One of the key means of producing efficiencies is to reduce unnecessary red tape and compliance costs for funded agencies in program delivery and to streamline program administration.
In early 2010 the Australian Government commenced a process of strategic reviews of a number of Commonwealth agencies and departments including DoHA. As a result of the strategic review, a process was developed to ensure the alignment of resources within the portfolio was best placed to implement and manage the government’s key health and ageing priorities and programs, including the National Health Reform agenda.
Many of these initiatives are delivered through various forms of contract, service level agreement or other funding arrangement, often with agencies within the not-for-profit sector. It is therefore important to note that contemporaneously, as part of the Social Inclusion agenda, consultations with the non-government or “Third Sector” resulted in commitment to a National Compact which among other important initiatives commits to a whole-of-government process, led by FaHCSIA, to improve information sharing, reduce red tape, streamline reporting and improve funding and procurement processes. DoHA is a key party to this process. The extent to which the purported benefits of the Compact are in fact being experienced by funded non-government agencies is a matter of debate.
The Departmental view is that the reforms to the grant funding processes within the portfolio’s programs and activities have commenced. This reform, including the establishment of a series of flexible funds including the Health Workforce Fund (HWF), and the introduction of updated IT systems to streamline fund management, should allow multi-year, multi-schedule funding agreements to be established with more targeted reporting requirements. This process, if properly implemented, has the potential to deliver significant benefits for funding recipients. Short-term funding agreement periods and multiple contracts with the same organisation across different areas of the department, were among strong concerns raised by stakeholders during this review.
The HWF is intended to provide increased flexibility for both the Government and fund recipients to undertake activities that meet the aims, objectives and priorities of the Government in meeting future health workforce needs. A key outcome from the establishment or expansion of the fund should be the increased flexibility to respond to emerging health and ageing priorities.
Establishment of the flexible funds
The new grant-related flexible funds have been envisaged to provide the following benefits:
Reduced red tape
Under the new grant management arrangements, it is envisaged that funding recipients will benefit from a significantly streamlined set of management processes. The Department has suggested that its recently introduced Enterprise Standard Funding Agreement provides a single set of terms and conditions for grant recipients. This means providers that agree to the new terms and conditions will have a more consistent approach across the whole Department.
This standard set of terms and conditions, along with the introduction of smart form technology and a single point of contact/relationship manager, should mean that most funding recipients only need to agree once on the terms and conditions to do business with the Department, no matter how many activities they deliver. The aim of these changes, the review was advised, is to achieve reduced administration and a lessening of the reporting burden, for both funding recipients and the Department.
Under the current reform agenda a number of changes are being introduced that should directly benefit those organisations submitting applications for funding as well as successful funding recipients and key stakeholder groups. It is probably important to note at the outset that many of the DoHA reforms described below have yet to be fully rolled out and the experience of many funded agencies remains frustrating.
When implemented, the advantages of reform should include:
Simplified and automated application and funding agreement establishment processes
- A new funding and financial management IT system (FoFMs) is being implemented, with HWD already using this system for the bulk of its programs.
- Once fully implemented these new IT and financial management systems should streamline the application and funding process, the standard funding agreement management and the financial payment processes, by the use of tools such as smart forms.
- Smart forms involve a public-facing web interface that will be a feature of the new FoFMs system. This use of online forms should assist stakeholders and:
- ensure that information provided once is automatically uploaded into multiple documents when required, such as funding agreement schedules, cover letters, and notice of successful and unsuccessful applications.
- reduce costs and workloads for funding recipients (and the Department) in both inbound and outbound information flows.
- will help to ensure funding applications are complete, as the system uses a series of prompts to ensure appropriate information is provided before documents are submitted.
- reduce applicant workloads and increase the likelihood of the application meeting all minimum criteria for further consideration.
- Applicants will no longer have to provide multiple hard copies of documents, reducing costs of paper, printing, postage and couriers in delivering documents to Departmental tender boxes.
- Additionally applicants will know their applications have been received by the Department via an automated e-mail.
The use of Smart forms is now commencing, with the Specialist Training Program (STP) the first health workforce program to test the use of this technology. Applications for the 2014 STP selection round will be made online, avoiding the need for applicants to submit hard copies and potentially reducing the error rate in the application process by ensuring only complete funding submissions can be lodged. This application process commenced in late March 2013, and will provide an important test case for other programs.
