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Section 2 – Department Outcomes – 13 Acute Care Outcome 13 ACUTE CARE Improved access to public hospitals, acute care services and public dental services, including through targeted strategies, and payments to state and territory governments Outcome Strategy The Australian Government, through Outcome 13, aims to improve the efficiency of, and access to, public hospitals and acute care services. To achieve this, the Government will deliver major reforms through the Council of Australian Governments (COAG) Heads of Agreement on National Health Reform, the National Healthcare Agreement, and National Partnership Agreements on Hospital and Health Workforce Reform, Improving Public Hospital Services, Elective Surgery Waiting Lists, Health Infrastructure and Expansion of Subacute Care in Multi-Purpose Services. At the COAG meeting of 13 February 2011, the Australian Government and all states and territories signed a Heads of Agreement on National Health Reform. Under this agreement, the Australian Government and all states and territories will work in partnership to improve health outcomes for Australians and secure the long-term sustainability of Australia’s health system. The agreed reforms will deliver better health and hospitals by: helping patients receive more seamless care across sectors of the health system; improving the quality of care patients receive through higher performance standards; and providing a secure funding base for public hospitals into the future. As part of the Heads of Agreement, the Australian Government and the states and territories agreed to the establishment of a national approach to activity based funding (ABF) for public hospital services. This national approach to ABF, commencing from 1 July 2012, will make public hospital funding more transparent, and help to drive efficiency in the delivery of hospital services by establishing a national efficient price for each public hospital service provided to public patients. The national efficient price for public hospital services will be determined by the Independent Hospital Pricing Authority, which will be established as soon as possible. Outcome | 13 Under the Heads of Agreement, the Australian Government, states and territories also intend to introduce improved national reporting of health service performance. The National Health Performance Authority (NHPA) is to be established to monitor and report on the performance, at the local level, of hospitals and primary health care services. The NHPA will produce Hospital Performance reports that will report on the performance of Local Hospital Networks and individual hospitals, both public and private, on a number of performance domains to be agreed by COAG. The work of 339

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Section 2 – Department Outcomes – 13 Acute Care

Outcome 13

ACUTE CARE

Improved access to public hospitals, acute care services and public dental services, including through targeted strategies, and payments to state and territory

governments

Outcome Strategy The Australian Government, through Outcome 13, aims to improve the efficiency of, and access to, public hospitals and acute care services. To achieve this, the Government will deliver major reforms through the Council of Australian Governments (COAG) Heads of Agreement on National Health Reform, the National Healthcare Agreement, and National Partnership Agreements on Hospital and Health Workforce Reform, Improving Public Hospital Services, Elective Surgery Waiting Lists, Health Infrastructure and Expansion of Subacute Care in Multi-Purpose Services.

At the COAG meeting of 13 February 2011, the Australian Government and all states and territories signed a Heads of Agreement on National Health Reform. Under this agreement, the Australian Government and all states and territories will work in partnership to improve health outcomes for Australians and secure the long-term sustainability of Australia’s health system. The agreed reforms will deliver better health and hospitals by: helping patients receive more seamless care across sectors of the health system; improving the quality of care patients receive through higher performance standards; and providing a secure funding base for public hospitals into the future.

As part of the Heads of Agreement, the Australian Government and the states and territories agreed to the establishment of a national approach to activity based funding (ABF) for public hospital services. This national approach to ABF, commencing from 1 July 2012, will make public hospital funding more transparent, and help to drive efficiency in the delivery of hospital services by establishing a national efficient price for each public hospital service provided to public patients. The national efficient price for public hospital services will be determined by the Independent Hospital Pricing Authority, which will be established as soon as possible.

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Under the Heads of Agreement, the Australian Government, states and territories also intend to introduce improved national reporting of health service performance. The National Health Performance Authority (NHPA) is to be established to monitor and report on the performance, at the local level, of hospitals and primary health care services.

The NHPA will produce Hospital Performance reports that will report on the performance of Local Hospital Networks and individual hospitals, both public and private, on a number of performance domains to be agreed by COAG. The work of

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Budget Statements – Department of Health and Ageing

the NHPA is designed to increase transparency and accountability for hospital performance, leading to improved outcomes for patients.

To support the reforms being introduced through the Heads of Agreement on National Health Reform, a varied National Partnership Agreement on Improving Public Hospital Services will be implemented to increase efficiency and capacity of public hospitals.

The agreement will provide up to $650 million to achieve elective surgery targets and meet an elective surgery National Access Guarantee; $150 million in elective surgery capital; up to $500 million to achieve a four hour National Access Target in public hospital emergency departments; $250 million in emergency department capital; $1.6 billion for new subacute beds; and $200 million flexible funding pool for capital and recurrent projects across elective surgery, emergency departments and subacute care.

The Australian Government will also ensure hospital services respond better to the needs of local communities by agreement with states and territories to the establishment of Local Hospital Networks. These networks will be responsible for operational management and performance of local public hospitals. The effectiveness of each Local Hospital Network will be monitored and assessed by the NHPA using a number of specific performance targets developed and agreed by COAG.

The establishment of Lead Clinicians Groups at national and local levels will further strengthen the Government’s reform agenda. The Government has committed to establishing Lead Clinicians Groups at national and local levels to enhance clinical engagement in the Australian health system, and in turn to help improve quality and safety of patient care and outcomes.

