Why “super departments” have been a failed experiment in health

The Victorian Government announced last month that the Department of Human Services would be split in two:

• The Department of Health (DoH) will be responsible for prevention, mental health and drugs, public health, health services (including hospitals), community and rural health and aged care.
• The Department of Human Services (DHS) will be responsible for housing; disability services; concessions; children, youth and families.

Health and community services consultant Dr Tom Keating has been considering the history of “super departments” and why they’ve failed.

He writes:

“The recent decision of the Victorian government to separate health functions from community services and housing has been attributed many rationales. It has been linked to the health reform process. There are substantial health reforms on the table for COAG later this year, some of which involve a reordering of Commonwealth and State responsibilities. It makes sense to have a clear and undiluted focus on health issues when far-reaching changes are being negotiated.

It has also been linked to performance issues in the Department of Human Services. The Department has come under scrutiny in recent times for the veracity of its hospital performance data and there are perennial issues associated with waiting times. In community services some high profile child protection cases have caused concern and there is an Ombudsman’s report pending which is anticipated to be critical of the Department’s performance.

The reality however is that the health reform process is at the stage of policy debates at the intergovernmental level and is unaffected by the operational management of health services. In administrative performance, the Victorian health system stacks up as more effective than most if not all other States and for all its workload and workforce management problems, Victoria’s child protection service is considered a model internationally. So why the change?

The concept of “Super Departments” which combine like or related functions into larger administrative units emerged in thinking about public administration in the mid 1980s. An early precursor was the amalgamation of community welfare, disability and children’s services to create a single community services department in Victoria in 1985.

The theoretical underpinning this was in Herbert Simons’s ideas on bounded rationality:  We can be ideally rational, but not about everything at once. We construct our understanding of the administrative world into manageable units and satisfice within their boundaries. These boundaries are constructs not realities and are meaningful for administrators but not for users of services. Successful complex organisations differentiate functions, but they expend comparable effort in coordinating between those functions.

In health, the idea also gained traction from the social model of health. Health and wellbeing it was argued could not be reduced to questions of medical intervention but were a function of a broad range of social, economic and environmental factors. The provision of health services needed to take account of social context and the range of non-medical services that people required.

A super department would bring together those activities of government that supported health and wellbeing in a way that supported coherent policy making across related sectors and promoted integrated service delivery. Or so the argument went.

The Victorian Department of Human Services was established following the election of the conservative Kennett government in 1993. It combined the functions of health (including acute health, primary care, public health and mental health), aged care, community welfare, disability, children’s services and housing. The inaugural Secretary of the Department, Dr John Paterson initially put in place a highly integrated administrative arrangement which despite the savage cutbacks of the first Kennett government successfully implemented case-mix funding in the state’s hospitals and showed promise of making critical policy and service delivery linkages.

That promise was soon disappointed however. A decline in public confidence in hospital administration caused by the cutbacks led to a hasty amalgamation of health services to form metropolitan health networks. These were capital obsessed, resistant to any integration and so large and powerful that insisted on answering to no-one but the Premier. An old guard in Housing resisted becoming a part of an integrated department and the adoption across the community services and health spectrum of unit pricing and activity based purchasing of services contributed to service fragmentation and myopic policy.

The Bracks government, which was elected in 1999, adopted much of the policy rhetoric of the British Blair government. Blair’s approach was Benthamite. The social world is seen as knowable and amenable to measurement and mechanistic change. Social goals can be achieved if we can just identify the right levers. Blair’s government spurned a vast bureaucracy dedicated to defining and measuring progress against “joined-up” policy goals.

Brack’s version of joined-up government was set out in Growing Victoria Together, an attempt to provide a whole of government policy framework for the State. It was however entirely without integrative structures and government departments continued to act in isolation. Super departments like the Department of Human Services and the Department of Victorian Communities singularly failed to integrate their internal program units. In its second iteration, Growing Victoria Together proposed to change the way government works. Its one mechanism for doing this was regional forums at which government managers might meet. Not surprisingly this has been largely a waste of time.

The one serious attempt at integrated delivery by the Bracks/Brumby governments is instructive. The Neighbourhood Renewal program was initiated within Housing as an urban regeneration program for Victoria’s deteriorating public housing estates and required a whole-of-government response. Despite its rhetoric, the program has struggled to get commitment from other parts of the Human Services Department and after eight years it is only now beginning to achieve some serious commitment from other government departments.

The need for integrated health and community services policy and service responses is unchanged. Children in care continue to have poor health status; the mentally ill continue to be concentrated in the State’s diminishing public housing stock. Victoria’s indigenous population continues to experience poor outcomes on all indices of health and community wellbeing. The structure which was to bring together the resources of the state to address those needs has failed to do so.

The failure of the Super Department, joined-up and whole of government experiments was in part a failure in policy. It is a collectivist idea. It proposes a role for government which goes beyond the mere delivery of services. It was implemented in the first instance however by an anti-collectivist government which wanted to reduce the role of public administration to that of a purchaser of services. It was replaced by a government which was temperamentally sympathetic to policy and service integration, but unwilling to jettison the fragmenting administrative tools of its predecessor.

It was also a failure of leadership. Paterson quickly acceded to Kennett’s politically motivated amalgamation of metropolitan hospitals and wasted much of his time as Secretary futilely plotting the destruction of public sector unions. His successors acquiesced in the progressive centralisation and fragmentation of program responsibilities and in the end achieved little in the way of joined-up policy or service delivery.

Victoria’s current Premier John Brumby is a pragmatist. He has little patience with complex notions of government and believes that outcomes should be delivered simply and quickly. In the circumstances, it is hard to dispute his decision to abandon a failed experiment. Joined-up government has joined that long catalogue of ideas that failed because they were never really tried.”