Table 2 Comparison of provisions of 1989–2003 and 2003–08 Australian Health Care Agreements

Indexation

2.1% above weighted population growth applied to 83% of the grant

1.7% above weighted population growth applied to 71% of the grant

State matching

Nil

State "commits to increase its own source funding for public hospital services such that the cumulative rate of growth will at least match the cumulative rate of growth of Commonwealth funding" (Clause 11)

Scope and level of services

(State) "continues to provide services to public patients at an indicative public patient weighted separation rate of XX" (Clause 22)

"The range of services available to public patients should be no less than was available on 1 July 1998" (Clause 7(a))

Reform

The Commonwealth and Victoria recognise the need for service delivery reform and ongoing exploration of additional initiatives under a measure and share model. Victoria will work with the Commonwealth in evaluating the outcomes from the Co-ordinated Care Trials to provide information to guide future directions for the reform of health service delivery.

The Commonwealth and Victoria will consider proposals which move funding for specific services between Commonwealth and State funded programs on the basis that each proposal meets the following criteria:

• the proposal must be consistent with accepted evidence based best practice care models;

• there should be a sound basis for believing that the reform will lead to improved patient outcomes and/or more cost effective care;

• the impact of the proposal should be measurable in terms of change in services delivered and costs to the health system as a whole and to each party to this Agreement;

• if the proposal is expected to lead to net savings, these should be shared equitably between the Commonwealth and Victoria;

• the proposal should have potential to be replicated, be on a scale such that extension can be realistically tested and be evaluated in terms of such extension; and

• the proposal must preserve eligible persons' current access to Medicare Benefits Schedule services or their equivalent.

Reform proposals may result in the cashing out of State funded programs and/or Commonwealth funded programs, including the Medicare Benefits Schedule and Pharmaceutical Benefits Scheme.

Victoria and the Commonwealth are committed to working with other States to progress the reform agenda agreed by Commonwealth and State Ministers for Health on 27 September 2002. The Commonwealth considers that for its part, such reform can taken place within existing funding parameters.

In line with clause 18, the specific areas of national co-operation to deliver reform include:

(a) improving the interface between hospitals and primary and aged care services;

(b) achieving continuity between primary, community, acute, sub-acute, transition and aged care, whilst promoting consumer choice and improved responsiveness. Initial priorities for a stronger continuum of care approach will be cancer care and mental health services; and

(c) exploring setting up a single national system for pharmaceuticals across all settings.