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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.
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