JANUARY

AUSTRALIA
Hospital funding is set through policy decisions by the federal government, with states required to manage
funding within their budgets.
Through the 2015–2016 budget, the federal government also consolidated the back-office functions of a
number of its health agencies to generate AUD106 million (USD69 million) in savings. Beyond these measures,
the major control is through the capacity constraints of the health system, such as workforce supply.
What major innovations and reforms have been introduced?
In 2015, the federal government announced a number of reforms to primary care, including implementation of
the aforementioned PHNs and the MBS Review. In addition, the government has established the Primary Health
Care Advisory Group to consider innovations to funding and service delivery for people with complex and
chronic illness, including mental health. Together, these three reforms seek to ensure that primary care is being
delivered efficiently and effectively and that Medicare is put on a sustainable funding trajectory. The group’s
advice, which was submitted to the government at the end of 2015, will consider how to best utilize the PHNs.
The government is also reforming care for the aging. In addition to the implementation of the Commonwealth
Home Support program outlined above, a new funding model is pursued whereby allocations will be made
directly to consumers based on their care needs instead of directly to service providers, affording them greater
choice in providers and stimulating provider competition. This reform will take effect in February 2017.
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The Commonwealth Fund