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National Health Reform Amendment (National Health Performance Authority) Bill 2011

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2010-2011

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

NATIONAL HEALTH REFORM AMENDMENT (NATIONAL HEALTH PERFORMANCE AUTHORITY) BILL 2011

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

 

Amendments and New Clauses to be Moved on Behalf of the Government

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health and Ageing, the Hon. Nicola Roxon, MP)



 



AMENDMENTS TO

NATIONAL HEALTH REFORM AMENDMENT (NATIONAL HEALTH PERFORMANCE AUTHORITY) BILL 2011

 

 

OUTLINE

 

The main purpose of the amendments to the National Health Reform Amendment (National Health Performance Authority) Bill 2011 is to address a number of issues raised by states and territories with the Bill.

 

The main purpose of the National Health Reform Amendment (National Health Performance Authority) Bill 2011 is to establish the National Health Performance Authority (the Performance Authority).   

 

The amendments will involve:

  • inserting a legislative acknowledgement of the role of state and territory health ministers as health system managers of public hospitals and Local Hospital Networks (LHN), and requiring the Performance Authority to have regard to that role when performing its functions;
  • requiring the agreement of the Council of Australian Governments (COAG) before additional functions can be conferred on the Performance Authority;
  • requiring COAG agreement to the extension of the scope of the Performance Authority’s monitoring and reporting functions;
  • the amendment of the clauses containing the definition of LHNs and public hospitals to clarify that the Minister cannot unilaterally determine what is a public hospital or LHN in a state or territory;
  • modifying section 62 to provide that the Performance Authority is required to notify the relevant state/territory health minister when preparing a report showing poor performance by an LHN or public hospital for the primary purpose of assisting the relevant state/territory health minister to carry out their responsibilities as health system managers.  The Performance Authority would also be required to give a final draft report to the relevant state/territory health minister following notification of an assessment of possible poor performance by an LHN or public hospital within their jurisdiction, and invite comments, before finalising the report;
  • allowing COAG to set out policy principles and requiring that the Performance Authority must not act inconsistently with those principles when performing its functions;
  • empowering the Performance Authority to appoint the Chief Executive Officer (CEO) of the Performance Authority following consultation with the Minister, and a range of consequential amendments which transfer the Minister’s powers in relation to the CEO to the Performance Authority;
  • empowering the Performance Authority to terminate the CEO’s appointment if it is unsatisfied with his or her performance;
  • providing that the Performance Authority may not delegate its powers or functions under Part 3.7 of the Bill.  This prevents a situation where the Performance Authority could otherwise have delegated responsibility for settling such matters as the leave entitlements of the CEO to the CEO;

 

  • explicitly requiring the Performance Authority to provide a copy of the draft strategic plan to the states and territories when preparing its strategic plan and inviting each state and territory health minister to provide comments.  The Performance Authority will be explicitly required to have regard to any comments provided by state and territory health ministers in response to the invitation;
  • inserting a new clause in the secrecy and disclosure provisions in Part 3.12 to enable the Performance Authority to disclose “protected information” to state and territory ministers;
  • removing a provision enabling the Performance Authority to disclose “protected information” to the Commonwealth Treasurer; and
  • amending the transitional provisions in the Bill which relate to the appointment of the Performance Authority CEO to allow the Minister to appoint an interim CEO in the first 6 months of operation of the Performance Authority.

 

FINANCIAL IMPACT

The amendments have no financial impact.



NATIONAL HEALTH REFORM AMENDMENT (NATIONAL HEALTH PERFORMANCE AUTHORITY) BILL 2011

 

NOTES ON CLAUSES

 

Clauses (1) & (2) [Local Hospital Networks and public hospitals]

 

Clauses (1) and (2) amend the definitions of a ‘public hospital’ and ‘Local Hospital Network’ (LHN).  These amendments provide further acknowledgement of the role of states and territories as health system managers of public hospitals and LHNs by removing ambiguity in these definitions which could have resulted in them being interpreted as providing the Minister with a unilateral power to determine what was an LHN or public hospital.  The amendment clarifies the operation of these definitions by requiring that the written agreement of the relevant state/territory health minister is required before the Minister can make a legislative instrument that characterises a body as a public hospital or LHN.

 

Clause (3) to (6) [functions]

 

Clause (3) inserts a new provision which acknowledges the role of state and territory health ministers as health system managers in relation to LHNs and public hospitals.  The provision requires that the Performance Authority is to have regard to this role of state and territory health ministers in performing its functions in relation to LHNs and public hospitals.

