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1999-2000

Portfolio Additional Estimates Statements 1999-2000 - Part B - Portfolio Overview

Contains the 1999-2000 Portfolio Additional Estimates Statement for the Health and Aged Care Portfolio.

There have been no major changes to the focus of the portfolio since the 1999-00 Budget. The portfolio will continue to address the health and aged care needs of the Australian community, and to respond to Government policy priorities in this arena.

The Department of Health and Aged Care pursues the achievement of the Portfolio Outcomes in association with other agencies in the Portfolio: the Health Insurance Commission, Australian Hearing Services, the Private Health Insurance Administration Council, the Private Health Insurance Ombudsman, the Professional Services Review Scheme, the Australia New Zealand Food Authority, the Australian Institute of Health and Welfare and the Australian Radiation Protection and Nuclear Safety Authority.

The Portfolio of Health and Aged Care has a diverse set of responsibilities, but throughout there is a common purpose, which is reflected in the mission statement:

We lead the development and implementation of health and aged care services policy to achieve Government policy and directions.

As national leaders in health and aged care services, the Portfolio:

• provides expert policy advice and analysis to the Government;
• implements Government policy in a way that addresses both individual and population needs and focuses on quality and outcomes;
• communicates information about health and aged care services and Government policy reforms;
• promotes planning which is focused on outcomes for individuals and communities;
• promotes investment in prevention and early intervention and incentives for effective, best practice service delivery;
• supports world class health and medical research, and keeps up with advances in technology;
• encourages new approaches to information management and communication to support better care and health outcomes, and better policy making;
• works in partnership with the States and Territories to set objectives, priorities, strategic directions and benchmarks, provide funding, define performance standards, monitor and report on performance against agreed outcomes for the whole health and aged care services system; and
• works in partnership with our stakeholders to ensure the delivery of high quality, consumer focused and cost-effective services.

The Portfolio also has a vision for what it wants to be:

The leader in promoting, developing and funding world class health and aged care services for all Australians.

The world class health and aged care services we are building through partnerships and collaborations will feature:

• measurable improvements in the health status of the Australian population, particularly our most disadvantaged groups;
• an active and healthy population with choice for individuals to manage their own health care;
• a nationally coherent health and aged care system which provides both choice and universal access and allows regional and state variations;
• high quality services that reflect evidence of best practice including a systematic approach to improvement through trials and innovation;
• quality aged care and choice for individuals to manage their own ageing; and
• a targeted approached to disease management and to addressing health risks of particular individuals and communities.

The Portfolio's success in achieving this vision will be reflected in part by the achievement of the following broad health and aged care services targets, which are measured biannually by the Australian Institute of Health and Welfare:

• continued improvements in life expectancy for both males and females over time;
• further reductions in infant mortality rates over time;
• additional improvements in health expectancy rates over time;
• improved life expectancy, health expectancy and infant mortality rates for Aboriginal and Torres Strait Islanders so that they are comparable with the general population; and
• improved life expectancy, health expectancy and infant mortality rates for low income Australians so that they are comparable with the general population.

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Portfolio Outcome Structure for 1999-00

