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Annual Report - Secretary's Review


Jane Halton, Departmental Secretary

Jane Halton,
Departmental Secretary

Health and aged care are rapidly growing sectors of the economy, not just here but around the world. The work of the Health and Ageing Department impacts on all Australians and is central to the Australian Government’s responsibilities. Health is an area of constant change. Each year brings forward technological and scientific advances, new risks and threats, and steadily increasing consumer expectations. Aged care is also a sector of major reform and development as the nation prepares for the needs of the ageing population. In 2004-05, the Department continued to provide national leadership on all of these areas.

This year the Department administered a budget of $36.2 billion on behalf of the Government, a 10.3 per cent nominal increase over the 2003-04 actual expenditure, and accounting for almost one in every five dollars of Government spending. Through this portfolio, the Australian Government provided around 46 per cent of total national spending on health.

In addition, an emerging dimension of our work was contributing to a whole of government response to major issues facing the nation, with ramifications beyond health and ageing. The Department’s ability to consult and coordinate within and across governments enabled it to respond quickly and effectively to these issues.

During the year, the Department’s key achievements were:
  • development and delivery of 100 per cent Medicare and Round the Clock Medicare and continued implementation of all aspects of the Strengthening Medicare package including the safety net;
  • a major role in the coordination of the national health response to the Asian tsunami, and increasing national preparedness for a health emergency;
  • substantial implementation of the $2.2 billion 2004-05 Budget package, Investing in Australia’s Aged Care: More Places, Better Care introduced in response to the review of pricing arrangements in residential aged care;
  • significant expansion of primary health care services for Aboriginal and Torres Strait Islander people, including support for managing chronic disease, addressing problems of drug use and petrol sniffing;
  • working with the State and Territory governments to improve out-patient after hours and post-hospital care; and
  • delivering several major corporate initiatives to improve the quality and efficiency of our work.

A Safer Future for all Australians

We are all aware that in the modern global environment, new threats have emerged that could impact suddenly on the nation’s health. The Department’s National Incident Room remained activated during the year and proved its value on a number of occasions. The Department also continued to raise its response capacity to potential bioterrorism, infectious disease outbreaks and health disasters.

I am proud of the significant contribution that departmental staff have made in these areas.

The Department’s response, and that of our State and Territory partners, to the 2004 Boxing Day Indian Ocean tsunami was admirable. Despite the holiday season, we were able to immediately deploy civilian medical teams to affected countries to conduct emergency surgery, run primary care clinics and to provide public health assistance and laboratory diagnosis. This quick response reflected the intensive efforts by many staff to plan for such events. The Chief Medical Officer’s report discusses in greater detail Australia’s response to this disaster.

The Department improved its communication and response capabilities for a health disaster, including release of the Australian Management Plan for Pandemic Influenza. Development commenced on the Biosecurity Surveillance System to improve national communicable disease surveillance.

In addition, the Department, in consultation with State and Territory governments, expanded the range of items in the National Medicine Stockpile and developed detailed arrangements for the rapid deployment of stockpile items during an incident or disaster. As a result of this work, Australia is as well prepared as any other country for an influenza pandemic, and now maintains one of the largest stockpiles of antiviral medicines per capita, for use in the event of an influenza pandemic. The stockpile includes essential medicines and antidotes to be used in the event of a deliberate or accidental chemical, biological or radiological incident or disaster.

Another important measure to safeguard the nation’s future health was expansion of the National Immunisation Program to 12 vaccines. In November 2004, the Department concluded negotiations with State and Territory governments on the new Australian Immunisation Agreements 2004-09 for the purchase of vaccines for free distribution to targeted sectors of the population.

One of these was the childhood pneumococcal vaccine. The Department directly managed the purchase of this vaccine, which is in short supply around the world, and implemented the National Childhood Pneumococcal Vaccination Program, which provides free vaccine for all children born after 1 January 2005 at two, four and six months of age, plus catch-up vaccinations in 2005 for all children born between 1 January 2003 and 31 December 2004. From 1 January 2005, Australians aged 65 years or older were also able to obtain free vaccine through the National Pneumococcal Vaccination Program for Older Australians.

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Commitment to Caring for Older Australians

By the end of 2004-05, the Department had implemented most of the wide-ranging package of aged care measures, introduced in response to the review of pricing arrangements in residential aged care by Professor Warren Hogan. The measures expand the number of aged care places, address cost pressures faced by providers, strengthen quality, and promote efficiency and sustainability in the management of aged care.