 

Clauses (4 and 6) inserts a new requirement which provides that the Minister may only confer additional functions on the Performance Authority under proposed paragraph 60(1)(f) with the prior agreement of COAG.  Clause (6) provides that COAG is to agree to the conferral of additional functions by written resolution passed in accordance with procedures determined by COAG.

 

As it currently stands, the Bill provides that the Minister may confer additional functions on the Performance Authority without broader consultations.  The amendments are designed to better reflect the cooperative approach to health system delivery and oversight encapsulated in the Heads of Agreement - National Health Reform.

 

Clause (5) amends the provisions which allow the scope of the Performance Authority’s functions to be amended by providing that subparagraph 60(1)(a)(v) only applies to a particular body or organisation, or a class of bodies or organisations, if COAG has agreed that it should by written resolution, passed in accordance with procedures determined by COAG.

 

At present, the Bill provides that the Performance Authority’s functions include monitoring and reporting on the performance of LHNs, public and private hospitals, primary health care organisations and other bodies or organisations that provide health care services.  The Performance Authority is not currently limited as to what bodies or organisations its powers can be amended to cover.

 

Clause (7) [reports]

 

This clause amends section 62 to set out new arrangements surrounding the activities the Performance Authority will undertake in support of its reporting function.  The amendments clearly articulate the role of state and territory health ministers as system managers in relation to LHNs and public hospitals, and set out the primary object of the section to be one of providing assistance to health ministers in carrying out their role as health system managers in relation to LHNs and public hospitals.  

 

Where the Performance Authority prepares a report which shows that an LHN or public hospital is performing poorly, it must give a draft of the report to the state/territory health minister.  The provision allows the minister 30 days from receipt in which to respond to the Performance Authority.  The Performance Authority will be required to have regard to any comments provided by a state/territory health minister.

 

At present, the Bill requires the Performance Authority to provide a draft report indicating poor performance by an entity to the manager of a relevant entity, to allow contextual information to be provided which might vary an assessment of performance.  This amendment results in the consultation arrangements better reflecting the role of states and territories as health system managers for public hospitals and LHNs.

 

After relevant state/territory health ministers have been provided the opportunity to comment on a draft performance report, the Performance Authority will be required to distribute a final draft to relevant state/territory health ministers and provide a further 15 days in which to comment.  Again, the Performance Authority will be required to have regard to any comments received from a state/territory health minister.

 

The Performance Authority will also be required to provide the manager of an LHN or hospital with a copy of a report at least 15 days before completion if that report will indicate poor performance on the part of the LHN or hospital.  The final draft report is provided for information only, and does not carry with it an opportunity for the manager of an LHN or hospital to provide feedback to the Performance Authority. 

 

The amendment replaces a provision which requires the Performance Authority to distribute a copy of a draft report to the entity manager of the poorly performing LHN or hospital.  This is because the appropriate conduit for feedback on a report of poor performance of an LHN or hospital in a state or territory is through the relevant health minister as system manager.  It is expected that state and territory health ministers will organise matters within their own administrative arrangements to ensure appropriate flows of communication between LHNs, hospitals and the health minister.

 

Subsection (7) of the amended section 62 will provide the Performance Authority with a broad opportunity to consult with such persons and bodies as it considers appropriate when preparing its reports.  In the primary care space, this will allow the Performance Authority to consult directly with Medicare Locals, or with the Commonwealth Government as system manager of Medicare Locals, if a report is to indicate poor performance. 

 

Subsection (7) will also allow the Performance Authority to consult with states and territories in relation to matters which do not involve public hospitals or LHNs.  For example, some states are involved in delivering primary healthcare services in more remote locations.  This subsection will ensure that the Performance Authority can discuss a report of poor performance with the relevant health minister.

 

Subsection (8) clarifies the operation of subsection (7) by removing the obligation on the Performance Authority to provide natural justice directly to LHNs and public hospitals which are likely to be the subject of a report of poor performance.  This reflects the lines of communication preferred by state and territory health ministers, and the role of those ministers as health system managers.  As previously noted, it is expected that state and territory health ministers will organise matters within their own administrative arrangements to ensure appropriate flows of communication between LHNs, hospitals and the health minister in relation to potential reports of poor performance.

 

The removal of any obligation to provide procedural fairness is a requirement given previous decision of the High Court which would otherwise impose an obligation on the Performance Authority to provide procedural fairness regardless of whether the other provisions of the legislation attempted to limit the path of communications to that between the Performance Authority and state/territory ministers.