Careful attention will have to be paid during the implementation phase of this reform process to ensure that the added use of technology is accompanied by reduction and streamlining of the compliance-based reports agencies are required to lodge.
The Department should develop a formal feedback mechanism with its major program stakeholders to enable evaluation of the benefits of these reforms from their perspective. This should commence from 2014-15. In some cases these feedback systems will already be in place as part of regular program communication systems. For other programs, discussions should be initiated by the Department to determine the best mechanism for ensuring funded agencies are able to provide feedback on the new grants management and applications processes.
Simplified funding agreement management processes
In considering its administrative arrangements during this review, the Department has advised that changes introduced as part of the broader DoHA National Alignment process will bring the following benefits for health workforce program activities:
- There will be consistent guidelines across all HWF activities.
- There will be increased flexibility of funding management across activity areas improving the ability to manage surplus funds more proactively.
- There will be a Department-wide use of standard, consistent funding agreements, with simplified terms and conditions, which will:
- form the basis of all reporting requirements. Multiple activity schedules are able to be appended. Organisations will no longer need to re-negotiate agreement conditions for each project; and
- improve financial management for both the funding recipients and the Department.
- Some payments to fund-holders will be automatically released using recipient created tax invoices (RCTI) through the FoFMs system (subject to risk assessment) while others will be subject to milestone confirmation.
- The creation and use of RCTIs mean funding recipients will often no longer need to provide invoices to the Department, saving time and money and allowing service providers to concentrate on core business.
- There will be less onerous audit conditions for most funding agreements, subject to a risk assessment process, while retaining the ability to target activities more specifically in agreement schedules.
- Once fully implemented, funding recipients will have one agreement with the Department and one point of contact for all funding agreement activities. This departmental relationship manager will seek advice from and coordinate information flow between any areas of the Department that provide funding to that recipient. The relationship manager will be located in either a state or territory office or Central office, as required.
- New agreements will move towards multi-year funding to provide funding certainty for stakeholders and funding recipients. This aspect will commence once the current review recommendations have been considered.
The Department states that all facets of its National Alignment program are being closely monitored and external reporting mechanisms are in place to ensure that the benefits to stakeholders, in terms of reduced red tape, streamlined reporting and appropriate risk management strategies are implemented. The anticipated outcomes of this process in relation to grants management reform currently underway are closely aligned with the eight priority action areas identified in the National Compact described in the background section above. The Department’s view is that there are ongoing monitoring and reporting mechanisms to ensure the expected benefits of both the DoHA National Alignment and the National Compact flow to all stakeholders.
Advice from stakeholders in the course of the review was mixed as to whether the benefits of contract reform were yet seen to be occurring; and this is understandable given that key initiatives will only roll out in the next calendar year as explained above. It is true that some very experienced and senior stakeholders commented favourably on the efficiency and responsiveness of DoHA funding arrangements (sometimes in the context of highly unfavourable comments about funding practices within other related agencies, including state and territory health departments). However, other stakeholders continue to encounter unnecessary levels of compliance-based reporting, a lack of communication between different divisions of DoHA and what they experience as the imposition of unreasonable contractual conditions under tight deadlines.
Understandably, funded agencies frequently feel reluctant to raise such criticisms openly. The current reform process needs to be monitored and reported to senior management so that views can be sought from relevant peak bodies about the experience “on the ground” for funded agencies. Ideally, funding moves away from multiple process-oriented reports, gathering information which in the experience of funded agencies does not seem to be used or collated to inform policy development. In the same way, the Department itself needs outcome-based performance measures so that it is held to account for delivering measurable reductions in reporting and administrative costs.
Health workforce programs – Health Workforce Fund and the future
In the course of this review, the need for some specific actions in managing health workforce programs in addition to the broader departmental agenda have been identified, as there are a number of instances where inconsistencies and/or duplication of effort have been identified. These include a range of short and long-term funding periods, often based on historical arrangements, rather than current requirements, and that workforce activities are dispersed over a number of divisions within the Department as well as in other portfolio agencies.
There is strong evidence of siloed behaviour, with particular policy areas appearing to act in isolation from each other, perhaps inevitable in such a large and complex department.
An approach to health workforce that is concentrated in a limited number of areas within the portfolio makes sense, as despite the need for profession relevant involvement all health service provision requires an appropriately trained and distributed workforce.
This is more effectively and efficiently managed in areas that are able to take a whole-of-sector or global approach to identifying issues, trends and opportunities in developing policy related to workforce programs and in guiding the implementation of these programs.
