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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
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Independent Hospital Pricing Authority, which will be established as soon as
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possible.
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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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     2011-12
                                                                    Estim ated Estim ated
                                                                        actual1 expenses 1
                                                                          $'000      $'000
Program 13.1: Blood and organ donation services 2
  Administered expenses
    Ordinary annual services (Appropriation Bill No. 1)                12,865        9,979
    Special appropriations
      National Health Act 1953 - Blood fractionation, products
         and blood related products - to National Blood Authority     613,409     646,003
  Departmental expenses
    Departmental appropriation3                                          5,030       4,794
    Expenses not requiring appropriation in the budget year 4              124         152
  Total for Program 13.1                                              631,428     660,928
Program 13.2: Medical indem nity
  Administered expenses
    Ordinary annual services (Appropriation Bill No. 1)                   157         163
    Special appropriations
      Medical Indemnity Act 2002                                      108,700     117,200
      Midwife Professional Indemnity
         (Run-off Cover Support Payment) Act 2010                        5,000           -
      Midwife Professional Indemnity
         (Commonwealth Contribution) Scheme Act 2010                     1,709       3,244
  Departmental expenses
    Departmental appropriation3                                          1,341       1,278
    Expenses not requiring appropriation in the budget year 4               33          41
  Total for Program 13.2                                              116,940     121,926
                                                    2
Program 13.3: Public hospitals and inform ation
  Administered expenses
    Ordinary annual services (Appropriation Bill No. 1)                95,098     145,090
  Departmental expenses
    Departmental appropriation3                                        40,304       38,408
    Expenses not requiring appropriation in the budget year 4             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.)
    Outcom e 13 totals by appropriation type
      Administered expenses
        Ordinary annual services (Appropriation Bill No. 1)                                    108,120          155,232
        Special appropriations                                                                 728,818          766,447
      Departmental expenses
        Departmental appropriation3                                                             46,675            44,480
        Expenses not requiring appropriation in the budget year 4                                1,148             1,415
      Total expenses for Outcom e 13                                                           884,761          967,574

                                                                                               2010-11          2011-12
    Average staffing level (num ber)                                                               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
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     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    2014-15
                                Estim ated       Budget        Forw ard   Forw ard   Forw ard
                                    actual                       year 1     year 2     year 3
                                     $'000             $'000      $'000      $'000      $'000
Annual administered expenses
  Ordinary annual services            12,865           9,979     11,895     12,120     12,178
  Special appropriations
    National Health Act 1953 -
       Blood fractionation, products
       and blood related products -
       to National Blood             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       Relevant evidence-based policy research
policy research                                  produced in a timely manner
Stakeholders participate in program/policy       Stakeholders participate in program
development                                      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     Agreed collection and banking strategies
the National Cord Blood Collection Network       implemented

Support access to blood and blood products

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




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                                      Section 2 – Department Outcomes – 13 Acute Care



Table 13.4: Quantitative Deliverables for Program 13.1

                           2010-11                 2012-13     2013-14      2014-15
     Quantitative                      2011-12
                           Revised                 Forward     Forward      Forward
     Deliverables                      Budget
                           Budget                   Year 1      Year 2       Year 3

Percentage of variance
between actual and          ≤0.5%       ≤0.5%        ≤0.5%       ≤0.5%        ≤0.5%
budgeted expenses

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
                             63%         63%             63%     63%          63%
Government, to the
approved National
Supply Plan and Budget


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

                           2010-11     2011-12     2012-13     2013-14      2014-15
     Quantitative
                           Revised     Budget      Forward     Forward      Forward
      Indicators
                           Budget       Target      Year 1      Year 2       Year 3

Improve Australians’ access to organ and tissue transplants
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Percentage of eligible
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Australians in need of a
bone marrow, cord
blood or peripheral stem    100%         100%        100%        100%         100%
cell transplant who are
able to access
appropriate treatment




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Budget Statements – Department of Health and Ageing




                                    2010-11          2011-12          2012-13          2013-14          2014-15
       Quantitative
                                    Revised          Budget           Forward          Forward          Forward
        Indicators
                                    Budget            Target           Year 1           Year 2           Year 3

Support access to blood and blood products

Percentage of
applications for funding
of new blood products                 N/A               80%              90%             100%             100%
assessed by the MSAC
in a timely manner4


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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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    2014-15
                               Estim ated      Budget        Forw ard   Forw ard   Forw ard
                                   actual                      year 1     year 2     year 3
                                    $'000            $'000      $'000      $'000      $'000
Annual administered expenses
  Ordinary annual services             157            163        175        150        150
  Special appropriations
    Medical Indemnity Act 2002     108,700         117,200    126,400    136,800    136,300
    Midwife 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                  Relevant evidence-based policy research
policy research                                             produced in a timely manner
Stakeholders participate in program/policy                  Stakeholders participate in program
development                                                 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                           Timely initial contact and follow up
implementation arrangements for the fund                    consultation where this is required
Establishment of administrative                             Administrative arrangements in place
arrangements for the fund
Participate and lead the process of                         Timely provision and analysis of data
developing reports that are published by the
Australian Institute of Health and Welfare
on medical indemnity

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Table 13.8: Quantitative Deliverables for Program 13.2

                                    2010-11                           2012-13          2013-14          2014-15
      Quantitative                                   2011-12
                                    Revised                           Forward          Forward          Forward
      Deliverables                                   Budget
                                    Budget                             Year 1           Year 2           Year 3
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Percentage of variance
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between actual and                   ≤0.5%             ≤0.5%            ≤0.5%            ≤0.5%            ≤0.5%
budgeted expenses

