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As National Cabinet spruiks their commitment to health reform, policy experts want more detail and vision

Below are details from the statement issued after yesterday’s National Cabinet meeting, and responses from some health policy experts.


Focus on health, NDIS and gun control

The statement from National Cabinet says:

First Ministers have agreed to a further $1.2 billion package of Strengthening Medicare measures to take pressure off our hospitals. These measures will grow and support our health workforce, while reducing unnecessary presentations to emergency departments.

The Commonwealth will:

  • Fund and implement, with states and territories, the health-related recommendations from the Independent Review of Health Practitioner Regulatory Settings (Kruk Review)
  • Boost funding for Medicare Urgent Care Clinics; and
  • Support older Australians through avoided hospital admission and earlier discharge from hospital.

National Health Reform Agreement

Australians rightly want a whole-of-system approach to healthcare, where primary care and hospitals are connected and able to provide optimal models of care in the right place and the right time.

National Cabinet endorsed Commonwealth increasing National Health Reform Agreement contributions to 45 percent over a maximum of a 10-year glide path from 1 July 2025, with an achievement of 42.5 percent before 2030.

National Cabinet endorsed the current 6.5 percent funding cap being replaced by a more generous approach that applies a cumulative cap over the period 2025-2030 and includes a first year ‘catch up’ growth premium.

As part of these reforms, agreed to a continued focus on addressing elective surgery waiting lists as a priority.

Health Ministers will commence the renegotiation of the National Health Reform Agreement (NHRA) Addendum to embed long-term, system-wide structural health reforms, including considering the NHRA Mid-Term Review findings.

These reforms will focus on the entire health system and move towards a more integrated, equitable, efficient and sustainable system. This will give Australians better access to health services they need, when they need them, and alleviate current pressures in public hospitals across the country.

First Ministers are committed to continuing to work together as these reforms progress.

National Disability Insurance Scheme

National Cabinet acknowledged the need for reforms to secure the future of the NDIS, ensuring it can continue to provide life-changing support to future generations of Australians with a disability.

Governments noted the forthcoming release of the final report of the Independent NDIS Review, co-led by Professor Bruce Bonyhady AM and Ms Lisa Paul AO PSM.

As an initial response to the NDIS Review, National Cabinet agreed to work together to:

  • Implement legislative and other changes to the NDIS to improve the experience of participants and restore the original intent of the Scheme to support people with permanent and significant disability, within a broader ecosystem of supports.
  • Adjust state and territory NDIS contribution escalation rates, increasing from 4 per cent to be in line with actual Scheme growth, capped at 8 per cent, with the Commonwealth paying the remainder of Scheme costs growth, commencing from 1 July 2028.

The National Cabinet agreed to jointly design additional Foundational Supports to be jointly commissioned by the Commonwealth and the states, with the work oversighted by the First Secretaries Group. Additionally, the Council of Federal Financial Relations (CFFR) will oversight costs of the reforms and report to National Cabinet.

An initial tranche of legislation will be introduced into the Commonwealth Parliament in the first half of 2024, with rule changes phased in as developed.

The delivery of Foundational Supports would look to be delivered through existing government service settings where appropriate (e.g. child care, schools), phased in over time.

Funding would be agreed through new Federal Funding Agreements, with additional costs split 50-50, and final details to be settled through CFFR.

The Commonwealth agreed to cap an additional expenditure for states and territories on new foundational disability services to ensure the combined health and disability reforms will see all states and territories better off.

These commitments demonstrate Governments’ ongoing commitment to the NDIS. Discussions with the disability community will continue over the coming months as we work together to make the positive changes needed for people with disability.

National Firearms Register

Ahead of the anniversary of the police shooting in Wieambilla, National Cabinet agreed to implement a National Firearms Register – delivering on an outstanding reform from the Port Arthur massacre response in 1996. This represents the most significant improvement in Australia’s firearms management systems in almost 30 years and will keep Australia’s first responders and community safer.

While Australia has some of the strongest firearms laws in the world, the Register will address significant gaps and inconsistencies with the way firearms are managed across all jurisdictions.

The register will be a federated model – state data connects with a central hub data allowing near real time information sharing across the country.

The Commonwealth will assist states and territories with funding the reforms, which will provide enduring benefits for decades to come. National Cabinet agreed to work together to ensure that the Register is fully operational within four years.


Expert analysis

More work needed – Peter Breadon, Director of the Health Program at Grattan Institute

At National Cabinet this week, the federal and state governments struck a funding deal. The states got an increase in guaranteed GST revenue, and more funding for public hospitals. In return, they will provide more services for people with a disability, slowing the growth of NDIS costs. Some other health announcements were made, including more funding for urgent care centres and a commitment to implement the recommendations of the Review of Health Practitioner Regulatory Settings.

The funding deal will help hospitals keep up with demand and make the NDIS more sustainable. But it was more about shifting costs around the Federation than reforming the health system. National Cabinet did agree to start negotiations on the next National Health Reform Agreement, with the aim of creating a more “integrated, equitable, efficient and sustainable system”.