Scholarship schemes, rural and remote practice, peer support or continuing education issues, to name a few, are not profession-specific activities, yet current program and funding levels indicate that divisions and agencies within the health portfolio run separate activities to manage these same issues. Additionally, many of these areas then run similar activities for different sectors of the workforce, such as aged care, acute care, or primary care. (Note that scholarship programs, and their administrative arrangements, have been discussed in detail in Chapter 3 of this review.)
While the separation of similar activities may or may not be appropriate, it makes sense to consider a range of options for amalgamating, streamlining, redirecting, or ceasing activities across the portfolio. This will assist in ensuring that limited financial and human resources within the health sector are effectively utilised.
Any program consolidation will need to be implemented in collaboration with other divisions. It will be important to ensure that workforce outcomes in particular areas such as aged care and Aboriginal and Torres Strait Islander workforces are enhanced rather than impeded by any changes in these areas. Portfolio Ministers in these areas will need to be closely involved in any changes to approach.
More effectively integrated policy development
The issue of new policy proposals related to specific activities that target a particular behaviour or disease group, such as drug and alcohol officers or healthy lifestyle and anti-smoking officers, was raised by a number of stakeholders during the consultation process. Funding for new workforce roles may conflict with existing arrangements and policy settings and can have unintended outcomes. They may fragment both holistic patient-centred care provision and limit the generalist workforce available to provide services to these targeted groups, due to outcome funding arrangements related to the specific disease group.
There is merit in developing a formal method to ensure that for new policy proposals or any activity streamlining and amalgamating programs, that an internal health workforce impact statement/check sheet be developed and implemented through collaboration between HWD and any affected divisions. This would ensure that appropriate areas within the Department have considered/noted potential workforce impacts and provided advice on options that would ensure an adequate workforce is available to implement the service delivery aspects of any new policy proposals, and that broader workforce impacts of new policy are considered.
In addition to internal departmental processes, health workforce activities are undertaken by a number of portfolio agencies, including HWA, and other Commonwealth agencies such as the Department of Human Services. Specific issues concerning the need for coordination between HWA and DoHA are discussed elsewhere.
A number of other Commonwealth Government Departments have a role in health workforce related activities including information collection and providing input into Australian Government policy positions. These include the Department of Immigration and Citizenship, the Australian Bureau of Statistics, the Australian Institute of Health and Welfare, the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (DIICCSRTE), the Department of Education, Employment and Workplace Relations, as well as the Department of Regional Australia, Local Government and Sport.
There are many very complex issues to be considered in planning for a future health workforce to ensure that the workforce is capable, well qualified and well distributed. These issues include the complexity and diversity within the health and education sectors that must combine to provide the necessary education and training of our health professionals. The geographic disbursement of the Australian population also impacts the various locations and specialty areas in which health professionals provide services and may inhibit equity of access to service by some more remote communities. Careful consideration of how the limited Commonwealth financial resources are allocated is required.
Program evaluation and risk assessment
During the course of this review, a large number of programs were identified which are more than a decade old and had been established without any evaluation framework or meaningful performance measures. Some of these programs have never been evaluated in a meaningful sense. Others have been established relatively recently.
As part of the implementation of all flexible funds and grant reform processes, central agencies (Department of the Prime Minister and Cabinet and the Department of Finance and Deregulation) have required DoHA to develop and seek approval for strategic management plans and risk assessment plans for all 18 flexible funds, including the HWF.
The HWF strategic plan incorporates an evaluation strategy and is required to be updated and approved by the Minister annually. The HWF risk assessment documents are also required to be reviewed and updated annually in conjunction with the strategic plan.
While the HWF as a whole has evaluation and risk assessment process and procedures in place, the review team has identified that not all individual activities under the fund are in a similar position. There is no overarching evaluation strategy for evaluating the individual health workforce programs. The review has identified and considered a number of internal reviews and external evaluations that have been conducted for various programs, program components and broader initiatives within HWD. Often evaluation has been hampered by the lack of clear measures or objectives put in place when the program was established. It is imperative that all programs and funding activity areas are able to demonstrate measurable outcomes that are achieving the policy intent of the funding supplied.
In some cases, individual programs which have been evaluated have later been consolidated into a single, more streamlined platform, particularly for those consolidated programs that were established following the Department’s broad rural program review prior to the 2009-10 Budget. For the most part, these are relatively recent consolidations and the new larger programs have not yet been subject to review or evaluation. Some program reviews have been conducted by the external administrators of the program as part of the conditions of their funding agreement while others have been commissioned directly by the Department.
