme

The purpose of this supplementary series is to arrive at a preferred network view on these aspects of a PHCO system.  

Strategic alliances

AGPN has continued to partner with United General Practice Australia (UGPA) and the National Primary Health Care Partnership (PHCO). This has included joint advocacy for general practice/PHC infrastructure, e-health strategies and workforce development incentives in Federal Budget and other joint statements.  AGPN will continue to consult and work with these key forums on relevant aspects of PHCOs such as membership and governance frameworks and models of community engagement.   

What is next?

There are a number of outputs from the PHCO transition related policy and development work that will be made available to the Network for consultation over the coming months. Some key milestones to June 2010 are:

End March 2010	Network review of independent report on PHCO Boundaries by Carla Cranny and Associates
Mid April 2010	Network consultation on: § the draft PHCO transition strategy by KPMG § a PHCO membership and governance framework § the role and configuration of a national peak body
April 2010	Development of a pre-election manifesto document and campaign. Please note that pre-election packs containing sample media releases, letters to parliamentarians and candidates and other background briefing will be made available to members as the timing of the Federal election becomes more apparent.
11 May 2010	Federal Budget.  Pre-budget advocacy packs will be made available to members for use locally with local opinion leaders such as media and parliamentarians.
May 2010	Circulation of draft PHCO business case by KPMG to members for comment
July 2010	Submission of PHCO business case to Government

 

What's happening locally?

 

The ERGPA Board of Directors has been discussing the primary health care reform over many months of Board Meetings now. The Directors held a Planning Meeting on 27 February 2010, inviting representatives from Community Health, Eastern and Southern Health, the State Government, the Primary Care Partnership, General Practice Victoria and the Australian General Practice Network. The planning team reviewed the Vision and Mission of ERGPA with a view to both current and future roles in the health system.

 

General Practice Victoria held a briefing meeting for CEOs on 12 March 2010, presenting the draft independent report by Carla Cranny on the PHCO Boundaries.

 

The Board of Directors reviewed the draft PHCO Boundaries at their 23 March 2010 meeting, making recommendations to AGPN and GPV regarding the proposed PHCO catchments and methodology.

 

The Bard of Directors have subsequently undertaken to meet with the Members, both as a group and individually, in order to discuss general practice preparations for the health reform and the potential changes to the role of the Division.

 

Next Steps

 

•1.   The Board of Directors is holding a briefing meeting for Members on Tuesday 18 May (following on from the Federal Budget).

This meeting will allow members the chance to discuss with Directors and the CEO the future of both general practice and the Division under the proposed changes to the system, and to hear the results of the Federal Budget and any progress on primary or acute care announcements.

 

•2.   The Board of Directors will be meeting with individual practices and GP Members over the coming months to discuss the changes at a local level with you, and/or your practice team.

This opportunity will allow you to speak one-on-one with a Director about your practice, your view of the Association and how you believe things should be moving forward.

 

You will receive invites to each of these events in the mail over the following weeks. If you would like more information or to discuss the reform and local progress please contact:

 Dr Barbara Inness, Chair: chair@ergpa.com.au

 or

 Kristin Michaels, CEO: ceo@ergpa.com.au or 9871 1000

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