That means the health reform promised for this meeting might still happen. To work, it will need a clear vision that goes well beyond the adjectives in the National Cabinet’s statement. And agreeing difficult reforms could be harder now – the Federal Government will have a weaker hand after committing to a funding boost before the negotiations begin.

Read more from Breadon in ‘National Cabinet should fire the starting gun on national health reform’ at Pearls and Irritations, where he advocates for:

• Stopping chronic disease before it starts. Our health system is in fact a sickness system, with far too little investment in keeping people healthy – just two cents in every dollar of health spending. Two years ago, Australia’s governments committed to more than doubling that figure. But there’s no sign that they are following through, with Australia still languishing near the bottom of the international pack.

The last national prevention deal was scrapped a decade ago. Federal and state governments should fill the vacuum with a new deal that delivers on their pledge to increase funding. The money should be spent on initiatives recommended by the new Centre for Disease Control, to make sure we get good value for money.

• Primary care needs to help people with chronic disease to stay as healthy as possible. Even with better prevention and new breakthrough drugs to treat obesity, we can still expect rates of chronic disease to stay high for decades, and chronic disease management is one of the most important roles of primary care.

• A strategy to shift care out of hospitals. As chronic disease intensifies, demand for hospital care will keep growing. Spending on hospitals has been surging in recent decades, yet hospitals are still struggling to keep up. With demand predicted to grow further, hospitals will need to change.

Governments can accelerate the uptake of virtual and in-home care by measuring the care delivered in people’s homes, setting targets, and tweaking funding. Alternatives to hospitals, such as urgent care centres, should be evaluated, improved, and scaled up.

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More detail needed – health policy analyst Charles Maskell-Knight

As ever, the devil will be in the detail, and a National Cabinet communique is long on spin and short on detail.

The increase to 45 percent in the Commonwealth NHRA overall contribution is welcome, but it is not clear how this will be achieved.

Scrapping the 6.5 percent cap is clearly necessary if the Commonwealth share of total spending is not to decrease, but again the details of the replacement mechanism are not spelt out, so it is hard to comment on what impact it might have.

And finally, “a continued focus on addressing elective surgery waiting lists as a priority”  could mean anything. But given the waiting list data released by the AIHW today, it is hard to imagine the states have been focussing on the issue so far, so “a continued focus” is a bit of a stretch.

Read more from Maskell-Knight: ‘The National Health Reform Agreement has been under review. Why the secrecy?’

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More work needed – health policy analyst Adjunct Associate Professor Lesley Russell

The Medicare initiatives are helpful Band-Aid solutions. These are not Medicare reforms, although I suspect that’s what they are being sold as. More needs to be done with more urgency to address healthcare workforce shortages and maldistribution.

The decisions made about reforms of the NHRAs are welcome, but I’m sure the experts will say the time frames are too drawn out. The recommendations from the NHRA review have not been made public, so there is no way to know if the changes are in line with these recommendations.

I do think that a lot of the hospital problems with ambulance ramping, bed block, and delayed elective surgeries could be fixed with a greater attention to sub-acute and step down care (especially for mental health), a stronger focus on providing integrated community-based care for people with chronic and complex conditions, and ensuring that people in aged care have better access to primary care and palliative care.

Greater investments in these areas would help relieve the pressures on acute care and deliver better patient outcomes and quality of life. And yes, all that means that the federal and state and territory governments must work closely together – and be bold enough to intertwine their finances!”

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More detail needed – health policy analyst Professor Stephen Duckett, University of Melbourne

Outcome good.

Lack of detail about older person initiative and what change states will make in exchange for extra $$$. More of the same doesn’t cut it.

Read more from Duckett in this explainer in The Conversation about the National Health Reform Agreement.

He says many commentators and government officials wrongly assume the same model applies for funding to each state, and that this false assumption about the way the National Health Reform Agreement works for each state leads to complaints the agreement constrains good policy initiatives, rewards “volume not value” and encourages unnecessary hospitalisations.

Worse, it allows states to blame the agreement for their own mismanagement of their hospitals. And it encourages fruitless discussions between Commonwealth and state officials about “reform projects” that typically go nowhere but can be used by politicians to hoodwink the public that big issues in the health sector are being addressed.

The article explains why funding from the Commonwealth to the states must be considered at two levels: the National Health Reform Agreement and the GST.


More food for thought

The Conversation: States agree to do more heavy lifting on disability, in exchange for extra health and GST funding, by Michelle Grattan

ABC Radio National interview with NACCHO CEO Pat Turner, who says she wants a Closing the Gap fund established, to which the Commonwealth, states and territories can contribute, to support community initiatives, with decisions made at the community level between government and community representatives. She also wants to see the big funding agreements between governments, in areas like housing, education and health, to do much more for Closing the Gap.


See Croakey’s extensive archive of articles on health reform