As presented in Chapter 1, public sector reform is not unique to Australia and has been introduced in other OECD countries including the United Kingdom, Canada
and New Zealand over the past two decades, Palmer and Short (1999). Government initiated reform in the Australian public sector has seen dramatic structural changes in the health sector. Victoria’s Health to 2050: Developing Melbourne’s Hospital Network (Department of Health and Community Services, 1995) identified the need for a new model of health provision. The report attempted to provide the basis for a strategic framework in recognition of the accelerated pressures of new technology, an ageing population and reduced commonwealth and state funding. The
implementation of a new model of health provision can be broken down into three phases.
3.4.1 Phase 1:
One of the key recommendations saw the creation of The Metropolitan Hospital’s Planning Board in February 1995, who oversaw the implementation or creation of seven metropolitan Health Care Networks. In short, this meant a radical change from the thirty-five existing independent hospitals to seven large networks comprised of hospitals grouped and merged according to geographical proximity. This government reform and amalgamation of resources was a part of the then Liberal state
government policy and was also implemented in other sectors including local
government and education. The purpose of these amalgamations, ‘merges’ or in this instance the creation of healthcare networks, was to combine resources and centralise the governance and management of a group of hospitals into one, with the aim of reducing costs and providing a regional rather than local health service.
A similar model was also introduced after a comprehensive restructure of the New South Wales health system, with one hundred urban state Hospital Boards replaced
by twenty-three Area Health Service Boards in the late 1980s. Following further reform, this was reduced to seventeen Health Services in NSW (NSW Department of Health and the Health Services Association of NSW, 2002).
This major restructure of hospitals and access to health care also saw a dramatic change in governance structures with a move from independent Hospital Boards of Management, to seven Victorian Health Care Network Boards of Directors. Each of the network directors were now appointed by the Minister and remunerated for their time and service, the criteria for appointment being based on the professional and commercial experience and expertise they offered in relation to the skill requirements and identified needs of each Board (see Appendix 1).
The newly configured health service Boards are in contrast to their previous
Committee of Management counterparts, who were selected for their prominence in the local community, and most often primarily composed of current or retired medical personnel including surgeons, specialists and local general practitioners. This was the beginning of a shift in both the composition of and expectations and duties of directors, with an emphasis on a business orientation and performance.
3.4.2 Phase 2
The seven metropolitan health networks were reaggregated into twelve Health Care Services with the introduction of the Health Services (Governance) Act 2000 (see Appendix 7). This Act amended the Health Services Act 1988 to allow the disaggregation of several health care networks and further reorganisation and restructure of metropolitan public health care agencies. The creation of this new
legislation followed a Ministerial Review in 1999 - The Duckett Review. The aim of the review was to identify savings of eighteen million dollars per annum and to establish new governance and management structures. During the period 1995 - 2000, four community hospitals were closed, signalling that performance and economic viability were essential for organisational survival.
3.4.3 Phase 3
With a change in the term 'networks' to 'health services' and further reconfigurations, the current Victorian metropolitan public hospital system consists of twelve health services. The twelve health services could be described as demographic clusters of hospitals and health centres and in some cases include up to five hospitals and health care centres serving the surrounding communities. The legislative framework for the metropolitan hospital networks is the Health Services Act 1988. As stated earlier, the Health Services (Governance) Act 2000 was introduced to dissagregate some of the existing networks and the establishment of new health services. Table 3.1 lists the current Victorian Health Services and the hospital and centres that make up each service.
Table 3. 1 Victorian Metropolitan Health Services
Metropolitan Health Services Hospitals/Health Centres
Austin Health Austin Campus, Repatriation Campus,
Royal Talbot Rehabilitation Centre
Bayside Health Alfred Hospital, Caulfield Medical Centre Sandringham & District Memorial Hospital Dental Health Services Victoria
Eastern Health Angliss Health Service, Box Hill Hospital, Maroondah Hospital, Peter James Centre, Yarra Ranges Health Service
Northern Health Broadmeadows Health Services, Bundoora
Extended Care Centre, Northern Hospital Peninsula Health Frankston Hospital, Mt Eliza Aged Care &
Rehabilitation Service, Rosebud Hospital Peter MacCallum Cancer Institute
Melbourne Health Royal Melbourne Hospital, Melbourne Extended Care & Rehabilitation Service Royal Victoria Eye and Ear Hospital
Southern Health Dandenong Hospital, Hampton Rehabilitation Hospital, Kingston Centre, Monash Medical Centre-Clayton, Monash Medical Centre- Moorabbin, Cranbourne Integrated Care Centre
Western Health Sunshine Hospital, Western Hospital,
Williamstown Hospital
Women’s and Children’s Health Royal Children’s Hospital, Royal Women’s Hospital
Source: Adapted from the Victorian Public Hospital Governance Reform Panel Report, August 2003, p.16.
3.5 DIFFERENCES BETWEEN PRIVATE and PUBLIC SECTOR