The most important step to fixing the health system is curing sick hospitals

Workplace reform has helped transform the Australian economy in the past 20 years. But that workforce renewal has not touched the professions, and particularly the health sector, where jobs need substantial redesign and work processes must be significantly re-engineered. Over a period, this will deliver major productivity gains and enhanced job satisfaction, particularly for nurses. Health is Australia's largest industry and cannot be excluded from workforce reform.

Another major system problem is the divided responsibility between the Commonwealth and state governments in health. In the recent Generational Health Review in South Australia, this problem was continually raised: "It is all very well for the state government to review its health system but a major problem is the inefficiency, fragmentation, gaps, cost and blame-shifting that result from the different roles of the commonwealth and state governments in health."

Many examples were mentioned. One was the pressure on state hospital emergency departments because of inadequate funding or management of general practice services in the community. The other was the shortage of Commonwealth-funded aged-person facilities, which resulted in aged and frail persons remaining for long periods and unnecessarily and expensively in state acute hospitals. There are many other consequences of divided responsibility - delays in elective surgery in the public system because of emergency department priority; inadequate attention to prevention and disease management and poor workforce planning .The waste involved in the present divided system is well understood  and I am confident that the community would welcome a resolution of the problem. In this case, I think good health policy would be good politics as well.
 
The insiders won't fix it. They are caught in the detail and find it very convenient to blame someone else.

In my view, the best solution would be for state governments, either singly or together, to cede their health powers to the Commonwealth government to achieve a unified national health service. There is precedent and support for this.  The Kennett government ceded most of Victoria's industrial relations powers to the Commonwealth. More recently Federal Health Minister, Tony Abbott, suggested a similar arrangement in relation to health. 

It was the most sensible suggestion that I have heard in health for a long time. 

Any integration should include not only state hospitals but other state health services such as disability; Aboriginal, mental health; dental, child and youth, domiciliary care; nursing and drug and alcohol services. They must all be included in the package or the present fragmentation will continue.

A state handover of health services to the Commonwealth may be politically too difficult for some states.  A practical and feasible alternative being canvassed is to establish a joint Commonwealth/State Health Commission in any state where the two governments could agree. I envisage that the joint commission, with shared governance, would be responsible for the funding and planning of all health services in a state. Consistent with an agreed plan, the commission would then buy health services from existing providers - commonwealth, state, local, NGO and private.

I think this proposal is feasible and would have strong public support.

Perhaps more money should be spent on health in Australia but it must be clearly linked to system reform on the fundamental issues. It is time to shift our focus to the way health services are delivered and not just how they are financed.

In presenting the reports of both the 2000 NSW Review and the 2003 South Australian Review, I told ministers that our reports provided only short-term relief or bandaids. They needed to address the longer-term system failures that I have described. Those system failures are getting more obvious every day.