The Australian Government aims to provide Australians with access to an adequate, safe, secure and affordable blood supply, and to life saving and life transforming organ and tissue transplants. To increase the number of organ and tissue donations and access to transplants, the Australian Organ and Tissue Donation and Transplantation Authority (AOTDTA) 1 will implement, coordinate and monitor a best practice national reform package on donation.

The Australian Government is committed to improving Australians’ access to dental services. To achieve this, the Australian Government has announced its intention to close the Medicare Chronic Disease Dental Scheme and implement the Commonwealth Dental Health Program. In addition the Government will fund the provision of mobile dental facilities for Indigenous communities in rural and regional communities to deliver a more efficient and effective public dental service.

The Australian Government is committed to promoting stability and premium affordability in the medical indemnity industry. The establishment of the Indemnity Insurance Fund will allow greater flexibility in the use of available funds in achieving these outcomes. The Government is also committed to

1 For further information on the work of AOTDTA, refer to the AOTDTA chapter in these Portfolio Budget

Statements.

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Section 2 – Department Outcomes – 13 Acute Care

providing eligible privately practising midwives with access to reliable and affordable professional indemnity insurance, thereby allowing midwives to meet their registration requirements under the National Registration and Accreditation Scheme.

As a result of the Strategic Review, some programs have been consolidated into new flexible Funds. Outcome 13 now includes the Indemnity Insurance Fund (Program 13.2). For further information on the outcomes of the Strategic Review, please refer to Section 1.4, page 47.

Outcome 13 is the responsibility of Acute Care Division, and Regulatory Policy and Governance Division. The Transition Office has responsibility for health reform, including implementing activity based funding and establishing the Independent Hospital Pricing Authority and the National Health Performance Authority.

Programs Contributing to Outcome 13

Program 13.1: Blood and organ donation services

Program 13.2: Medical indemnity

Program 13.3: Public hospitals and information

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Budget Statements – Department of Health and Ageing

Outcome 13 Budgeted Expenses and Resources Table 13.1 provides an overview of the total expenses for Outcome 13 by Program.

Table 13.1: Budgeted Expenses and Resources for Outcome 13

2010-11 2011-12Estimated Estimated

actual1 expenses1

$'000 $'000Program 13.1: Blood and organ donation services2

Administered expensesOrdinary annual services (Appropriation Bill No. 1) 12,865 9,979Special appropriations

National Health Act 1953 - Blood fractionation, productsand blood related products - to National Blood Authority 613,409 646,003

Departmental expensesDepartmental appropriation3 5,030 4,794Expenses not requiring appropriation in the budget year4 124 152

Total for Program 13.1 631,428 660,928

Program 13.2: Medical indemnityAdministered expenses

Ordinary annual services (Appropriation Bill No. 1) 157 163Special appropriations

Medical Indemnity Act 2002 108,700 117,200Midwife Professional Indemnity

(Run-off Cover Support Payment) Act 2010 5,000 -Midwife Professional Indemnity

(Commonwealth Contribution) Scheme Act 2010 1,709 3,244

Departmental expensesDepartmental appropriation3 1,341 1,278Expenses not requiring appropriation in the budget year4 33 41

Total for Program 13.2 116,940 121,926

Program 13.3: Public hospitals and information2

Administered expensesOrdinary annual services (Appropriation Bill No. 1) 95,098 145,090

Departmental expensesDepartmental appropriation3 40,304 38,408Expenses not requiring appropriation in the budget year4 991 1,222

Total for Program 13.3 136,393 184,720

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Section 2 – Department Outcomes – 13 Acute Care

Table 13.1: Budgeted Expenses and Resources for Outcome 13 (Cont.)

Outcome 13 totals by appropriation typeAdministered expenses

Ordinary annual services (Appropriation Bill No. 1) 108,120 155,232Special appropriations 728,818 766,447

Departmental expensesDepartmental appropriation3 46,675 44,480Expenses not requiring appropriation in the budget year4 1,148 1,415

Total expenses for Outcome 13 884,761 967,574

2010-11 2011-12Average staffing level (number) 293 275

1 The 2010-11 estimated actual and the 2011-12 estimated expenses are based on the new program structure to be implemented 1 July 2011 by the department as part of the Health and Ageing Portfolio - administrative efficiencies measure.

2 This program includes National Partnerships paid to state and territory governments by the Treasury as part of the Federal Financial Relations (FFR) Framework. National partnerships are listed in this chapter under each program. For budget estimates relating to the National Partnership component of the program, please refer to Budget Paper 3 or Program 1.10 of the Treasury Portfolio Budget Statements.

3 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No 1)’ and ‘Revenue from independent sources (s31)’.

4 ‘Expenses not requiring appropriation in the budget year’ is made up of depreciation expense, amortisation expense, make good expense and audit fees.

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Budget Statements – Department of Health and Ageing

Program 13.1: Blood and organ donation services

Program Objectives Through Program 13.1, the Australian Government aims to:

• support a nationally coordinated approach to organ and tissue donation for transplantation; and

• support access to an adequate, safe, secure and affordable supply of blood and blood products.

