NSW Premier Chris Minns has now established the Special Commission of Inquiry into Healthcare Funding that formed a key election promise. Mr Richard Beasley SC has been appointed as Commissioner of the Inquiry.

The Letters Patent establishing the Inquiry were issued on 24 August 2023 with a view to having the Inquiry provide a final report by 24 August 2024.

The purpose of the inquiry is to conduct a holistic review of the funding of health services in NSW. As part of the comprehensive review, the Inquiry will examine:

• NSW Health governance - the existing governance and accountability structure of NSW Health, including:
• the current operating model of the Local Health Districts, and the balance between central oversight and local decision making;
• the engagement and involvement of local communities in health service development and delivery;
• the effective implementation of state-wide reform programs and how governments can support this, as well as balancing priorities on both a system and a local level; and
• the impact of privatisation and outsourcing on the delivery of health services and outcomes.
  

• Funding models - the way NSW Health funds health services delivered in public hospitals and community settings, and the extent of its impact on supporting or preventing access to optimal health outcomes and community health programs across NSW;

• Identification of efficiencies - strategies available to NSW Health to address escalating costs, limit wastage and identify areas of improvement in financial management and enhancing accountability and efficiency;

• Procurement - opportunities to improve NSW Health procurement process and practice;

• Staffing - the capacity of the current NSW health workforce, and its future capabilities. This includes inquiring into the distribution of health workers across NSW, existing skills shortages, factors impacting on staff retention, and employment standards;

• Specialist training programs - current education and training programs for specialist clinicians and their sustainability to meet future needs; and

• Innovation - new models of care and technological and clinical innovations, including funding innovation.

The NSW Minister for Health and Regional Health, Ryan Park MP stated, “This inquiry is about taking a once in a generation look at how our health system is funded so we can ensure patients and our essential healthcare workers are getting the support they need.”

With the NSW Health budget sitting at over $30 billion a year, healthcare spending represents the biggest area of public expenditure for NSW. However, there remain significant challenges for the sector, including in relation to costs and staffing pressures, partly due to issues arising from the COVID-19 pandemic that are yet to be resolved.

Submissions and public hearings

The Inquiry accepted submissions from health sector representative bodies, service providers, health staff and practitioners, and the general public up until the end of October with the submissions intended to guide the work of the Inquiry. Close to 200 submissions have been made publicly available on the Inquiry’s website and include submissions from key healthcare sector players including practitioners (such as the Senior Medical Staff Council SCH), private and public hospital providers (including LHDs), and not for profit organisations that operate in the healthcare space (such as the Ronald McDonald House Charities).

The Inquiry has so far held four days of public hearings involving evidence presented by:

• Dr Nigel Lyons, Special Advisor, NSW Health
• Dr Kerry Chant AO PSM, Chief Health Officer and Deputy Secretary, Population and Public Health
• Ms Deb Willcox AM, Deputy Secretary, Health System Strategy and Patient Experience

Their evidence primarily concerned their joint report that was presented to the Inquiry, available here (Joint Report).

The Joint Report indicates it is introductory in nature and focuses on the Terms of Reference from the point of view of the system manager (NSW Health). It provides a detailed overview of the funding and operation of the health system in NSW. While the Joint Report indicates that health service provision and funding have faced some challenges in recent years, and will continue to do so as demographics change, it does not advocate for broad scale changes which it sees as disruptive, pointing to the relative stability of arrangements in NSW as a strength of the system over the past 10 years (para 58).

From a funding perspective, the Joint Report identifies COVID-19, inflation and changing demographics as key areas of funding pressure. It suggests that funding may benefit from an increased focus on outcomes rather than activity in terms of allocation of funding (paras 156-157) and that funding models do not effectively support delivery of innovative and new models of care (para 200). NSW Health sees one solution as fast tracking integrated funding models to support care in the community and moving away from activity based funding (para 205).

The Joint Report indicates NSW Health is seeking to facilitate care being provided outside hospital settings including by general practitioners. However, new funding models need to reflect the care demanded by the community, with NSW Health noting that there is a lack of social licence to implement alternative models of service delivery (para 207) with a demand for a doctor-led, hospital-based system with surgical intervention (para 208). A solution proposed in this regard is the development of health hubs to integrate care provision to respond to local care needs (para 212).

The Joint Report discusses issues that go to the core of the operation and funding of the health system in NSW and presents creative and tangible solutions to some of the issues identified. Given that the authors expressed that the Joint Report will be discussed in further detail throughout the Inquiry it will be interesting to see how the ideas are developed and possibly challenged by further evidence presented to the Inquiry.

As stated by Counsel Assisting, Ed Muston SC, ‘the health system is a very large and very complex beast, and its challenges are many and varied’.

We will continue to monitor the inquiry and report on its findings and outcomes.