We need an Australian Healthcare Reform Commission

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The Myth in the Desert

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We need an Australian Healthcare Reform Commission

Jon Blackwell and Kerry Goulston write in Pearls and Irritations

With a new Government it is time for Health System Reform. In fact reform is long over due.

For some years now the Sydney Health Reform Group has been calling for the establishment of an Australian Healthcare Reform Commission, and the necessity for the establishment of such a body has never been more pronounced than it is today.

The response to the Covid pandemic has required co-ordinated responses, and whilst the Australian Healthcare System has responded largely appropriately and effectively, there are undoubtedly issues and significant room for improvement.

Australia also now has a new government, and with any change of government come opportunities to take fresh approaches and review and revise systems.

The need for change

It could be said that over years the Australian health system has become fractured and dysfunctional, characterised to a large extent by conflict and competition for limited resources and political point scoring.

Despite our effective response to Covid, the Australian healthcare system is not working well. The mixed model of health funding from the Commonwealth, State and private sectors leads to opaque financial arrangements at best and encourages creative cost shifting and manipulation by health providers at other times, and rapidly rising out of pocket expenses for patients.

But there are many models around the world from which we could learn.

Denmark has been recognised as a world leader in healthcare reform over the past decade or so. It has a population of 5.7 million people compared with 8 million in NSW of whom 5.1 million live in the Greater Sydney Area (March 2019). Denmark has a land area of 42,933 km2, compared with 809,444 km2 in NSW, and whilst there are clear differences in geography, we have previously argued (insert link to previous paper here) that these cannot totally justify the difference in the comparative reliance on hospital-based care between the two systems. At last count there were 220 hospitals in NSW and 21 in Denmark.

It was recognised early in the Danish reform process that sweeping change to their system was imperative, given that the population was ageing and that there was a consequent increase in chronic disease and multiple morbidities.

It was considered that radical change was possible; but that change should be fundamentally based on evidence, and that clinicians, patients, carers and families and the population at large should be involved from the beginning. As an example, “citizen juries” were presented with the evidence and came to conclusions. This enabled a fundamental shift in power away from vested individual and group interests, which would have inevitably been disposed to militate against the required radical changes. The influence and power of the bureaucracy was also tempered.

In Australia access issues abound for those in lower socio-economic groups. There are particular problems with accessing dental and mental health services and the flow-on effects on overall patient health are significant. Poorer people have virtually no access to timely dental services. There are also serious issues in the aged care/disability sectors in relation to community-based services. The ageing population is exacerbating these issues and creating pressure on hospital-based services, in particular Emergency Departments.

The growing trend for many specialists to charge fees well in excess of the Commonwealth Medicare Benefits Schedule, has the effect of delaying or denying basic services to those who have chronic conditions, but limited financial resources.

GPs are also under pressure and Nurse Practitioners could be much better utilised (as they are in the UK and USA), to use their expertise in GP surgeries in multi-disciplinary models of care. There needs to be significant examination of more appropriate funding models including looking at population-based funding rather than fee for service models.

Private Health Insurance, currently subsidised by $12 bn of public funding, needs to undergo significant reform, as it is seen as unsustainable. Any further decline will put growing pressure on the public system.

It is evident that provider groups, not governments or the needs and opinions of the broader community, are effectively driving Australia’s health care system, which consistently acts in the interests of these groups. These providers include a variety of medical groups and others with strong vested interests (AMA, ADA, health unions, medical colleges, private medical and insurance groups and pharmaceutical and prosthesis manufacturers.) As such the interests of consumers and the broader Australian community are subsumed or ignored. Politicians of all persuasions are particularly susceptible to lobbying by interest groups and find it difficult to resist well-resourced lobbying and publicity campaigns.

An Australian Healthcare Reform Commission

We propose that an Australian Healthcare Reform Commission (AHRC) be established and funded by the Council of Australian Governments (COAG) as an independent statutory body as a matter of priority.

Proposed Role

To advise COAG, government and the public on reforms that will bring the Australian Healthcare System up to date and make it “fit for purpose” in the modern context.


All Australians should have access to timely and appropriate healthcare, regardless of socio-economic status and/or location. There are many factors influencing health outcomes including socio economic status and generally reduced service access in Rural/Remote areas.

Where possible patients should be treated in the community

The system should be driven by evidence rather than provider groups

The system should be cost-efficient and responsive to the evolving needs of the Australian community


This Commission would be politically and provider independent and be charged with acting in the best interests of the community as a whole and based on evidence. It should be composed of significant and trusted members of the community (not necessarily health professionals) and seek factual advice from experts (epidemiologists, health economists etc,)


In order to negate the influence and self-interest of provider groups, the AHRC should commence its work with a focussed and comprehensive public consultation process. During this period, it is recommended that there be a focus on community education in which the complexities and realities of the current health system are explained.

Following this initial phase, it may be that “Citizen Juries” composed of health professionals, consumers, and the broader community, are tasked with closer examination of particular issues.

We also believe that in order to accelerate the reform process, bids are called for the development and trials of new organisational and funding models to deliver state/commonwealth and private sector programmes on a population health basis within local health districts.

Recommendations to COAG and the Australian Government

The AHRC will make recommendations to COAG for consideration and action. Its recommendations will be transparent and made public. COAG may also refer specific issues to the AHRC for consideration


Opportunities for significant reform in the Australian health system rarely arise and should not be squandered. We argue that our system is ripe for change if we are to ensure that we use our resources in a way that promotes allocative efficiency and improved health outcomes. Further, we believe that the current political climate provides a significant opportunity for cooperative change.

We do not argue for more resources or hospital beds, but a major refocussing of our current system towards primary healthcare and prevention. Surely it is better to prevent disease, sickness and pain than to deal with the effects of these on individuals in our community.

Jon Blackwell

Jon Blackwell is an ex-British Special Forces soldier, having successfully avoided a grisly end in three tours of duty in Belfast. He then saw the light (twice), and trained as a social worker and emigrated to Australia. He became a senior health service manager in Vic, SA, WA and on the Central Coast of NSW. He also has been CEO of Workcover NSW, and, more recently, Habitat for Humanity Australia. Now retired, Jon lives in Avoca Beach where he amuses himself by attempting to surf.

Kerry Goulston

Dr Kerry Goulston AO is a retired physician and gastroenterologist. Past positions have included Associate Dean, Northern Clinical School of the University of Sydney, Royal North Shore Hospital and Inaugural Chair of the Postgraduate Medical Council of Australia and New Zealand.

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