Major Activities Improve Australians’ access to organ and tissue transplants

The Government aims to establish Australia as a leader in organ and tissue donation for transplantation. Led by the Australian Organ and Tissue Donation Transplantation Authority (AOTDTA)2, the national organ and tissue reform package continues to introduce nationally consistent initiatives to achieve a significant increase in the number of life saving and life transforming transplants. Improved access to organ and tissue transplants will save or significantly improve the quality of life of patients who are waiting for a transplant. In 2011-12, the department will continue to support AOTDTA as it implements this reform package and work with state and territory governments, clinical and professional bodies, and community sector organisations to provide evidence-based policy and advice to the Government on donation and transplantation.

The Australian Government is committed to providing patients in need of life saving stem cell transplants with the best possible chance of finding a suitable stem cell match. In 2011-12, the department will continue to support patients through the Bone Marrow Transplant Program and the National Cord Blood Collection Network. Under the Bone Marrow Transplant Program, the Government provides financial assistance to cover the cost of bringing an overseas donor or stem cells to Australia for transplantation, when there is no suitable Australian donor, and meets costs not covered under the Medicare Benefits Schedule.

In 2011-12, the Australian Government will, along with states and territories, continue to fund the National Cord Blood Collection Network and support its implementation of the new Clinical Services Plan developed in 2010-11. To increase the probability of finding a matched cord unit for patients in Australia, the network will modify its collection and banking strategies to take into consideration the ethnic diversity of the Australian population and the increased demand for larger (i.e. higher cell count) cord units. As the success of the transplant is dependent on how well-matched the cord unit is to the recipient and the number of cells transplanted, implementing these collection strategies will increase the clinical value of the network inventory to the Australian community. The network will supply matched cord blood stem cell units for the treatment of patients with

2 For further information on the work of AOTDTA, refer to the AOTDTA chapter in these Portfolio Budget

Statements.

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Section 2 – Department Outcomes – 13 Acute Care

life-threatening haematological and immune system conditions. The network will also facilitate access to international cord blood for patients when a match cannot be found in Australia.

Support access to blood and blood products

The Australian Government continues to support access to cost-effective, quality blood components, products and services. Through its chairing and membership of the Jurisdictional Blood Committee, the department works with states and territories to define policy principles and provide financial oversight of the national blood sector. The National Blood Authority3 (acting on behalf of all governments) will continue to manage funding of the national blood service and plasma product sector in accordance with these principles. Under the terms of the National Blood Agreement, the National Supply Plan and Budget is approved annually by all Health Ministers. The Australian Government contributes 63 per cent, with state and territory governments contributing the remaining 37 per cent.

Following the establishment in 2010-11 of an application assessment process for access to new blood and blood products, in 2011-12 the department will refer current and new applications to the Medical Services Advisory Committee (MSAC) for consideration. The MSAC will provide the Government with independent advice on proposals, and ensures that publicly funded products and services are cost effective and reflect best clinical practice.

The Australian Government will also continue to contribute to the Hepatitis C Litigation Settlement Scheme.

Program 13.1 is linked as follows:

• This program includes National Partnerships payments for: - Hepatitis C settlement fund; - Organ transplantation services; and - Organ transplantation service - capital. These Partnerships payments are paid to state and territory governments by the Treasury as part of the Federal Financial Relations (FFR) Framework. For budget estimates relating to the National Partnership component of the program, please refer to Budget Paper 3 or Program 1.10 of the Treasury Portfolio Budget Statements.

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3 For further information on the work of the National Blood Authority, refer to the NBA chapter in these Portfolio

Budget Statements.

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Budget Statements – Department of Health and Ageing

Program 13.1 Expenses Table 13.2: Program Expenses

2010-11 2011-12 2012-13 2013-14 2014-15Estimated Budget Forward Forward Forward

actual year 1 year 2 year 3$'000 $'000 $'000 $'000 $'000

Annual administered expensesOrdinary annual services 12,865 9,979 11,895 12,120 12,178Special appropriations

National Health Act 1953 -Blood fractionation, productsand blood related products -to National Blood Authority 613,409 646,003 695,774 752,986 816,176

Program support 5,154 4,946 7,870 7,629 7,290

Total Program 13.1 expenses 631,428 660,928 715,539 772,735 835,644

Program 13.1: Deliverables The department will produce the following ‘deliverables’ to achieve the objectives of Program 13.1

Table 13.3: Qualitative Deliverables for Program 13.1

Qualitative Deliverables 2011-12 Reference Point or Target

Produce relevant and timely evidence-based policy research

Relevant evidence-based policy research produced in a timely manner

Stakeholders participate in program/policy development

Stakeholders participate in program development through avenues such as regular consultative committees, conferences, stakeholder engagement forums, surveys, submissions on departmental discussion papers and meetings

Improve Australians’ access to organ and tissue transplants

The Clinical Services Plan is implemented by the National Cord Blood Collection Network

Agreed collection and banking strategies implemented

Support access to blood and blood products

The National Supply Plan and Budget developed by the Jurisdictional Blood Committee is agreed by all Health Ministers

National Supply Plan and Budget agreed by all Health Ministers annually

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Section 2 – Department Outcomes – 13 Acute Care

Table 13.4: Quantitative Deliverables for Program 13.1  

Quantitative Deliverables

2010-11 Revised Budget

2011-12 Budget

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Percentage of variance between actual and budgeted expenses