These reforms and the record outlay on aged care have further improved Australians’ access to quality aged care that is affordable to residents and their families. We have also made significant progress in expanding training for aged care workers and introducing modern management systems into homes.

The Department also worked with the States and Territories to help implement a new strategy for aged care services delivered in the community - 'The Way Forward', which simplifies access to services for clients and their carers. Significant progress has also been made on the renegotiation of the Home and Community Care Agreement.

In partnership with the States and Territories, the Department implemented the first stage of the new Transition Care Program. This is a new type of care bridging the gap between hospital and home, to assist older people to improve their capacity for independent living after a stay in hospital and avoid inappropriate extended hospital stays or premature admission to residential care.

Addressing Aboriginal and Torres Strait Islander Health Needs

Improving the health of Aboriginal and Torres Strait Islander peoples remains one of our most pressing issues. The Department is committed to making gains in this area and is playing an active role in new collaborative whole of government approaches to delivering programs and services.

In particular, in 2004-05 all areas of the Department were involved in efforts to improve Aboriginal and Torres Strait Islander people’s access to appropriate clinical care, population health programs, and aged and community care services.

The Department contributed to a Single Indigenous Budget Submission to Cabinet for the 2005-06 Budget. This single submission process enabled Budget proposals for Indigenous people to be considered across portfolios against key priorities. This was a major change, both structurally and culturally, from traditional competitive bids for Indigenous funds between portfolios, and was the first time such a broad-ranging coordinated set of proposals for expenditure on Indigenous affairs was considered by Government.

The Department managed the allocation of nearly $65 million in 2004-05 for new or expanded primary health care services in priority areas, and the extension of the Comgas Scheme to combat petrol sniffing by replacing Avgas with Opal unleaded replacement fuel.

We also continued our lead agency role in the Council of Australian Governments (COAG) whole of government Indigenous trial site on the APY Lands in South Australia, which includes support for a new regional representative forum (Tjungungku Kuranyukutu Palyantjaku). Two of our major projects are focussed on improving the availability and affordability of healthy food supplies, and on improving access to a wide range of social and community services. These projects are also improving training and employment opportunities.

Providing a High Quality Health System

Medicare is the foundation of Australia’s health care system. One of the Department’s largest roles is to oversee operations of Medicare and advise on refinements to adapt the system to new circumstances, while maintaining its essential features.

Continued implementation of Strengthening Medicare and other measures to improve the operations of Medicare were major tasks in 2004-05. From 1 January 2005 the Medicare rebates for GP consultations were raised from 85 to 100 per cent of the Medicare Schedule Fee (100 per cent Medicare), and rebates for after-hours GP services were raised (Round the Clock Medicare). The Department also guided operations of the Medicare Safety Net; incentives for general practitioners to bulk bill (which lifted bulk billing rates); and expansion of the use of practice nurses in general practice.

We successfully negotiated with the States and Territory governments to deliver better out-patient and out-of-hours care, and with the pathology profession to ensure access to affordable, quality Medicare-funded pathology services via the Third Pathology Quality and Outlays Memorandum of Understanding (MoU). The Department worked closely with the pathology profession to ensure that expenditure was contained within specified targets set for the MoU.

The Department continued to support the Government’s objectives of giving Australians a choice in health services by improving affordability, access, and quality of private health care. Achievements included implementing increases to the Private Health Insurance Rebate for people aged 65 and over, continued implementation of new prostheses arrangements so that private health insurance funds will be required to provide a no gap range of prostheses, and enabling health funds to pay benefits for hospital accommodation and nursing care associated with surgical procedures performed by accredited podiatrists.

In 2004-05, the Department supported a wide range of research, policy development, regulation and monitoring work to develop better quality health and safety systems for Australians. This work included the Health Task Force (Podger Review) established in October 2004 by the Prime Minister to advise the Australian Government on options to improve the delivery of Australian hospital and health services.

This work fed into a COAG process in which heads of all governments recognised that many Australians, including the elderly and people with disabilities, face problems at the interfaces of different parts of the health system. COAG agreed that senior officials would consider ways to address these issues and report back in December 2005 on a plan of action. The Department has given a very high priority to its policy contributions to this important reform agenda.

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Promoting Healthy Lifestyles and Helping Australians to Stay Healthy

As medical science and good public health programs have reduced the dangers of many traditional infectious diseases, Australia and most developed nations are facing higher risks from chronic diseases, many of which are linked to lifestyle.

Preventing health problems through education, health promotion and screening for early detection is an integral part of the Department’s approach to protecting the nation's health. During the year, the Department managed a wide range of evidence-based and influential health promotion, education and disease prevention measures. These included community marketing campaigns that support the prevention of illicit drug use amongst young people, and encouraged the consumption of fruit and vegetables.