Outcome	Agencies Or Divisions Responsible
1. Population Health And Safety Protection and promotion of the health of all Australians and minimisation of the incidence and severity of preventable mortality, illness, injury and disability.	Population Health Division Health Insurance Commission* Therapeutics Goods Administration Australia New Zealand Food Authority Australian Radiation Protection & Nuclear Safety Agency
2. Access to Medicare Access through Medicare to cost-effective medical services, medicines and acute health care for all Australians.	Health Access and Financing Division Health Insurance Commission* Professional Services Review
3. Choice through Private Health Insurance A viable private health insurance industry to improve the choice of health services for Australians.	Portfolio Strategies Division Private Health Insurance Administration Council Private Health Insurance Ombudsman Health Insurance Commission*
4. Quality Health Care Improved quality, integration and effectiveness of health care.	Health Services Division
5. Rural Health Care Improved health outcomes for Australians living in regional, rural and remote locations.	Health Services Division
6. Hearing Services Reduced consequences of hearing loss for eligible Australians and reduced incidence of hearing loss in the broader community.	Aged and Community Care Division Australian Hearing Services* Health Insurance Commission*
7. Aboriginal and Torres Strait Islander Health Improved health status for Aboriginal and Torres Strait Islander peoples.	Office for Aboriginal and Torres Strait Islander Health
8. Enhanced Quality of Life for Older Australians Support for positive and healthy ageing and high quality and cost-effective care for frail older people, people with disabilities, and their carers.	Aged and Community Care Division Aged Care Standards and Accreditation Agency*
9. Health Investment Knowledge, information and training for developing better strategies to improve the health of Australians.	Office of the National Health & Medical Research Council National Health and Medical Research Council Australian Institute of Health and Welfare
10. Portfolio Leadership Leadership and management of the Department to ensure development and implementation of world class policy and practices for health and aged care services for all Australians.	Departmental Executive Unit Portfolio Strategies Division Corporate Services Division

* These agencies contribute to the outcome through a purchaser/provider relationship with the Department.
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Additional Estimates and Variations - Overview

The Portfolio is seeking an increase of $358.526 million (equivalent to 1.5 per cent of the total estimated expenses at Budget time) in appropriations, composed of the following:

• $222.476 million in administered expenses;
• $21.456 million in specific payments to the States and Territories;
• $24.873 million in other administered expenses;
• $33.747 million in departmental outputs;
• $3.168 million in agency expenses;
• $18.323 million in equity and injections; and
• $34.483 million in administered capital.

1999-00 Additional Estimates impact upon: the Department of Health and Aged Care; Australia New Zealand Food Authority (ANZFA); Australian Radiation Protection and Nuclear Safety Agency (ARPANSA); and the Health Insurance Commission (HIC) for this portfolio.

Resource Summary All Outcomes

Appropriation Bill 3
Administered Expenses	1998-99 Estimated Actual $'000	1999-00 Budget $'000	Additional Estimates $'000	Reduced Estimate $'000
Outcome 1 - Population Health and Safety	265,267	69,483	43,881	0
Outcome 2 - Access to Medicare	220,754	274,314	21,049	0
Outcome 3 - Choice through Private Health Insurance	302	1,870	0	0
Outcome 4 - Quality Health Care	260,390	283,736	5,374	0
Outcome 5 - Rural Health Care	100,456	23,129	15,097	0
Outcome 6 - Hearing Services	137,050	142,928	4,370	0
Outcome 7 - Aboriginal and Torres Strait Islander Health	141,938	181,840	1,252	0
Outcome 8 - Enhanced Quality of Life for Older Australians	211,486	183,006	11,530	0
Outcome 9 - Health Investment	141,977	189,381	118,524	0
Outcome 10 - Portfolio Leadership	11,906	13,533	1,399	0
Total Administered Expenses	1,491,529	1,363,221	222,476	0
Special Appropriations
Outcome 1 - Population Health and Safety	34,391	63,601	0	0
Outcome 2 - Access to Medicare	15,705,434	16,066,338	-2,784	0
Outcome 3 - Choice through Private Health Insurance	702,792	1,290,426	101,666	0
Outcome 4 - Quality Health Care	251,673	291,140	-8,817	0
Outcome 8 - Enhanced Quality of Life for Older Australians	3,122,870	3,314,097	276	0
Total Special Appropriations	19,817,160	21,025,602	90,341	0