Indemnity Insurance Fund

Percentage of eligible
applicants receiving a                100%             100%             100%             100%              100%
premium subsidy


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




                                    2010-11                           2012-13          2013-14          2014-15
      Quantitative                                   2011-12
                                    Revised                           Forward          Forward          Forward
      Deliverables                                   Budget
                                    Budget                             Year 1           Year 2           Year 3

Percentage of eligible
midwife applicants
covered under the                     100%             100%             100%             100%             100%
Midwife Professional
Indemnity Scheme


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

Table 13.10: Key Performance Indicators for Program 13.2

                                    2010-11          2011-12          2012-13          2013-14          2014-15
       Quantitative
                                    Revised          Budget           Forward          Forward          Forward
        Indicators
                                    Budget            Target           Year 1           Year 2           Year 3

Percentage of medical
indemnity insurers who
have a Premium
Support Scheme (PSS)
contract with the
                                      100%             100%             100%             100%             100%
Commonwealth that
meet the Australian
Prudential Regulation
Authority’s Minimum
Capital Requirement
Number of doctors that
receive a premium
subsidy support under                 2,500            2,400            2,300            2,200            2,100
the Premium Support
Scheme

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
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reported on at the local level on a nationally consistent basis.
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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.
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This funding will be used to provide new beds through new construction,
                                                                                                 13



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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                                                     Section 2 – Department Outcomes – 13 Acute Care



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.

Program 13.3 Expenses
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Table 13.11: Program Expenses
                                              2010-11         2011-12        2012-13        2013-14        2014-15
                                           Estim ated         Budget        Forw ard       Forw ard       Forw ard
                                               actual                         year 1         year 2         year 3
                                                $'000             $'000        $'000          $'000          $'000
    Annual administered expenses
      Ordinary 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.


                                                          357
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        Relevant evidence-based policy research
policy research                                   produced in a timely manner
Stakeholders participate in program/policy        Stakeholders participate in program
development                                       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        The Independent Hospital Pricing Authority
Authority                                         is established in a timely manner
Establish the National Health Performance         The National Health Performance Authority
Authority                                         to be established by 1 July 2011
Distribute health system performance              Two Hospital Performance Reports to be
information                                       prepared in 2011-12

Improve public hospital accountability and management

First group of Local Hospital Networks            First group of Local Hospital Networks
established                                       commence operation from July 2011
Establishment of the national and local Lead      National and first local Lead Clinician
Clinicians Groups                                 Groups operational from July 2011

Increasing efficiency and capacity in public hospitals

Implement a new non-admitted outpatient           Phase 1 of the non-admitted outpatient care
care national data set specification, to enable   data set specification expected to be
national reporting of performance                 endorsed for implementation by the
                                                  Australian Government and state and
                                                  territory governments from 1 July 2011
Provide financial contribution to state and       Payments to state and territories are made in
territories to support the delivery of            a timely manner
initiatives

Improve access to public dental services

Implement the Mobile Indigenous Dental            Mobile Indigenous Dental Pilot projects
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                             Effective oversight of agreement for
Community Hospital agreement with                              management and operation of Mersey
Tasmania                                                       Community Hospital

                                                                              10
Table 13.13: Quantitative Deliverables for Program 13.3

                                     2010-11                             2012-13           2013-14           2014-15
       Quantitative                                    2011-12
                                     Revised                             Forward           Forward           Forward
       Deliverables                                    Budget
                                     Budget                               Year 1            Year 2            Year 3

Percentage of variance
between actual and                     ≤0.5%             ≤0.5%             ≤0.5%             ≤0.5%             ≤0.5%
budgeted expenses


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                                 Obtain agreement with the participating
Accountability Framework and the Hospital                     states and territories, through COAG, to the
Performance and Healthy Communities                           design of the Performance and
Reports                                                       Accountability Framework and the Reports
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Improve public hospital accountability and management
                                                                                                                                     13



Increase responsiveness to local health                       Reports against standards and targets will be
needs through Local Hospital Networks                         provided to the National Hospital
                                                              Performance Authority




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.

                                                          359
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                      Implement elective surgery and emergency
care in public hospitals                                       department targets agreed by COAG on the
                                                               advice of the Expert Panel
Private hospitals report against a national                    Acceptance by the private hospital sector of
private hospital establishment data                            new Private Hospital Establishment Data
collection                                                     Specifications as a National Minimum Data
                                                               Set
Enhanced provision and improved mix of                         States and territories reporting demonstrates
subacute care services for hospital and                        enhanced provision and improved mix of
out-of-hospital care                                           services

Improve health care services in Tasmania

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

Table 13.15: Quantitative Key Performance Indicators for Program 13.3

                                      2010-11            2011-12          2012-13            2013-14           2014-15
        Quantitative
                                      Revised            Budget           Forward            Forward           Forward
         Indicators
                                      Budget              Target           Year 1             Year 2            Year 3

Increasing efficiency and capacity in public hospitals

Percentage of elective
surgery patients seen
                                         N/A                80%               85%               90%               95%
within the clinically
recommended time11
Additional subacute
                                          329               331               328               328              N/A
beds12




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




                                   2010-11          2011-12         2012-13         2013-14    2014-15
       Quantitative
                                   Revised          Budget          Forward         Forward    Forward
        Indicators
                                   Budget            Target          Year 1          Year 2     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               N/A            333,000          333,000         333,000    N/A
public dental waiting list
for priority groups
assisted
(Commencement date
subject to Senate
decision) 13




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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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