Productivity Commission calls for customer focused reforms in human services

| March 27, 2018

The Productivity Commission has released its final report on the need to improve the quality and delivery of human services to the public, 5 months after sending it to Government for consideration on October 27 2017.

The inquiry examines ways to put the people who use human services at the heart of service provision. The Commission argues 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.

Context

The report acknowledges that human services sector plays a vital role in the well-being of the Australian population. It covers a diverse range of services, including health, education and community services, ranging from job services, social housing, prisons and aged care to disability provision. While some features that are common across the range of services and models of service provision, other features are unique in nature.

Complexity arises from differences in the characteristics of the services, and of the individuals receiving the services, the objectives sought, and the jurisdiction and market in which the services are being supplied. While governments have made progress in introducing competition, contestability and user choice to human services provision, the efficiency and effectiveness of the delivery of services within the sector varies significantly between jurisdictions.

Service delivery frameworks in the human services sector that are inefficient and/or ineffective can result in significant costs to the economy and individuals, including poorer outcomes and reduced productivity.

Australia’s human services sector is facing significant challenges, including increasing demand for services due to the ageing population, the effect of technology and cost increases associate d with new and more complex service provision demands.

Finding innovative ways to improve the efficiency and cost effectiveness of the human services sector, and to target services to those most in need, will help ensure that high quality service provision is affordable for all Australians and leads to improved outcomes for the economy and individuals.

6 Sectors to target for change

Human services are essential for the well-being of individuals and their families, and underpin economic and social participation. Ensuring that everyone, regardless of their means or circumstances, has access to a minimum level of high-quality human services promotes equity and social cohesion, which in turn contributes to the welfare of the community as a whole.

A huge number of services are provided each year in Australia.  There were more than 10 million admissions to public and private hospitals in 2015. Other services, such as homelessness services and social housing, are each used by hundreds of thousands of people every year.

Public and private expenditure on human services is significant — over $300 billion in 2014-15 — with demand for services projected to grow as more people live longer, incomes grow and technological advances increase the types of services that can improve a person’s quality of life.

The study report identifies six services for which the introduction of greater user choice, competition and contestability would improve outcomes for the people who receive them and make more efficient use of public funds.

These services are: end‑of‑life care services; social housing; family and community services; services in remote Indigenous communities; patient choice over referred health services; and public dental services and this final inquiry report sets out tailored reforms for those six services.

Although there is no one-size‑fits‑all competition solution, users should have choice over the human services they access and who provides them, unless there are sound reasons otherwise. Choice empowers users of human services to have greater control over their lives and generates incentives for providers to be more responsive to their needs.

Competition and contestability are therefore means to this end, rather than ends in themselves, and so should only be pursued when they improve the effectiveness of service provision.

The report offers a host of specific recommendations as part of its overall argument that a stronger focus on users, better service planning and improved coordination across services and levels of government is required. It believes that Governments should focus on the capabilities and attributes of service providers when designing service arrangements and selecting providers — not simply the form which any particular organisation may take.

End of life care

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 fully reflect their choices or meet their needs. Reforms are needed to significantly expand community‑based palliative care services and to improve the standard of end‑of‑life care in residential aged care facilities.

Social housing

The social housing system is broken. A single system of financial assistance that is portable across rental markets for private and social housing should be established. This would provide people with more choice over the home they live in and improve equity. Tenancy support services should also be portable across private and social housing.

Family and community services

Family and community services are not effective at meeting the needs of people experiencing hardship. Practical changes to system planning, provider selection, and contract management would sharpen focus on improving outcomes for people who use these services.

Indigenous services

Current approaches to commissioning human services in remote Indigenous communities are not working. Governments should improve commissioning arrangements and should be more responsive to local needs. This would make services more effective and would lay the foundation for more place‑based approaches in the future.

Patient choice

Patients should have greater choice over which healthcare provider they go to when given a referral or diagnostic request by their general practitioner. A simple legislative change would help. More patient choice would empower patients to choose options that better match their preferences. Public information is needed to support choice and encourage self‑improvement by providers.

Dentistry

Public dental patients have little choice in who provides their care and most services are focused on urgent needs. Long‑term reform is needed to introduce a consumer‑directed care scheme. This would enhance patient choice and promote a greater focus on preventive care.

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