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Departmental Outputs	1998-99 Estimated Actual $'000	1999-00 Budget $'000	Additional Estimates $'000	Reduced Estimate $'000
Department of Health and Aged Care
Outcome 1 - Population Health and Safety	43,456	52,790	9,971	0
Outcome 2 - Access to Medicare	348,493	342,132	4,585	0
Outcome 3 - Choice through Private Health Insurance	24,106	34,569	2,344	0
Outcome 4 - Quality Health Care	18,546	21,691	2,976	0
Outcome 5 - Rural Health Care	5,744	5,655	383	0
Outcome 6 - Hearing Services	5,227	10,083	4,403	0
Outcome 7 - Aboriginal and Torres Strait Islander Health	14,189	15,386	1,150	0
Outcome 8 - Enhanced Quality of Life for Older Australians	80,599	83,071	5,667	0
Outcome 9 - Health Investment	11,380	8,954	607	0
Outcome 10 - Portfolio Leadership	9,041	9,557	1,660	0
Sub-total Department's Expenses	560,781	583,888	33,747	0
Agency Expenses
Australian Radiation Protection and Nuclear Safety Agency	9,974	8,459	168	0
Australian New Zealand Food Authority	8,094	8,375	3,000	0
Professional Services Review	1,587	3,330	0	0
Private Health Insurance Ombudsman	700	950	0	0
Australian Institute of Health and Welfare	8,027	8,052	0	0
Sub-total Agency Expenses	28,382	29,166	3,168	0
Total Departmental Expenses	589,163	613,054	36,915	0

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Appropriation Bill 4
Specific Purpose Payments to the States and Territories	1998-99 Estimated Actual '000	1999-00 Budget $'000	Additional Estimates $'000	Reduced Estimate $'000
Outcome 1 - Population Health and Safety	148,835	142,159	0	-3,251
Outcome 2 - Access to Medicare	62,789	65,145	19,173	0
Outcome 4 - Quality Health Care	64,127	63,856	5,537	0
Outcome 8 - Enhanced Quality of Life for Older Australians	538,784	565,627	0	-3
Sub-total	814,535	836,787	24,710	-3,254

Other Administered Expenses
Outcome 2 - Access to Medicare	0	0	0	-20
Outcome 4 - Quality Health Care	2,625	0	0	0
Outcome 5 - Rural Health Care	37,614	184	9,000	0
Outcome 9 - Health Investment	8,929	4,771	14,893	0
Outcome 10 - Portfolio Leadership	5,000	0	1,000	0
Sub-total	54,168	4,955	24,893	-20
Total Administered Expenses	868,703	841,742	49,603	-3,274
Equity Injections and Loans
Equity Injection *	0	700	4,073	0
Loans	0	0	14,250	0
Administered Capital **	0	0	34,483	0
Total Capital	0	700	52,806	0

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* The Equity Injection and Loan components of the above schedule relates to Departmental Expenses and is notionally split across the outcomes as follows:

Department of Health and Aged Care
	Equity Injection	Loans	Outcome total
Outcome 1 - Population Health and Safety	864	1,847	2,711
Outcome 2 - Access to Medicare	168	359	527
Outcome 3 - Choice through Private Health Insurance	566	1,209	1,775
Outcome 4 - Quality Health Care	355	759	1,114
Outcome 5 - Rural Health Care	93	198	291
Outcome 6 - Hearing Services	153	327	480
Outcome 7 - Aboriginal and Torres Strait Islander Health	252	538	790
Outcome 8 - Enhanced Quality of Life for Older Australians	1,318	2,816	4,134
Outcome 9 - Health Investment	147	313	460
Outcome 10 - Portfolio Leadership	157	5,884	6,041
Total Departmental Expenses	4,073	14,250	18,323

** The administered capital injection is to cover liabilities existing as at 30 June 1999 for which no funding has previously been received. This is due to the complexities encountered with the transition from a cash framework in 1998-99 to an accrual framework in 1999-00 whereby cash payments for expenses incurred prior to 30 June 1999, fall due after 30 June 1999. It was agreed with the Department of Finance and Administration to resolve this issue in the Additional Estimates context. The $34.5m administered capital injection represents the cash payments that fall due in 1999-00 in Outcomes 1 and 8; further administered capital injections are expected to follow in the forward years as payments fall due in those years to cover expenses incurred prior to 30 June 1999.