The review has identified that approximately 50% of the overall number of programs and initiatives managed by HWD have benefited from a formal evaluation process (either internal or external) in the period since 2005. This excludes at least four major “lapsing program” reviews that were undertaken in the 2003 to 2005 period, which are subject to “Budget-in-confidence” rules and were subsequently not released to stakeholder groups and could not be considered in this review process.199 Programs that are still in their implementation phase also tend to distort the evaluation compliance figure to some extent and mention has been made earlier of some of the medical workforce programs in particular, which require a decade or more of operation before meaningful data is likely to be available. Nevertheless, it is safe to say that at least a third of established health workforce program activity areas have not been evaluated, which is of some concern.
Given this situation, it is recommended that a comprehensive evaluation strategy should be developed for the different health workforce program activity areas to complement the broader evaluation strategy that now applies to the HWF. In addition to developing a strategy and clear timeline for the evaluation of component initiatives, there should be considerable effort put into developing key performance indicators and evaluation reporting requirements as part of any funding arrangements, so governments can make informed decisions based on quantifiable data when allocating scarce resources, to achieved improved health workforce outcomes. These evaluation and risk assessment activities need to be compliant with the broader reform agenda within DoHA and the Australian Government.
The situation with risk management compliance is more positive. As mentioned above, a broad risk management plan is in place for the HWF and there are processes to ensure this is updated regularly. Internal risk management processes have been complemented by Australian National Audit Office scrutiny of major programs (such as the AGPT) as well as internal audits carried out by the Department’s Audit and Fraud Control Branch at regular intervals.
The review has identified some program and activity areas where risk management practices could be improved. While at least 70% of HWD program areas have detailed risk management plans in place, which are updated regularly for each program funding agreement, compliance with best practice needs to be improved at the detailed program level. There are instances where older program agreements do not appear to comply with standard risk management practices.
It is suggested that a comprehensive assessment of risk management compliance (at the program and funding agreement level) across health workforce programs should be undertaken following this review. However, any such review needs to be aimed primarily at driving out internal DoHA inefficiencies, and undertaken within the context of the broader reforms to contracting practices within the Department to ensure that there is no increase in onerous and unnecessary compliance and regulatory costs, particularly for contracted agencies.
|Recommendation number||Recommendation||Affected programs||Timeframe|
|Recommendation 9.1||The Health Workforce Division (HWD) should continue to implement the whole-of-department reforms to grants management, with a view to improving consistency of funding arrangements and achieving measurable reductions in compliance-based reporting and unnecessary focus on process rather than results. Regular feedback should be sought from peak groups as to whether the reform process is in fact achieving a reduction in red tape and administrative cost for funded agencies.
As part of this process, it will be important to:
|All Health Workforce Fund Programs||Short term – ongoing grants management reform.|
|Recommendation 9.2||Divisions within the Department should closely examine linkages in their health workforce programs and implement measures to reduce or remove duplication or overlap within their current programs.
To help ensure this occurs effectively, consideration should be given to establishing a formal and regular communication system between key divisions involved in health workforce programs.
|All||Short term and ongoing|
|Recommendation 9.3||In the development of new policy proposals, the department should give specific consideration to health workforce impacts, potentially through the preparation of new internal health workforce impact statements.||Policy development||Medium term – ideally to commence for the 2014 Budget process and beyond.|
|Recommendation 9.4||A comprehensive evaluation strategy should be developed for the various health workforce programs and activity areas. This should be designed to ensure consistency with the broader evaluation framework of the HWF and be applied consistently across all funding activities. In particular, new programs should not be rolled out without an outcome-based evaluation framework.||HWF and health workforce programs outside the fund||Short/medium term – post-review work to commence in 2013-14.|
|Recommendation 9.5||A comprehensive assessment of internal DoHA risk management compliance across all health workforce program activity areas should be undertaken following this review. In addition to the broader risk management plan for the HWF, component initiatives should have risk management plans in place and update them consistently. Any such review needs to be undertaken within the context of the broader reforms to contracting practices within the department.||HWF||Short/medium term – post-review work to commence in 2013-14.|
199 Lapsing program reviews involved considering a program in a Budget context at the end of a four year funding cycle, prior to the government of the day making a decision on renewing funding.