≤0.5% ≤0.5% ≤0.5% ≤0.5% ≤0.5%

Improve Australians’ access to organ and tissue transplants

Number of banked cord blood units

• total 2,379 2,379 2,379 2,379 2,379

• Indigenous 129 129 129 129 129

Support access to blood and blood products

Percentage of the total contribution, made by the Australian Government, to the approved National Supply Plan and Budget

63% 63% 63% 63% 63%

Program 13.1: Key Performance Indicators The following ‘key performance indicators’ measure the effectiveness of Program 13.1 in meeting its objectives thereby contributing to the outcome. Table 13.5: Quantitative Key Performance Indicators for Program 13.1

Quantitative Indicators

2010-11 Revised Budget

2011-12 Budget Target

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Improve Australians’ access to organ and tissue transplants

Percentage of eligible Australians in need of a bone marrow, cord blood or peripheral stem cell transplant who are able to access appropriate treatment

100% 100% 100% 100% 100%

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Budget Statements – Department of Health and Ageing

2011-12 Quantitative Indicators

2010-11 Revised Budget

Budget Target

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Support access to blood and blood products

Percentage of applications for funding of new blood products assessed by the MSAC in a timely manner4

N/A 80% 90% 100% 100%

Program 13.2: Medical indemnity

Program Objectives Through Program 13.2, the Australian Government aims to:

• undertake activities through the Indemnity Insurance Fund.

Major Activities Indemnity Insurance Fund

Following a review of administrative arrangements in the Health and Ageing portfolio, the Australian Government will establish the Indemnity Insurance Fund which consolidates funds that provide Australian Government support for medical indemnity. Initiatives that will be funded under the revised arrangement are well established and include: the Premium Support Scheme; the High Cost Claims Scheme; the Run-off Cover Scheme; and the Incurred-but-not-reported Scheme. The table on page 819 shows the movement of programs into funds as a result of the Strategic Review. The table identifies programs, as previously described in the 2010-11 Portfolio Budget Statements, and the new funds into which these programs have been consolidated. Promote stability of the medical indemnity insurance industry

To ensure the ongoing stability of the medical indemnity insurance industry, the department will continue to monitor the operations and activities of medical indemnity insurers. Medical indemnity insurance is a specialised form of cover that provides surety to medical practitioners and their patients in the event of an adverse incident. Affordable and stable medical indemnity insurance translates to stable fees for patients, and allows the medical workforce to focus on the delivery of high quality medical services.

The Australian Government funds a range of activities to support the medical indemnity industry, including indemnity for high cost claims, exceptional claims,

4 This key performance indicator has changed since the publication of the 2010-11 Portfolio Budget Statements. The

amendments aim to reflect the establishment of the new process to assess current and new funding proposals for new blood products or services. The first round of applications are expected to go to MSAC in 2011-12.

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Section 2 – Department Outcomes – 13 Acute Care

and incurred-but-not-reported claims. These activities ensure the stability of medical indemnity insurance by minimising the impact that large and exceptional claims have on insurers and their ability to continue to provide affordable medical indemnity cover for doctors.

In 2011-12, the department will continue to administer these activities with the assistance of Medicare Australia and contracted medical indemnity insurers. Using the data provided through the Medical Indemnity National Collection and published in reports by the Australian Institute of Health and Welfare, the department will continue to monitor the effectiveness of these activities and provide evidence-based policy advice to the Government.

Keep premiums affordable for doctors

A stable and competitive medical indemnity industry assists in keeping medical indemnity premiums affordable for doctors. Premium support assists specialists whose medical indemnity premiums are relatively high in proportion to their level of clinical and actuarial risk. The subsidies available through premium support reduce the need for these high risk specialties to pass on the cost of their higher premiums to their patients. Premium support is demand driven, with subsidies paid in response to applications from eligible doctors. Therefore, actual funding may vary from estimates over the forward years. However, a decrease in the number of doctors requiring premium support would indicate that medical indemnity premiums are becoming more affordable.

Other medical indemnity activities administered by the department, such as those covering high cost claims and run-off cover, contribute to meeting the cost of eligible claims when they are lodged by medical indemnity insurers. Expense and liability estimates for these activities are provided annually by the Australian Government Actuary. In 2011-12, the department will continue to administer these activities with the assistance of Medicare Australia and contracted medical indemnity insurers. The department will also regularly monitor the industry and liaise with medical indemnity insurers about their cost structures.

Ensure availability of professional indemnity insurance for eligible midwives

Women and their families now have greater choice in maternity care through access to midwifery services subsidised by the Government through the Medicare Benefits Schedule and Pharmaceutical Benefits Scheme.

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3 From 1 July 2010, all health professionals needed to have professional indemnity

insurance to meet the requirements of the Council of Australian Governments National Registration and Accreditation Scheme for health practitioners. The Australian Government has contracted an insurer, Medical Insurance Group Australia, to provide professional indemnity insurance to eligible midwives.

Other insurers are currently reluctant to offer a professional indemnity insurance product for privately practising midwives due to the very small potential premium pool (which tends to make it an unviable commercial proposition) and the lack of accurate and up-to-date data on claims in Australia.