A prominent achievement during the year was the Department’s successful negotiation of new, five year Public Health Outcome Funding Agreements with all State and Territory governments. These agreements provide significant Australian Government funding for major population health strategies and programs which target agreed priority areas. These areas include HIV/AIDS and related sexually transmissible and blood borne diseases; breast and cervical cancer screening; and health risk factors including alcohol and tobacco programs, women’s health, and sexual and reproductive health.

An important milestone was reached with the combined launch of the National HIV/AIDS Strategy 2005-2008, the second National Hepatitis C Strategy 2005-2008, and the first National Sexually Transmissible Infections Strategy 2005-2008. These strategies were developed in close consultation with interest groups through the Ministerial Advisory Committee on AIDS, Sexual Health and Hepatitis, State and Territory governments, community organisations, medical professionals, and researchers. I look forward to the challenge of beginning to implement these important plans over the coming year.

A Health System Evolving Through Technology

New information technology has the potential to greatly improve the provision of health services and reduce the number of clinical mistakes which unfortunately occur through human error. The HealthConnect system developed by the Department has the potential to set the world standard for electronic patient records.

During 2004-05, the Department reviewed the HealthConnect program in consultation with a broad range of stakeholders including State and Territory governments, industry, and health care providers and consumers. This review led to the development of a new implementation strategy for HealthConnect, emphasising connectivity of new and existing health databases.

The Broadband for Health program achieved a big uptake in high speed, secure internet technology - as a precursor to HealthConnect - in community pharmacies, general practices, and Aboriginal Community Controlled Health Services. The National E-Health Transition Authority (NEHTA) was created in August 2004 with funding provided by the Australian Government and States and Territories, to develop national standards and infrastructure to assist the adoption of e-health throughout the Australian health sector.

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Building the Department’s Capability

While the great bulk of the Department’s work is focussed on serving the Australian community, we must also ensure the most effective management of the funds we administer, our internal business and our people. I am very pleased with the efforts made by the Department in 2004-05 towards this objective.

During the year, the Department introduced a new departmental performance management framework which aligns performance information directly with financial information. Adopting this simplified approach means the Department will be able to report on activities in a more transparent manner. The Department’s new performance management framework, including a revised outcome structure, was introduced in the 2005-06 Portfolio Budget Statements.

Advances to the Department’s business practices include the release of the Financial Strategy 2004-2007 - Investing in Our Future. The Financial Strategy was introduced to improve the Department’s performance in four key areas: financial viability; organisational reform; investment in people; and continual improvement of business systems and processes. The strategy supports our financial management framework, which was the subject of a performance audit by the Australian National Audit Office (ANAO) this year. I am very pleased with the outcomes of the audit, in which the ANAO recognised the improvements we have made to our financial systems and reports, internal control and strategic financial management over recent years. We still have weaknesses in a small number of areas, which we are addressing as a priority.

We have also made important changes to people management, including the introduction of the new Capability Map, developed in response to issues raised in the 2004 staff survey. The aim of the Capability Map is to provide staff with a clearer understanding of what is expected from them at each level, across a range of core capabilities, and encourages skills development and career progression. The Capability Map has been integrated with the Performance Development Scheme, and recruitment processes.

I would like to thank staff and their representatives for the significant contribution they made in the development of these important changes.

Portfolio Changes and New Arrangements

There was a change in the portfolio Ministry in 2004-05 with the Hon Christopher Pyne MP being sworn in on 26 October 2004 as the new Parliamentary Secretary.

On the same date, the new Minister for Human Services took responsibility for a number of agencies within the portfolio - Australian Hearing; the Health Insurance Commission (now known as Medicare Australia); CRS Australia; and Health Services Australia. Under the new arrangements, the Department will continue to focus on developing and implementing health and ageing policies, rather than service delivery. We are working cooperatively and effectively with the service delivery agencies and are pleased to have finalised a new Memorandum of Understanding with the Health Insurance Commission.


Once again, the significant achievements of the Department in this year reflect the commitment and hard work of our people. I would like to thank managers and staff for their contributions to a successful year.

I invite you to refer to the 2005-06 Health and Ageing Portfolio Budget Statements for a detailed discussion of our objectives by outcome, for the next financial year.

Jane Halton

Department of Health and Ageing

Produced by the Portfolio Strategies Division, Australian Government Department of Health and Ageing.
URL: http://www.health.gov.au/internet/annrpt/publishing.nsf/Content/secretarys-review-1
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