Funding and regulation of primary health care for Aboriginal and Torres Strait Islander people

The aim of this project was to improve the effectiveness of funding models and regulatory arrangements for Aboriginal primary health care.

The Aboriginal Community Controlled Health Services (ACCHSs) sector is the only sector of the Australian health system that BOTH provides an essential comprehensive primary health care service AND does so from a base of fragmented funding contracts. This project aimed to expand understanding of current problems and identify possible solutions in the way that Aboriginal-specific primary health care is funded and regulated across jurisdictions, from the point of view of primary health care provider organisations. In this project, the terms funding and regulation were used to mean the size and shape of the funding and revenue primary health care providers receive, the related conditions, reporting requirements and accountability measures, and the structure of the relationships between funders and providers. Project activities involved mapping and analysing current primary health care funding and regulatory models as applied to primary health care providers in all Australian jurisdictions, based on existing information and using a relational contracting framework adapted from the work of Associate Professor Josée Lavoie and others.

Note: the meaning of the term ‘overburden’

The term ‘overburden’ comes from the mining industry, where it is used to refer to the soil, rock and other materials that must be removed to get to the ore. We used it in this project to mean the administrative work that has to be done by providers and funders to allocate, acquire, manage, report on, and account for funding and the services and other activities it was used for. These are overhead expenses and should be kept to a minimum.

Key findings

  • ACCHSs are funded in more complex ways, and from more sources, than most other health care organisations (of equivalent size). These arrangements get in the way of effective health care for two main reasons:
    • i) it is difficult to pull together a comprehensive primary health care service from a series of specific purpose grants (with separate reporting requirements). Primary health care needs to be responsive to the whole person or family, regardless of the number of different kinds of health needs they have. Targeted funding (eg for hearing problems) will only work when there is core funding of services to support it.
    • ii) the amount of time and effort that goes into preparing and processing reports is out of proportion with the funding levels; and reporting requirements are often focused on ‘counting heads through the door’ rather than monitoring the health outcomes of the people.
  • The complex contractual environments in which ACCHSs work are not monitored or managed in any consistent way. They have emerged from a series of unlinked policy and program decisions, and simply grown over time. Health authority staff are aware of these problems and there is a widespread effort to address them. However, it seems that the implementation of intended reforms is slow and patchy, particularly where cooperation between two levels of government, or different government departments, is required.
  • Staff on both sides often act as if they are in long-term funding relationships, even though the contracts are generally short-term. This means that the intended advantages for governments of the existing contracts (e.g. retaining the power to cease funding) are not achieved; while at the same time the advantages of relational contracting (such as long-term commitment to programs on the ground, reduced transaction costs and improved staff retention) are not achieved either.
  • The funding from governments is packaged in ways that don’t match with the way services are delivered on the ground, which means the reporting burden on services is very high

The findings highlighted that:

  • Governments (as part of their efforts to ‘close the gap’) are committed to the development of a robust community-controlled health sector delivering comprehensive primary health care for Aboriginal and Torres Strait Islander people.
  • The implementation of this policy goal is compromised by the use of complex fragmented funding contracts.
  • Successful implementation of government policy commitments will require a different way of thinking about the relationship between government and the sector, with implications for both sides.
  • An approach based on relational (or alliance) contracting will offer ways of improving both health care delivery and accountability. Relational contracting in this field would recognise the long-term relationship between health authorities and ACCHSs and seek to maximise the common interests of the parties in the partnership.

This project has provided a national overview of the arrangements across states and territories and a clear conceptual framework, informed by Indigenous specific values and priorities and the experience of stakeholders (both providers and funders). It proposes a framework of criteria against which the effectiveness of funding and accountability approaches can be judged, and improved. These outcomes will enable rigorous analysis and trialling of alternatives in future work by industry and researchers.

Summary of project implementation

The project explored two research questions:

  1. What are the major enablers and impediments to effective PHC delivery embedded in the current frameworks of funding and accountability for PHC services to Aboriginal and Torres Strait Islander people, in Australian States and Territories?
  2. How could the effectiveness of funding and accountability arrangements be improved, drawing on insights from current Australian practice and international comparisons?

This project investigated the impact of funding programs as implemented in terms of administrative complexity, the burden of conditions and reporting and accounting requirements, effect on comprehensiveness of service provision and on workforce (recruitment, retention and skillmix). It used a relational contracting framework for understanding the dimensions of the funding policy and programs (which was adapted by Lavoie for use in an Indigenous context)1, to analyse the characteristics of funding and related policy in five main dimensions: nature of funding, priority setting, monitoring, transaction costs and risk. The major activities were:

  • Relationship and commitment building with key stakeholders.
  • Compilation of a policy and funding ‘map’ across Australian jurisdictions, based on analysis of current PHC funding models as applied to PHC providers. This involved desk-review of public policy documents and internal documents supplied by stakeholders; and interviews with key informants in each jurisdiction to ‘reality test’ the results of the desk review.
  • A study of the financial and activity reports of a sample of 21 ACCHSs (for the 2006/07 financial year). This is reported in an analysis of the sources, purposes and reporting requirements of the funding they received. A report analyzing the results of the above.
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Acknowledgement of Country

We acknowledge the traditional owners of the land across Australia and pay our respects to their Elders past, present and future. Aboriginal and Torres Strait Islander people should be aware that this website may contain images, voices and names of deceased persons.