Additional Estimates Resourcing for All Outcomes and Output Groups

The Government has adopted ten outcomes for the Health and Aged Care Portfolio under the new framework. These outcomes provide a direct link between the directions being set by Government and the policy and operational activity undertaken in the Department of Health and Aged Care and portfolio agencies.

The following diagram shows the relationship between the Health and Aged Care Portfolio outcomes and the contributing outputs of the Department and portfolio agencies. The diagram also summarises the resource allocation sought at Additional Estimates for departmental expenses and administered expenses for each outcome. Where no dollar amounts are provided for an output group or agency indicates that no additional funding is being sought at Additional Estimates.
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The Department has grouped its outputs into seven standard output groups: Policy advice to the Ministers and Government, Services to the Ministers and Parliament, National Leadership, Information, Contract Administration and Funds Management, Regulatory Activity, and Direct Delivery of Services. A description of each of the standard output groups is provided below. Portfolio agencies other than the Department were given the opportunity to develop independent output groups to define their outputs, or to use standard Departmental output groups. Most agencies have used the standard groups, though the Australian Radiation Protection and Nuclear Safety Agency developed an output group unique to that agency. The Australian Institute of Health and Welfare has four output groups: the first is unique to the Institute and the other three correspond to Departmental groups.
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Departmental Output Groups: Standard Descriptions

Policy advice to the Ministers and Government

This output group involves the provision of a policy advice capacity or service. It includes monitoring, analysing and reporting to the Ministers on specific issues; and providing Ministers with a policy advice. It spans Ministerial briefs, new policy proposals, budget packages, Cabinet Submissions, Memoranda, legislative drafting, supporting Bills through Parliament and Coordination Comments.

Services to the Minister and Parliament

This output group covers the various outputs that are provided for the Ministers and Parliament, for example, ministerial correspondence, QTBs, questions on notice, ministerial speeches, providing information to and appearing before Parliamentary committees, Portfolio Budget Statements and Annual Reports.

National leadership

This output group provides for the activities associated with working with States, Territories and peak bodies in the development of national strategies and infrastructure. Examples of outputs in this group include representing the Government at international forums, development of minimum data sets, coordinating research and development activities on behalf of Commonwealth-State Ministerial Councils, preparing reports and papers for these Councils, and providing secretariat services to these Councils.

Information

This output group provides for the production of publications, responding to queries from the media and the public and public awareness campaigns. It spans the regular publication of Medicare statistics, publication of Australian Casemix Reports, the publication of the Pharmaceutical Benefits Schedule, marketing government programs, and maintaining the Department's Internet.

Contract Administration and Funds Management

This output group covers the activities associated with the development and management of contracts and grants for administered funds and the payment of administered funds. It includes making new service or funding recommendations to the Ministers, developing grant guidelines and tender briefs, renegotiating funding or contractual agreements, monitoring contracts, payments, acquittals, and resolving provider concerns with funding arrangements.

Regulatory Activity

This output group involves the administration of legislation, including activities related to the development of regulations, amendment to regulations, and enforcement of legislation. Examples of outputs in this group include amendments to regulations relating to the Pharmaceutical Benefits Scheme, drugs for sale in the Australian market, issuing licences, approving service providers, verifying that services meet national quality standards, and testing samples.

Direct Delivery of Services

This output group is for those areas of the Department which are engaged in some area of service delivery activity for either the Minister or the Community. Examples of outputs in this group include the payment of benefits by the Health Insurance Commission under a purchaser provider relationship with the Department.

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Explanation of Variations Common to All Outcomes

Administered

The accrual treatment of a range of grant programs which are part of the Department's administered expenditure continues to be refined following recent changes to Australian Accounting Standard 29. In most cases, the effect of this change is to recognise an expense when a service is provided rather than at the time of entering into an agreement for the provision of that service. The change to the Standard also ties grant payments to the delivery of services to the community rather than to the Department as was previously the case under the former treatment.

The estimates for administered expenses in 1999-00 and the forward years have been adjusted through the additional estimates process to reflect the impact of these changes in accounting policy.