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Budget Statements – Department of Health and Ageing

Professional indemnity support for midwives was introduced on 1 July 2010, and is demand driven; responding to claims when they are lodged by the insurer. For claims over $100,000, the Government will pay 80 per cent of the amount exceeding $100,000, and pay 100 per cent of the amount exceeding $2 million. Through a run-off cover scheme, the Government will pay 100 per cent of each claim that is notified after a midwife leaves the workforce or retires. In 2011-12, the department will work with Medicare Australia to administer professional indemnity insurance for midwives.

Program 13.2 is linked as follows:

• The Department of Human Services (Medicare Australia) to administer medical indemnity activities including indemnity for eligible midwives, under its Delivery of Medical Benefits and Services (Program 3.1).

Program 13.2 Expenses Table 13.6: Program Expenses

2010-11 2011-12 2012-13 2013-14 2014-15Estimated Budget Forward Forward Forward

actual year 1 year 2 year 3$'000 $'000 $'000 $'000 $'000

Annual administered expensesOrdinary annual services 157 163 175 150 150Special appropriations

Medical Indemnity Act 2002 108,700 117,200 126,400 136,800 136,300Midwife Professional Indemnity

(Run-off Cover Support Payment) Act 2010 5,000 - 2 5 5

Midwife Professional Indemnity (Commonwealth Contribution) Scheme Act 2010 1,709 3,244 6,925 6,947 6,947

Program support 1,374 1,319 2,099 2,034 1,944

Total Program 13.2 expenses 116,940 121,926 135,601 145,936 145,346

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Section 2 – Department Outcomes – 13 Acute Care

Program 13.2: Deliverables5

The department will produce the following ‘deliverables’ to achieve the objectives of Program 13.2.

Table 13.7: Qualitative Deliverables for Program 13.2

Qualitative Deliverables 2011-12 Reference Point or Target

Produce relevant and timely evidence-based policy research

Relevant evidence-based policy research produced in a timely manner

Stakeholders participate in program/policy development

Stakeholders participate in program development through avenues such as regular consultative committees, conferences, stakeholder engagement forums, surveys, submissions on departmental discussion papers and meetings

Indemnity Insurance Fund

Consultation with stakeholders on implementation arrangements for the fund

Timely initial contact and follow up consultation where this is required

Establishment of administrative arrangements for the fund

Administrative arrangements in place

Participate and lead the process of developing reports that are published by the Australian Institute of Health and Welfare on medical indemnity

Timely provision and analysis of data

Table 13.8: Quantitative Deliverables for Program 13.26

Quantitative Deliverables

2010-11 Revised Budget

2011-12 Budget

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Percentage of variance between actual and budgeted expenses

≤0.5% ≤0.5% ≤0.5% ≤0.5% ≤0.5%

Indemnity Insurance Fund

Percentage of eligible applicants receiving a premium subsidy

100% 100% 100% 100% 100%

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5 As a result of the Strategic Review, deliverables may have changed from the 2010-11 Portfolio Budget Statements. 6 The deliverable ‘Percentage of eligible applicants covered under the Midwife Professional Indemnity Scheme’

from the 2010-11 Portfolio Budget Statements has been deleted in 2011-12 as it duplicates a key performance indicator.

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Budget Statements – Department of Health and Ageing

Quantitative Deliverables

2010-11 Revised Budget

2011-12 Budget

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Percentage of eligible midwife applicants covered under the Midwife Professional Indemnity Scheme

100% 100% 100% 100% 100%

Program 13.2: Key Performance Indicators7

The following ‘key performance indicators’ measure the effectiveness of Program 13.2 in meeting its objectives thereby contributing to the outcome.

Table 13.9: Qualitative Key Performance Indicators for Program 13.2

Qualitative Indicator 2011-12 Reference Point or Target

Indemnity Insurance Fund

The continued availability of professional indemnity insurance for eligible midwives

Maintain contract with Medical Insurance Group Australia to provide professional indemnity insurance to eligible midwives

Table 13.10: Key Performance Indicators for Program 13.2

Quantitative Indicators

2010-11 Revised Budget

2011-12 Budget Target

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Percentage of medical indemnity insurers who have a Premium Support Scheme (PSS) contract with the Commonwealth that meet the Australian Prudential Regulation Authority’s Minimum Capital Requirement

100% 100% 100% 100% 100%

Number of doctors that receive a premium subsidy support under the Premium Support Scheme

2,500 2,400 2,300 2,200 2,100

7 As a result of the Strategic Review, key performance indicators may have changed from the 2010-11 Portfolio

Budget Statements.

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Section 2 – Department Outcomes – 13 Acute Care

Program 13.3: Public hospitals and information

Program Objectives Through Program 13.3, the Australian Government aims to:

• design and implement far-reaching reforms, including implementation of the Council of Australian Governments’ Heads of Agreement on National Health Reform;

• improve hospital performance reporting and accountability; • increasing efficiency and capacity in public hospitals; • expand subacute care capacity; • improve public access to public dental services; and • improve health care services in Tasmania.

Major Activities National Health Reform

On 13 February 2011, the Council of Australian Governments (COAG) agreed to the establishment of a national approach to activity based funding (ABF) and that hospital services will be funded, wherever possible, on the basis of a national efficient price for each public hospital service provided to public patients.

