Bureaucratic strangulation of Australian public hospitals set to get worse

By Dr Jeremy Sammut

The key insight into the hospital crisis is that the public hospital system exhibits all the systemic failures typically experienced by stultifying Soviet-style monopolistic, central plan bureaucracies.

So-called reforms that tinker with the scale of the bureaucracy will never fix the fundamental problem, which is the faulty way state governments have chosen to run public hospitals.

The federal government’s National Health and Hospitals Networks Plan will not devolve operational management to the local level as promised because the state bureaucracies are still in control of the overall management and funding of the system.

Creating ‘local hospital networks’ staffed by seconded state bureaucrats will only impose an additional layer of bureaucracy. Bribing the states with billions of extra taxpayers’ dollars to sign up to a national agreement that does not significantly alter the existing administrative arrangements, other than making them more complex and confused, is a betrayal of hospital staff, patients and voters, who deserve and expect better.

The only way forward is to unshackle public hospitals from the bureaucracies that otherwise will continue to restrict the hospital system’s ability to meet the health needs of the community.

Abolition of the bureaucracy can only be accomplished if administrative responsibility for each public hospital is devolved to autonomous boards of directors.

But hospital boards are only the first step. It is not a quick fix.

Genuine hospital reform requires genuinely responsible federalism and genuine local autonomy and accountability. Judicious use of financial levers and competitive pressures, combined with managerial flexibility, must drive improved performance and the return on each health dollar spent on public hospitals.

Administrative reform must therefore occur in tandem with comprehensive structural and funding reform to transform public hospitals into what they are not: independent, competing, consumer-oriented, and financially accountable.

Rather than be mired in the usual political wrangling about the problems in the health system, policymakers must focus on policy details that all credible reform plans must contain.

The above is a press release from the Centre for Independent Studies, dated 22 October. Enquiries to cis@cis.org.au. Snail mail: PO Box 92, St Leonards, NSW, Australia 1590.

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