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Reforms to Human Services

Draft report

This draft report was released on 2 June 2017. You were invited to examine the draft report and to make a written submission or comment by Friday 14 July 2017.

The final report will be handed to the Australian Government in October 2017.

Under the Productivity Commission Act 1998, the Government is required to table the report in each House of the Parliament within 25 sitting days of receipt.

Download the overview

Download the draft report

  • At a glance
  • Media releases
  • Contents

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Key points

  • This inquiry is about finding ways to put the people who use human services, such as health care, social housing and family and community services, at the heart of service provision. This matters because everyone will use human services in their lifetime and change is needed to enable people to have a stronger voice in shaping the services they receive, and who provides them.
  • Competition and contestability are means to an end and should only be pursued when they improve the effectiveness of service provision.
    • This report sets out the Commission's proposed reforms for: end-of-life care services; social housing; government-commissioned family and community services; services in remote Indigenous communities; public hospitals; and public dental services.
    • The Commission's proposed reforms vary according to the purposes of the services in question, the settings where they are accessed and, importantly, the users themselves.
  • Each year, tens of thousands of people who are approaching the end of life are cared for and die in a place that does not reflect their choice or fully meet their end-of-life care needs. Most people who die do so in two of the least preferred places — hospitals and residential aged care.
    • More community-based palliative care services are needed to enable more people who wish to die at home to do so.
    • End-of-life care in residential aged care needs to be better resourced and delivered by skilled staff, so that its quality aligns with that available to other Australians.
  • The social housing system is broken. The current two-tiered system of financial assistance for people who live in social housing or the private rental market is inequitable, and limits tenants' choice over the home they live in. The system would be improved if a single model of financial assistance applied across social and private housing, based on an increase and extension to Commonwealth Rent Assistance.
    • Social housing should continue to provide a home for people who are not well placed to rent in the private market.
  • Family and community services are not meeting the needs of people experiencing hardship. The system is designed for the convenience of governments, not people. Practical changes to system planning, provider selection and contract management could shift the focus to improving outcomes for people who use these services.
  • Human services are not making the contribution they should be to improving the wellbeing of Indigenous people living in remote communities. Increasing contract lengths for service providers, developing better planning, evaluation and feedback systems, and improving processes for selecting and managing service providers would contribute to improving outcomes for Indigenous people living in remote communities.
  • Public hospital patients should be given greater control over the pathway leading to planned admissions. This requires removing barriers to patients choosing the outpatient clinic or specialist they initially attend when given a referral by their general practitioner. Improved public reporting on individual hospitals and specialists would support greater user choice and encourage performance improvements in hospitals.
  • Public dental patients have little choice in who provides their care, when and where, and most services are focused on urgent needs. Patients' choice and outcomes could be improved by a new payment and care model, with a focus on preventive treatments.

Key facts and figures

End-of-life care

  • About 70 per cent of Australians would prefer to be cared for and to die at home.
  • There are about 160 000 deaths each year in Australia.
  • Around half of those who die each year (80 000) die in hospitals and just over a third (60 000) die in residential aged care — two of the least preferred places to die.
  • Each year there are tens of thousands of people who would benefit from, but miss out on, community-based palliative care.
  • Just over 80 per cent of permanent aged care residents die there.

Social housing

  • There are about 400 000 households in social housing, and more than 150 000 on the waiting list. About 1.3 million households in Australia receive Commonwealth Rent Assistance (CRA). Many people who receive CRA would also be eligible to apply for social housing.
  • In 2015-16, government expenditure on social housing was about $5 billion, and expenditure on CRA was about $4.4 billion.
  • Between 2007 and 2017, rental prices nationally increased by about 48 per cent. The maximum CRA payment increased by about 28 per cent over this period.
  • About 2000 tenants were evicted from social housing in 2012-13.

Family and community services

  • Funding from all levels of government to not-for-profits delivering social services totalled $7.2 billion across over 5000 organisations in 2015.
  • Contracts for non-government providers to deliver family and community services typically default to three years or less.
  • There is a wide variation in people’s needs. For example, in 2015-16, 26 per cent of specialist homelessness services clients received five days of support or less, 60 per cent of clients received between six and 180 days of support and 15 per cent of clients received over 180 days of support.