This national system of ABF will be introduced from 1 July 2012, to make hospital funding more transparent and to help drive efficiency in the delivery of public hospital services. The national efficient price for public hospital services will be set by the Independent Hospital Pricing Authority (IHPA). COAG has agreed to the IHPA being established as soon as possible, with COAG agreed terms of reference and implementation principles. In 2011-12, the department will develop the national system of ABF and establish the IHPA.

The Australian Government is also committed to improving hospital performance by increasing transparency in hospital performance reporting. From 1 July 2011, the National Health Performance Authority (NHPA) will begin to produce Hospital Performance Reports that will assess the performance of every hospital, both public and private, and every Local Hospital Network against a range of performance indicators. As a result, hospital performance will be monitored and reported on at the local level on a nationally consistent basis.

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3 The work of the NHPA will be informed by the Performance and Accountability

Framework that is to be agreed by COAG. The department will establish the NHPA after which point it will be an independent authority under the Financial Management and Accountability Act 1997 and governed by its Authority members, appointed by the Minister of Health and Ageing, in consultation with COAG.

Improve public hospital accountability and management

The Australian Government has introduced a comprehensive body of reform, representing a significant change in the way the hospital system is managed. The Australian Government will continue to engage in strategic hospital policy

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Budget Statements – Department of Health and Ageing

development to ensure the future sustainability and effectiveness of the Australian hospital system.

The goal of the COAG Heads of Agreement on National Health Reform is to deliver better health and better hospitals for all Australians. In 2011-12, the Government will continue to work with states and territories as they establish Local Hospital Networks.

These networks will devolve hospital management to the local level, so that services are more responsive to local needs. The department will provide assistance to states and territories charged with the implementation and establishment of the networks.

To enhance clinical engagement in the Australian hospital system, the Government will establish Lead Clinicians Groups. In 2011-12, Lead Clinicians Groups will be established at national and local levels to inform the delivery of services consistent with evidence-based clinical practice and service delivery, and improved patient health outcomes. The new arrangements will benefit patients and their families through delivery of safer and higher quality care. The department will continue to engage with states and territories and clinicians throughout the implementation of this initiative.

Increasing efficiency and capacity in public hospitals

The National Partnership Agreement on Improving Public Hospital Services came into effect on 19 July 2010. It was revised and signed by the Australian Government and all state and territories on 13 February 2011 and will continue until 30 June 2016. The agreement will drive major improvements in public hospital service delivery and better health outcomes for Australians by facilitating improved access to public hospital services, including elective surgery, emergency department services and subacute care.

Over the course of the agreement, states and territories will receive funding to help reduce the length of elective surgery waiting lists. These include a range of measures designed to deliver more specialists and surgical support staff, and improved capital infrastructure and equipment. This funding is also available to fund capital works to support elective surgery outcomes. In 2011-12, the department will monitor implementation plans provided by the state and territories, assess progress against these implementation plans and assess reward funding based on performance achieved against the elective surgery targets outlined in the National Partnership Agreement.

The Government remains committed to improving hospital emergency services. Through the Four Hour National Access Target, the Government aims for 95 per cent of patients presenting to a public hospital emergency department to be either admitted, referred for treatment, or discharged within four hours, where it is clinically appropriate to do so.

The Government will fund states and territories over five years for the phased implementation of this initiative. The department will assess progress reports provided by the state and territories and assess progress under two National

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Section 2 – Department Outcomes – 13 Acute Care

Partnership Agreements (Improving Public Hospital Services and Hospital and Health Workforce Reform). The department will also continue to support the Cross-Jurisdictional Clinical Advisory Group in their development of the definition of the clinically appropriate exception to be applied to the Four Hour National Access Target.

On 13 February 2011, COAG agreed to the establishment of an expert panel to consider the mechanisms through which these elective surgery and emergency department measures are to be implemented and applied. The panel will report to COAG prior to 1 July 2011. The Australian Government is responsible for establishing the panel and the department is providing it with administrative and technical support. The panel is to provide advice to COAG over the life of the National Partnership Agreement, advising on the timing and phasing for the introduction of elective surgery and emergency department targets and any changes due to safety issues and practical impediments.

Expand subacute care capacity

Building on its reforms to ensure care is better integrated across public hospitals, primary health care and aged care, the Australian Government is making further investments in subacute care as part of the new Subacute Beds Guarantee. The provision of additional subacute care beds will ensure patients are cared for in the most appropriate setting by providing patients who still require medical care, but could be better treated in different hospital settings or a community setting, with access to the services they need. In 2011-12, the Australian Government will provide funding to states and territories to deliver and operate over 1,300 new subacute beds in hospital and community settings nationally from 2010-11 to 2013-14. This initiative will improve patient health outcomes, functional capacity and quality of life by supporting rehabilitation, palliative care, mental health and geriatric services in both hospital and community settings. The department will monitor the performance of states and territories against implementation plans as required by the National Partnership Agreements on Hospital and Health Workforce Reform and Improving Public Hospital Services.

To better support people in rural and remote areas, the Australian Government will also provide capital funding for states and territories to establish 286 new subacute beds or bed equivalents in Multi-Purpose Services across Australia. This funding will be used to provide new beds through new construction, refurbishment or renovation projects in new or existing Multi-Purpose Service facilities, or to purchase equipment to enable increased delivery of subacute care services. In 2011-12, the department will work with states and territories to finalise project plans and monitor progress towards delivery of these new subacute beds. The additional subacute beds in Multi-Purpose Services will allow longer stay patients to be discharged earlier to more appropriate care settings closer to home.

