Reform a game changer for healthcare in Australia

3 March 2010

The Prime Minister's announcement to reform Australia's healthcare system will put patients at the centre of health care services according to PricewaterhouseCoopers.

"The Prime Minister's announcement today is a real game changer for the way healthcare is delivered and funded in Australia,” national health practice leader Mary Foley said.

"This announcement signals the government's intention to undertake significant structural reform that aims to put the patient at the centre of a more efficient, patient-focused healthcare system. The government's proposal of a funding model organized around individual patient episodes puts the patient at the centre of healthcare delivery, encouraging greater transparency and efficiency in our hospital system. The federal government will become the predominant healthcare payer in Australia, funding 60% of hospital care, including capital costs, teaching and research and 100% of primary care."

"The movement towards a national system promotes national benchmarking and the adoption of best practice models of care. The Prime Minister has set a vision to address serious systemic challenges by adopting an activity-based funding model. This means that the proposed hospital networks will be funded based on the treatments and procedures which actually occur."

70% of the world's OECD countries have adopted activity-based funding approaches.

"Instead of the current ‘black box funding' that doesn't account for which patients are receiving what treatment an activity-based funding model will see the dollars following the patient, ensuring they receive access to the right treatment at the right time in the right setting."

Ms Foley said it was important to be realistic about the steps required for this significant policy change.

"Assuming the proposal is agreed to at the next COAG meeting there are significant steps that need to be taken to implement this structural reform. States and Territories will need to work hand-in-hand with the Commonwealth to move from eight discreet health care delivery models to one activity-based funding system,” she said.

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