Services to remote Indigenous communities

  • About one in five Indigenous Australians live in a remote area.
  • In 2011, there were over 1000 discrete Indigenous communities in remote areas of which more than three quarters had a population of less than 50 people.
  • The remote community of Jigalong in Western Australia received 90 different social and community services in 2013-14 for a population of less than 400.

Public hospitals

  • In 2014-15 about 700 000 patients were admitted to public hospitals for elective surgery, and about 1.4 million were admitted to private hospitals.
  • Specialist referrals are provided in almost 10 per cent of GP consultations, amounting to about 14 million referrals annually.
  • There is wide variation in out-of-pocket charges for private specialist consultations. For example, in 2015, more than a third of initial private consultations with a neurologist had no out-of-pocket charges, but of those that did, 10 per cent had out-of-pocket charges above $210.

Public dental services

  • About one third (8.4 million people) of the Australian population is eligible for public dental services.
  • Together, Australian, State and Territory Governments spent $1.5 billion on public dental services in 2014-15. State and Territory Governments contributed $713 million and the Australian Government contributed $788 million.
  • Dental conditions were the second-highest cause of acute, potentially preventable hospitalisations in 2015-16, accounting for about 67 000 admissions.
  • Increasing costs as oral health conditions worsen means that the time someone spends on a waiting list matters. About two thirds of adults waiting for general care (non-urgent) in New South Wales were seen within clinically-accepted benchmark times. But waiting times for general care vary across Australia, and can be up to two to three years.

Background information

Leonora Nicol (Media, Publications and Web) 02 6240 3239 / 0417 665 443

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Better access to better quality end-of-life care

The Productivity Commission has released a draft report that identifies widespread changes are needed to end-of-life care in Australia.

'We need to see vast improvements in end-of-life care services both in homes and residential aged care facilities. We see far too many people stuck on a 'medical conveyor belt' at the end of their lives instead of getting the care they want, where they want,' Productivity Commission's Social Policy Commissioner Richard Spencer said.

'About 70 per cent of Australians would prefer to be cared for and to die at home, but don't because they can't access community-based palliative care. Instead people receive care and die in a place that is not of their choosing,' Mr Spencer said.

The Productivity Commission's draft report on Human Services finds too much variability in the availability of care at the end-of-life. 'All Australians should be able to receive high quality end-of-life care regardless of their circumstances, where they live, or the cause of their illness,' Mr Spencer said.

The report also identifies a surprising lack of palliative care in aged care facilities.

'Four out of five residents of aged care facilities die there. But many often make traumatic and costly trips to hospital to receive end-of-life care that could have been provided in surroundings that are by now familiar to them,' Mr Spencer said.

End-of-life care is the physical, spiritual and psychosocial services provided to a person in their last 12 months of life.

Building on the Commission's 2016 Human Services Study, the draft report proposes improvements in six fields of human services: end-of-life care services; social housing; services in remote Indigenous communities; government-commissioned family and community services; public hospitals and public dental services.

'Taken collectively, these changes put in prospect improved wellbeing for all Australians,' Productivity Commissioner Stephen King said.

The draft report also finds that robust government oversight is essential in unlocking the potential benefits of user choice and competition in human services.

The Commission's proposed improvements in the access to and quality of end-of-life care services in Australia can be found in its draft report, Introducing Competition and Informed User Choice into Human Services: Reforms to Human Services.

People interested in making a submission or attending a public hearing should go to pc.gov.au.

Overhaul to social housing - well overdue

'Australia's social housing system is broken, unfair and is failing those in need. People in the community who need the security of social housing can wait 10 years or more for a place to become available,' the Productivity Commission's Social Policy Commissioner Richard Spencer said.

The Productivity Commission has released a draft report that recommends moving to a single model of housing assistance across both social and private rental markets.

'An overhaul is needed to create a fairer, more flexible system so people who are eligible for housing assistance have greater choice over where they live. This means people can move closer to the services they use such as schools and be closer to where they work or want to work,' Productivity Commissioner Stephen King said.

'We are also recommending, as have many before us, a well overdue increase to Commonwealth Rent Assistance. An increase of about 15% is needed to catch up with rises in rental prices. Rent assistance should also be indexed to rental prices so that the rental affordability gap does not worsen for Australians most in need,' Dr King said.