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Budget Statements – Department of Health and Ageing

Improve access to public dental services

The Australian Government has committed to reforming dental care services, including introducing the Commonwealth Dental Health program and the Medicare Teen Dental Plan and piloting new mobile dental facilities for Aboriginal and Torres Strait Islanders.

The Australian Government announced its intention to close the Medicare Chronic Disease Dental Scheme and make funding available for the Commonwealth Dental Health Program. However, without the support of the Senate, the Government has been unable to pass the necessary subordinate legislation to close the scheme.8

Under the Commonwealth Dental Health program, the Australian Government will fund state and territory governments for up to one million additional public dental services over three years, and to provide nationally comparable health data for future improvements to public dental services. These additional services will reduce public dental waiting lists and provide priority treatment for people who have chronic conditions relating to their oral health, Indigenous Australians and preschool children.

In 2009-10, the Australian Government provided funding for mobile Indigenous dental pilot projects. The department is developing a series of projects to test models of dental service delivery to Indigenous communities in rural and regional areas of Australia. These projects use transportable equipment and mobile staff. In 2011-12, the department will provide funding for further pilot projects identified as suitable and will engage a consultant to evaluate each pilot project and the program as a whole.

National Advisory Council on Dental Health

In 2011-12 the Australian Government will establish a National Advisory Council on Dental Health which will provide advice to the Minister for Health and Ageing on options to address identified priority areas for dental health. The council will be a non statutory, time-limited body and is expected to meet around four times during 2011-12.

For further information on other activities the Government will undertake to support dental health in 2011-12, refer to Program 3.1 – Medicare services and Program 12.1 – Workforce and rural distribution, in these Portfolio Budget Statements.

Improve health care services in Tasmania

The Australian Government aims to improve health care services for people in the north-west region of Tasmania by funding the Tasmanian Government to operate the Mersey Community Hospital at Latrobe. Through an agreement covering the period 1 September 2008 to 30 June 2011, the Government ensured that people in the hospital’s catchment area within the north-west region of Tasmania continued to have access to safe, appropriate and sustainable health care services, including a high dependency unit, a 24 hour emergency service, medical and surgical services, 8 For further discussion on the Medicare Teen Dental Plan and Medicare Chronic Disease Dental Scheme, refer to

Outcome 3 located within these Portfolio Budget Statements.

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and low risk obstetric and paediatric services. Arrangements for future funding will be finalised before the current agreement expires on 30 June 2011.

As part of the redevelopment of the Royal Hobart Hospital, the Australian Government is providing $100 million towards commencement of the construction of the Women’s and Children’s Hospital in Hobart in late 2010. The Australian Government will provide further funding from the Health and Hospitals Fund to deliver an enhanced acute care facility with a significantly increased service capacity to meet the health needs of a regional population. In 2011-12, the department will monitor the progress of the construction.9

Program 13.3 is linked as follows:

• This Program includes National Partnership payments for: – Elective surgery waiting list reduction; – Health Services - Helping public patients in public hospitals waiting for nursing

homes; and Tasmanian health package – patient transport and accommodation services;

Health Care Grants for the Torres Strait – Hospital and Health Workforce Reform - Activity based funding;

– Improving Public Hospital Services - New subacute hospital beds, flexible funding for emergency departments, elective surgery and sub-acute care, four hour national access target for emergency departments – capital funding, and facilitation and reward funding, improving access to elective surgery – capital funding and facilitation and reward funding;

– Expansion of Subacute Care in Multi-Purpose Services - capital funding for new subacute care beds in multi-purpose services;

– Health Infrastructure - Commonwealth contribution to the construction of the Women’s and Children’s Hospital in Hobart, upgrading chemotherapy and cancer facilities in North West Tasmania, and Commonwealth contribution to the upgrade of the Grafton Base Hospital.

These payments are paid to state and territory governments by The Treasury as part of the Federal Financial Relations (FFR) Framework. For budget estimates relating to the National Partnership component of the program, please refer to Budget Paper 3 or Program 1.10 of the Treasury Portfolio Budget Statements.

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Program 13.3 Expenses Table 13.11: Program Expenses

2010-11 2011-12 2012-13 2013-14 2014-15Estimated Budget Forward Forward Forward

actual year 1 year 2 year 3$'000 $'000 $'000 $'000 $'000

Annual administered expensesOrdinary annual services 95,098 145,090 144,629 142,975 143,627

Program support 41,295 39,630 63,059 61,124 58,409

Total Program 13.3 expenses 136,393 184,720 207,688 204,099 202,036 9 For further discussion on the Health and Hospitals Fund, refer to Outcome 10 located within these Portfolio

Budget Statements.

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Budget Statements – Department of Health and Ageing

Program 13.3: Deliverables The department will produce the following ‘deliverables’ to achieve the objectives of Program 13.3.

