An audit of the management of Federal funding of public hospital services in the States and Territories has found that risk management and data monitoring had been implemented as required but public reporting had not.
In his report, Australian Government Funding of Public Hospital Services — Risk Management, Data Monitoring and Reporting Arrangements, Auditor-General Grant Hehir examined the processes covered by the 2011 National Health Reform Agreement (NHRA), finding that that Agreement established two ‘national bodies’ to provide independent hospital pricing and health funding.
“The integrity of key processes in both entities are highly reliant on the accuracy and completeness of State public hospital cost and service activity data,” Mr Hehir said.
He said that both the Independent Hospital Pricing Authority and the National Health Funding Body had effectively implemented the risk management and monitoring arrangements required under the NHRA but “failure to implement the agreed reporting at the Local Hospital Network level has weakened the NHRA’s ability to drive systematic improvement in the performance of public hospitals across Australia.”
He said transparency relating to the fulfilment of State Governments’ funding commitments “could be improved”.
“Estimates of the number of public hospital services delivered by individual Local Hospital Networks are reported (but) the actual number of services are only reported at the aggregated national level,” Mr Hehir said.
“The absence of the originally intended Local Hospital Network level performance reporting has weakened the reporting framework’s ability to achieve associated performance improvement objectives under the NHRA.”
He said that agreement had also not been reached on an approach to manage the risks of the Federal Government making duplicate payments for the same public hospital service.
“Recent work indicates that these payments may be in the range of $172 million to $332 million per year,” Mr Hehir said.
He made three recommendations for the Department of Health and the two new entities to consider, each of which was agreed.
The Auditor-General’s 81-page report can be accessed at this PS News link and the audit team was Angus Martyn, Renee Hall, Michael Jones, Ailsa McPherson, Danielle Page, Paul Bryant and Julian Mallett.