Some people could also be eligible for an additional housing payment, such as those with a demonstrated need to live in a high cost area.

The Productivity Commission's proposed changes retain a foundation role for social housing in Australia.

'Some tenants are not well placed to enter the private rental market, and it is important that social housing continues to provide them with stable accommodation and support services,' Dr King said.

The call for an overhaul to social housing in Australia, and the full list of proposed reforms, can be found in the Productivity Commission's draft report, Introducing Competition and Informed User Choice into Human Services: Reforms to Human Services.

The services covered in the draft report are: end-of-life care services; social housing; services in remote Indigenous communities; government-commissioned family and community services; public hospitals and public dental services.

The draft report also finds that robust government oversight is essential to unlock the potential benefits of user choice and competition in human services.

People interested in making a submission or attending a public hearing should go to pc.gov.au.

Background information

Leonora Nicol (Media, Publications and Web) 02 6240 3239 / 0417 665 443

  • Preliminaries
    • Cover, Copyright and publication detail, Opportunity for further comment, Terms of reference, Contents and Abbreviations
  • Overview - including key points
  • Draft recommendations and information request
  • Chapter 1 The Commission's approach
    • 1.1 What the inquiry is about
    • 1.2 The roles of government
    • 1.3 The objective of reform
    • 1.4 Introducing greater informed user choice, competition and contestability
    • 1.5 Assessing reform options
  • Chapter 2 Government stewardship
    • 2.1 Governments' role as stewards
    • 2.2 Design
    • 2.3 Delivery
    • 2.4 Improvement
  • Chapter 3 End-of-life care in Australia
    • 3.1 What is end-of-life care?
    • 3.2 Some end-of-life care is excellent
    • 3.3 Too many Australians miss out on high-quality end-of-life care
    • 3.4 Reform directions for end-of-life care
  • Chapter 4 Reforms to end-of-life care
    • 4.1 Improving acute care at the end-of-life
    • 4.2 Enabling more people to be supported to die at home if they wish
    • 4.3 Supporting end-of-life care in aged care
    • 4.4 Advance care planning
    • 4.5 Data on end-of-life care
  • Chapter 5 User choice and contestability in social housing
    • 5.1 What would an effective social housing system look like?
    • 5.2 Choice between social and private rentals
    • 5.3 The role of social housing
    • 5.4 Increasing contestability of tenancy management
  • Chapter 6 Social housing: tenancy support services and stewardship
    • 6.1 Support services for tenants
    • 6.2 Improving government stewardship
    • 6.3 Evaluating reforms
  • Chapter 7 Commissioning family and community services
    • 7.1 Context and scope
    • 7.2 Problems with the current arrangements
    • 7.3 What would effective commissioning of family and community services look like?
    • 7.4 Reform directions
  • Chapter 8 Human services in remote Indigenous communities
    • 8.1 The need for reform
    • 8.2 Lessons from some previous reforms
    • 8.3 Effective service provision in remote Indigenous communities
    • 8.4 Toward a better model of service provision
    • 8.5 Improvements to commissioning practices
  • Chapter 9 Patient choice
    • 9.1 Introduction
    • 9.2 The referral pathways to specialist elective care
    • 9.3 Increasing referral choices for patients
    • 9.4 Benefits and costs of increasing referral choices
  • Chapter 10 Information to support patient choice and provider self-improvement
    • 10.1 Introduction
    • 10.2 What information would support choice, provider self-improvement and contestability?
    • 10.3 How well does current reporting support choice, provider self-improvement and contestability?
    • 10.4 Proposed reforms
  • Chapter 11 Reforms to underpin more effective provision of public dental services
    • 11.1 What would an effective public dental system look like?
    • 11.2 The potential avoidable costs of oral disease
    • 11.3 Establishing the prerequisites for reform
  • Chapter 12 User choice and contestability in public dental services
    • 12.1 Giving users choice through consumer directed care
    • 12.2 The role of payment models in aligning incentives
    • 12.3 Allocating funding to patients
    • 12.4 Improving contestability within public dental services
    • 12.5 The pathway to reform
  • Appendix A Public consultation
  • References

Printed copies

Printed copies of this report can be purchased from Canprint Communications.