Table 13.12: Qualitative Deliverables for Program 13.3

Qualitative Deliverables 2011-12 Reference Point or Target

Produce relevant and timely evidence-based policy research

Relevant evidence-based policy research produced in a timely manner

Stakeholders participate in program/policy development

Stakeholders participate in program development through avenues such as regular consultative committees, conferences, stakeholder engagement forums, surveys, submissions on departmental discussion papers and meetings

National Health Reform

Establish the Independent Hospital Pricing Authority

The Independent Hospital Pricing Authority is established in a timely manner

Establish the National Health Performance Authority

The National Health Performance Authority to be established by 1 July 2011

Distribute health system performance information

Two Hospital Performance Reports to be prepared in 2011-12

Improve public hospital accountability and management

First group of Local Hospital Networks established

First group of Local Hospital Networks commence operation from July 2011

Establishment of the national and local Lead Clinicians Groups

National and first local Lead Clinician Groups operational from July 2011

Increasing efficiency and capacity in public hospitals

Implement a new non-admitted outpatient care national data set specification, to enable national reporting of performance

Phase 1 of the non-admitted outpatient care data set specification expected to be endorsed for implementation by the Australian Government and state and territory governments from 1 July 2011

Provide financial contribution to state and territories to support the delivery of initiatives

Payments to state and territories are made in a timely manner

Improve access to public dental services

Implement the Mobile Indigenous Dental Pilot projects

Mobile Indigenous Dental Pilot projects commence in a timely manner

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Section 2 – Department Outcomes – 13 Acute Care

Qualitative Deliverables 2011-12 Reference Point or Target

Improve health care services in Tasmania

Continued monitoring of the Mersey Community Hospital agreement with Tasmania

Effective oversight of agreement for management and operation of Mersey Community Hospital

Table 13.13: Quantitative Deliverables for Program 13.310

Quantitative Deliverables

2010-11 Revised Budget

2011-12 Budget

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Percentage of variance between actual and budgeted expenses

≤0.5% ≤0.5% ≤0.5% ≤0.5% ≤0.5%

Program 13.3: Key Performance Indicators The following ‘key performance indicators’ measure the effectiveness of Program 13.3 in meeting its objectives thereby contributing to the outcome. Table 13.14: Qualitative Key Performance Indicators for Program 13.3

Qualitative Indicator 2011-12 Reference Point or Target

National Health Reform

Establish the Performance and Accountability Framework and the Hospital Performance and Healthy Communities Reports

Obtain agreement with the participating states and territories, through COAG, to the design of the Performance and Accountability Framework and the Reports

Improve public hospital accountability and management

Increase responsiveness to local health needs through Local Hospital Networks

Reports against standards and targets will be provided to the National Hospital Performance Authority

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10 The deliverable ‘Percentage increase in the volume of subacute care services provided in community settings and

public hospitals by the states and territories’ has been moved to the key performance indicators section as it is a better measure of the effectiveness of the new subacute care arrangements. The deliverable ‘Number of additional public dental visits delivered by the states and territories above agreed baseline. Measured by a reduction in state and territory public dental waiting list for priority groups assisted (Commencement date subject to Senate decision)’ has been moved to the key performance indicators section as it is a better measure of the effectiveness of the Commonwealth Dental Health Program.

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Budget Statements – Department of Health and Ageing

Qualitative Indicator 2011-12 Reference Point or Target

Increasing efficiency and capacity in public hospitals

Patients receiving better and more timely care in public hospitals

Implement elective surgery and emergency department targets agreed by COAG on the advice of the Expert Panel

Private hospitals report against a national private hospital establishment data collection

Acceptance by the private hospital sector of new Private Hospital Establishment Data Specifications as a National Minimum Data Set

Enhanced provision and improved mix of subacute care services for hospital and out-of-hospital care

States and territories reporting demonstrates enhanced provision and improved mix of services

Improve health care services in Tasmania

Core clinical services that are specified in the agreement for the management, operation and funding of the Mersey Community Hospital continue to be provided by the hospital

Analysis of data provided under the agreement demonstrates that the agreed services are being provided

Table 13.15: Quantitative Key Performance Indicators for Program 13.3

Quantitative Indicators

2010-11 Revised Budget

2011-12 Budget Target

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Increasing efficiency and capacity in public hospitals

Percentage of elective surgery patients seen within the clinically recommended time11

N/A 80% 85% 90% 95%

Additional subacute beds12 329 331 328 328 N/A

11 This is an indicative average of three elective surgery categories across all jurisdictions which have varied targets.

These figures may change following the Expert Panel’s advice to COAG. 12 These figures are the targets under the National Partnership Agreement on Improving Public Hospital Services.

Previously, the National Partnership Agreement on Health and Hospital Workforce provided targets for the increase of services in each state and territory - 20% over the 4 years of the Agreement from 2009-10 to 2012-13.

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Section 2 – Department Outcomes – 13 Acute Care

2011-12

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Quantitative Indicators

2010-11 Revised Budget

Budget Target

2012-13 Forward Year 1

2013-14 Forward Year 2

2014-15 Forward Year 3

Improve access to public dental services

Number of additional public dental visits delivered by the states and territories above agreed baseline. Measured by a reduction in state and territory public dental waiting list for priority groups assisted (Commencement date subject to Senate decision) 13

N/A 333,000 333,000 333,000 N/A

13 The Commonwealth Dental Health program is funded for three years and is not ongoing.

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Budget Statements – Department of Health and Ageing

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