The changes to the 1999-00 financial year predictions therefore reflect two factors:

1. Correction to expenses resulting from the change in timing of the recognition point of liabilities as outlined above, and
2. The recognition of new liabilities (and therefore increases in expenses) as a result of policy changes and new measures since budget.

In particular the 1999-00 expenses have increased by $92m mainly due to:

• Outcome 1 expenses having increased by $36m predominantly due to the decrease in predicted liabilities at 30 June 1999;
• Outcome 2 expenses having decreased by $53m predominantly due to the decrease in predicted liabilities at 30 June 2000;
• Outcome 3 expenses having decreased by $52m predominantly due to the increase in predicted liabilities at 30 June 1999;
• Outcome 5 expenses having increased by $24m due to the removal of the predicted liability at 30 June 1999 thus spreading the expense across the forward years; and
• Outcome 9 expenses having increased by $132m due to corrections to the liabilities and prepayments.

Departmental

The Department has also sought an additional $33.747m in departmental appropriations in the Additional Estimates context, comprising:

• a $16.974m baseline adjustment to correct for an omission at Budget in the transition from cash to accruals (and to be appropriated as an increase in departmental expenses and notionally split against each of the ten Outcomes in Appropriation Bill 3 at Additional Estimates);
• a rollover from 1998-99 to 1999-00 of $4.073m in unspent funds (to be appropriated as an equity injection in Appropriation Bill 4 at Additional Estimates);
• a loan of $5.550m in 1999-00 (and $5.250m in 2000-01) for the implementation of new corporate information systems (to be appropriated as a loan inAppropriation Bill 4 at Additional Estimates); this loan will largely be repaid with savings from efficiency gains and improved work practices arising from the introduction of the new corporate systems; and
• a loan of $8.700m to meet the cost of outputs as outlined in the Portfolio Budget Statements for 1999-00 (to be appropriated as a loan in Appropriation Bill 4 at Additional Estimates). Under cash arrangements, this would have been effected through a borrowing against forward years' anticipated running cost appropriations; under the accrual framework, this funding is provided through a loan from the Department of Finance and Administration and will be repaid in 2000-01.

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Post Budget Measures - Department Summary

Measure	Outcome	Appropriations ($'000) 1999-00			Appropriations ($'000) 2000-01			Appropriations ($'000) 2001-02			Appropriations ($'000) 2002-03
		Admin Expenses	Dept'l Outputs	Total	Admin Expenses	Dept'l Outputs	Total	Admin Expenses	Dept'l Outputs	Total	Admin Expenses	Dept'l Outputs	Total
General Practice Memorandum of Understanding	2	22,085	-	22,085	52,678	-	52,678	75,780	-	75,780	87,388	-	87,388
	4	7,680	-	7,680	9,380	-	9,380	9,390	-	9,390	10,973	-	10,973
Total		29,765	-	29,765	62,058	-	62,058	85,170	-	85,170	98,361	-	98,361
Provision of Safe Haven for Displace East Timorese	2	6,546	-	6,546	0	-	0	0	-	0	0	-	0
Operation Safe Haven	2	17,282	-	17,282
Aged Care Residential Care Subsidy Principles 1997 change to definition of 'homeowner' to ensure protection for people with low value homes	8	600	-	600	800	-	800	800	-	800	800	-	800
Post Budget Measures Not Included in the Portfolio's Additional Estimates
Childhood Nutrition Programme	1	0	-	0
Exceptional Circumstances - Batlow Fruit Growers, New South Wales (part - Cross Portfolio)	2	13	-	13	14	-	14	0	-	0	0	-	0
Exceptional Circumstances - Mallee Region, Victoria (part - Cross Portfolio)	2	113	-	113	132	-	132	0	-	0	0	-	0
Private Health Insurance - Reduction in Medicare Payment Lag Times for Simplified Billing	2	0	-	0	0	-	0	0	-	0	0	-	0

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