 

Clause (8) [functions]

 

Clause (8) inserts new section 66A, which provides that COAG may make written policy principles about the performance of the Performance Authority’s functions.  In turn, the Performance Authority is required to perform its functions in a manner that is not inconsistent with the policy principles.  The Performance Authority will be required to publish the policy principles on its website.

 

This amendment ensures that COAG retains an ability to set parameters around the operations of the Performance Authority in a way which is binding and which does not rest in the hands of a single jurisdiction.

 

The policy principles are not legislative instruments.

 

Clauses (9) to (25) and (29) [Chief Executive Officer]

 

Clauses (9) and (10) provide that the Performance Authority may not delegate any of its functions with respect to Part 3.7.  At present, section 90 of the Bill empowers the Performance Authority to delegate by writing any or all of its powers and functions (apart from those dealing with legislative instruments or providing advice to the Minister) to a Performance Authority member, the CEO, or an SES or acting SES employee.  As a consequence of amendments (9) to (25) below, the Performance Authority would otherwise have been empowered under section 90 to delegate its powers to determine terms and conditions in relation to the CEO’s employment to the CEO.  These amendments address this issue.

 

Clauses (11) and (12) provide that the Performance Authority is to appoint the Performance Authority CEO after consulting with the Minister.  The Bill as currently drafted provides for the Minister to appoint the CEO after consulting with the Performance Authority, as is common for Financial Management and Accountability Act agencies.  However, in view of the constitution and role of the Performance Authority, with members nominated by COAG and exercising functions across the Commonwealth, states and territories, the Government believes it more appropriate for the CEO to be appointed by the Performance Authority, after consultation with the Minister.

 

Clauses (13) to (25) make consequential amendments to empower the Performance Authority rather than the Minister to:

  • appoint an acting CEO;
  • provide approval for the CEO to engage in other paid employment;
  • grant leave to the CEO, other than recreation leave, and determine the terms and conditions as to remuneration or otherwise, and other terms and conditions not specified in the Act;
  • accept the CEO’s resignation;
  • after consulting with the Minister, terminate the CEO’s appointment in the event of misbehaviour, incapacity, bankruptcy, frequent absence without leave, concealing a conflict of interest or engaging in unapproved employment.

Clause (21) provides that the Performance Authority may terminate the CEO’s appointment if it is satisfied that his or her performance has been unsatisfactory.  This provision ensures consistency with subsection 45(2) of the National Health and Hospitals Network Act 2011

Clause (29) substitutes item 132 in the transitional provisions in Part 2 of Schedule 1 of the Bill in order to provide that the Minister may appoint an acting CEO by written instrument within the 6-month period beginning at the commencement of this item, so long as no previous appointment has been made.  This amendment enables the Minister to appoint an acting CEO to undertake functions in accordance with the Act to allow commencement of the Performance Authority’s activities while the members locate a suitable permanent CEO.

 

Clause (26) [strategic plan]

 

This clause inserts new subsection 112(3) which will explicitly require the Performance Authority to invite each state and territory health minister to provide comments on the Performance Authority’s draft strategic plan before it is finalised.  As it currently stands, the Bill does not include such a requirement.  The purpose of this amendment is to ensure that all jurisdictions will have an opportunity to comment on the Performance Authority’s proposed activities and guide the formation of its objectives over the life of the plan.  States will have 30 days to provide any comments on the strategic plan, and the Performance Authority will be required to have regard to any comments received from state and territory ministers.

 

Clauses (27) and (28) [secrecy]

 

Clause (27) inserts a new section 116A to provide that the Performance Authority may disclose protected Performance Authority information to the health minister of a state or territory.  The purpose of this amendment is to ensure that the states and territories have access to protected information on the same basis as the Commonwealth Health Minister.  This amendment does not oblige an official of the Performance Authority to disclose protected Performance Authority information to a state or territory health minister.  Accordingly, the Performance Authority has discretion on whether to disclose protected information.

 

Where the Performance Authority has been requested to provide protected Performance Authority information by a state or territory which relates to information originating from a different jurisdiction, it is expected that the Performance Authority will consult with the affected state or territory before disclosing such information.

 

Clause (28) removes section 117 from the Bill, which allowed the Performance Authority to disclose protected information to the Commonwealth Treasurer.  It is no longer envisaged that the Performance Authority will be required to disclose protected information to the Treasurer.