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Tensions and cross purposes in the Bennett Report

By Jeremy Sammut - posted Wednesday, 25 February 2009

Any report about a beast as complex as the Australian health system is bound to be like the Curate’s egg - good in parts. The problem with the Bennett Report is that the left hand wants to plan the future of Australian health care from the top-down and give people the services the government and select provider groups thinks they should have, while the right hand is trying to free up the system and allow precious health dollars to follow patients based on clinical need.

In some sections, the Bennett report moves away from a “command and control” approach and gives qualified support for market-based principles. In other sections, it reverts to “central planning” mode with worrying implications for the future of public hospitals.

The NHHRC has recommended:

  • scrapping the centralised bed allocation process in the “high care” aged care industry in favour of providers offering as many places as demand dictates;
  • allowing providers to charge accommodation bonds to secure much needed capital for renewal and expansion and the removal of caps on fees for residents to permit price competition;
  • activity-based payment (including the cost of capital) is endorsed as the principal method of funding public hospitals to force hospitals earn income according to the work they do and find the most cost-effective means of delivering care; and
  • possibly replacing Medicare (“Option C”) with health plans provided by private health funds, which would purchase services on their member’s behalf.

The golden thread running through these proposals is a move in the direction of “consumer-directed” health care, with the aim of making services more responsive to patient demand, and promoting allocative and technical efficiency. This is market-based reform, though the NHHRC avoids frightening the horses and does not use that label.

It’s a different story in the sections dealing with primary care. The Bennett report recommends that Medicare should fund a wider range of primary care and allied health services which should be accessed in the federal government’s planned network of “Mega Clinics”.

It argues this massive investment by the Commonwealth is justified because mega clinics will relieve the pressure on public hospitals by keeping elderly patients with complex and chronic conditions healthy and prevent them presenting at emergency departments and requiring admission to a hospital bed. More than the short-term resolution of the hospital crisis is riding on this strategy. Here, the commission is betting it knows the health services an ageing Australia is going need and the circumstances in which government should deliver them.

I’m not sure it’s right. The report contains no hard evidence the elderly are not already receiving all appropriate primary care, nor proof they are being admitted with “avoidable” conditions which access to a wider range of community-based care will prevent. In any case, the better the prevention, the older and sicker people become until they unavoidably need admission to hospital. This is already occurring, with record separations by patients aged 85 and over placing enormous pressure on emergency departments and public hospitals with insufficient numbers of staffed beds.

Maybe this is why the Commission hedges its bets and has proposed targeted funding arrangements for public hospitals to maintain adequate emergency and bed capacity to ensure prompt admission.


Cheered on the nurses union, the Federal Health Minister, Nicola Roxon, appears determined to use mega clinics as a springboard for allowing nurses to perform a wider range of Medicare-funded roles. In an admirable stand against provider group politics, the Bennett report does not support this (except in remote and rural communities experiencing extreme doctor shortages) but doesn’t fully explain why this is a bad idea.

Part of the reason the states don’t open more hospital beds right now is the shortage of nurses willing to work in wards. Creating more attractive jobs for nurses in mega clinics will exacerbate the problem, and potentially defeat the purpose of having flexible and responsive funding arrangements that are intended to allow hospital’s to increase bed capacity according to demand.

The tensions and cross purposes in the Bennett report plague all reports written by a committee. The deeper problem is the contradictory approaches the Commission has brought to the table. The result is a mix of sound policy and questionable proposals, which is confused about the appropriate direction that health reform should be heading.

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About the Author

Jeremy Sammut is a Research Fellow at the Centre for Independent Studies. Jeremy has a PhD in history. His current research for the CIS focuses on ageing, new technology, and the sustainability of Medicare. Future research for the health programme will examine the role of preventative care in the health system and the management of public hospitals. His paper, A Streak of Hypocrisy: Reactions to the Global Financial Crisis and Generational Debt (PDF 494KB), was released by the CIS in December 2008. He is author of the report Fatally Flawed: the child protection crisis in Australia (PDF 341KB) published by the CIS in June 2009.

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