A model health system for Australia: Menzies Centre for Health Policy launched

3 March 2006

To address the emerging challenges for the Australian health system, a former Commonwealth health secretary prescribes the handing of all health funding to the Commonwealth, the strengthening of primary care, the establishment of hospitals that are centres of excellence for particular treatments, the use smart cards to monitor patient data and encouragement for private health insurance to act as a competitive alternative to the public system.

These are among the proposals to improve the efficiency and equity of the health system outlined in a lecture today by the former secretary of the Commonwealth Department of Health and Ageing, Mr Andrew Podger, at the launch of the Menzies Centre for Health Policy in Canberra. The Menzies Centre for Health Policy is a joint venture between the University of Sydney and The Australian National University.

The Menzies Centre for Health Policy is an independent think-tank, established to examine the performance and community expectations of the nation’s health system.

The Centre will undertake research in the fields of health systems financing and the effects of spending priorities on the equity and the appropriateness in health care, investigate what health care is provided in Australian hospitals and in primary care – and its effects for example in medication prescribing, with the aim of providing better patient care.

Education and communication will be key parts of the centre’s activities. It will sponsor regular seminars, lectures and education programs and will participate in masters degree coursework and PhD programs. The centre will also provide expert commentary on government health spending priorities for the public and technical media.

In his address, Mr Podger said that the biggest problems facing the health system are a lack of patient-oriented care – particularly for patients with chronic disease, the aged and Indigenous people; inefficiencies in moving resources across system boundaries; poor use of information technology; and a lack of competition.

“There are some sensible, practical incremental improvements [to the current system] that can and should be made, but I would like to see the national government also grasp the nettle to accept full financial responsibility,” Mr Podger said.


In his wide-ranging paper, Mr Podger details how this systemic reform could be achieved. 'It would not be easy, but with commitment and resources it could be done within three to five years,' he said.

Working within the Commonwealth ‘funder’ model would be regional health areas smaller than the states, with the possibility of sub-regional arrangements to assist community responsiveness. These regional arrangements would be the key to improving allocational efficiency both within and across regions.

The funding system should be split into the funder (Commonwealth), purchasers (Commonwealth regional health areas) and providers (private doctors and other health professionals and public, charitable and private hospitals etc.)

Other proposals in the paper include:

• Multi-skilled GP practices, supported by nursing staff and linked with allied health professionals and specialists.
• Hospitals as centres of excellence for particular procedures and activities.
• Hospitals working more closely with GP’s and other non-hospital providers to reduce the need for hospital care, and to explore with the regional purchasers hospital outreach services.

Mr Podger suggests an in-principle agreement with the states would be the starting point for health system reform based upon a sufficiently detailed proposition about the financial transfers involved. Subsequently a dedicated project team under COAG, with bilateral task forces, would need to do detailed work.

“The model I propose would be more patient focussed than the one we have, but would also have in-built incentives to improve efficiency. It would also more effectively address equity, in my view, giving more resources to regions and communities (including Indigenous communities) that most need additional support,” he concluded.

The Menzies Centre for Health Policy was launched by the Governor-General of the Commonwealth of Australia, His Excellency Major General Michael Jeffery AC CVO MC, this afternoon. Co-directors of the Menzies Centre, Mr Robert Wells, from ANU, and Professor Stephen Leeder, from the University of Sydney was also present at the ceremony.

Contact: Jake O'Shaughnessy
Phone: +61 2 9351 4312 or 0421 617 861