14th Greek Australian Legal and Medical Conference
Cape Sounion, Greece 2013

Public Hospital Reform –

How could a barrister know what to do ?


In September 2007, a young woman, Jana Horska arrived at the Emergency Department of the Royal North Hospital with her husband.  She was 14 weeks pregnant, and experiencing symptoms which indicated that that she may be about to miscarry.  Having been assessed by the triage nurse, she was categorised as being needed to be seen within one hour.  She did not receive treatment with an hour, and after two hours of acute pain, she miscarried in the hospital toilet in distressing circumstances.

Her experience received widespread media coverage which included accounts, often harrowing, of other similar events.  These reports initiated wide ranging publicity in the media which served to promote the public’s fear about access to adequate treatment at public hospitals. The headlines included publicity about the dissatisfaction of doctors and nurses with the system in which they had to provide care.

The headlines identified a chronic lack of funding, staffing and beds, low wages, heavy responsibilities, long shifts and poor staff relations were identified, emergency doctors complained of dirty facilities, a lack of staff and resources and a disconnect between medical staff and hospital administration.  Senior doctors expressed concern that emergency departments were largely staffed by junior and inexperienced locum doctors, routinely having to make life or death decisions without supervision.

Two inquiries were undertaken, one by NSW Health into Ms Horska’s treatment.  Another was established by the NSW Parliament to inquire into the operation of the Royal North Shore Hospital generally. These inquiries reported in October and November of 2007. Things didn’t really seem to have calmed down.

But the NSW Government went away for Christmas, in the despairing hope that the public outcry over public hospital care had been, at least temporarily, assuaged.

However, on 24 January 2008, the NSW Deputy State Coroner reported on the death of a 16 year old young girl, Vanessa Anderson.  She had been admitted initially to the Hornsby Hospital, and then transferred to the Royal North Shore Hospital, having been struck in the head with a golf ball while playing golf. A few days later she died.

The report of the Coroner made for heartbreaking reading.  He identified poor communication between doctors, staffing inadequacies, non-existent or else inadequate medical notes, poor clinical decisions, ignorance of existing protocols and incorrect decisions by nursing staff.  The Coroner lamented than in Vanessa’s case almost every conceivable error or omission had occurred and continued to build on top of one another, leading to her death. 

He concluded his report in this way:

“It may be timely that the Department of Health and/or the responsible Minister, consider a full and open inquiry into the delivery of health services in NSW.”

The Political Context

Vanessa Anderson’s case had come on top of the incident involving Jana Horska and the two Inquiries, neither of which had really succeeded in removing entirely the significant adverse media publicity.  Ongoing chronic problems which were encapsulated in daily media stories suggested that the public hospital system was entirely broken.

At a purely political level, the Minister for Health was being required, almost daily, to defend the indefensible.  Clinical reality and clinical challenges had become political liabilities.

The Premier, and the Director-General of the Premier’s Department, had previously been the Minister for Health and the Director-General of Health.  They were potentially at risk of continuing adverse criticism.  But more importantly, they knew enough of the situation, which meant that they recognised a singular opportunity for significant reform.  They became proponents, and strong ones, for reform.

The Government’s Solution

The NSW Labour government had, shortly after coming into government, seen the Royal Commission in to the Police Force conducted, and very successfully so, by Justice James Wood.  That Royal Commission had been, as well as the more public of its achievements in identifying particular incidences of corruption, the catalyst for both organisational change and public policy reordering. 

As well, the Government had during its time used Special Commissions of Inquiry to investigate two railway accidents in metropolitan Sydney which had led to 14 deaths and over 80 serious casualties on the railway system, the widespread contamination of Sydney’s drinking water, and commercial sector disasters such as the collapse of the HIH Insurance Company and the restructuring of the James Hardie Group of companies.

All of these instances of public inquiry, seduced the government into the view that a Special Commission of Inquiry was useful as an agent of change, as a tool for organisational restructure and as the catalyst for significant public and government policy revision.

Whilst the Wood Royal Commission had been conducted by a Supreme Court Judge in an area which directly related to his expertise and lifelong work in the criminal justice system, public hospital reform was a very much bigger ship, and required significantly different approaches. 

But, the government, comfortable with the experiences of lawyers conducting commission of inquiry, took the view that a content free commissioner who had no past in working in public hospitals, would be suitable.

And so on the same day as the Coroner released his report into Vanessa Anderson’s death, the Premier announced the formation of a Special Commission of Inquiry into Acute Care Services in Public Hospitals.

The peace of my summer holiday in Tasmania was rudely interrupted by a telephone call from the Deputy Director-General of the Premier’s Department. 

The Nature and Complexity of the NSW Public Hospital System

In providing this description to you, much of the statistical information was that which existed during my enquiry.  However, I am confident that the picture which they reveal remains current.

There are 251 public hospitals in NSW ranging in size from the major metropolitan hospitals such as Royal Prince Alfred Hospital, to remote Multi-Purpose Services in towns like Wilcannia and Bourke.  The task of reform encompasses all of these hospitals and all of the services which they provided. 

The workforce of NSW Health consists of over 90,000 full-time equivalent staff.  If NSW Health was a publicly listed company, it would probably be the fifteenth largest public company in Australia.  It provides public hospitals and healthcare to a population in a geographic area which is about the same as Pakistan, larger than each of France, Spain or Germany and significantly larger than the geographic area of the United Kingdom or Greece.

As well, the population serviced by NSW Health is not evenly distributed.  The great bulk of the NSW population lives between the coastline and the Great Dividing Range.  The Great Dividing Range provides a sandstone curtain through which qualified health professionals, including doctors and nurses, find it difficult to pass.

The 251 public hospitals in NSW provide about 19,170 hospital beds which represents approximately one third of the Australian public in-patient beds.  Private hospitals in NSW have a further 6,208 beds, which comprise about 24% of the total hospital beds in the State.  NSW has a slightly higher ratio of 2.8 public beds per 1,000 people than the national average of 2.6.  By way of comparison, Victoria has an average of 2.3 public hospital beds per 1,000 people.

Historically, public hospitals were developed by communities as settlement spread across NSW.  The communities built hospitals because they were seen as an important step in the creation of the community.  All towns of any size had a hospital.  The nature of this development did not necessarily reflect the most efficient allocation of resources.  The nature of the evolving system of hospital construction and planning was one which reflected compromise rather than rational planning. 

Perhaps the nature and complexity of the public hospital system is best illustrated by understanding a typical day in NSW Health. In a typical day for NSW Health across the State of NSW there will be:

Some other features ought be identified.  It is well recognised that demographic changes mean that Australia has an aging population which will require proportionally more care as the population ages.  13.5% of the State’s population are aged over 65 years, but patients of that age group make up 45%, nearly one half, of hospital patients.

Approach to reform

It became necessary at the very start of the inquiry to identify the way in which the Inquiry could lead to reform. I identified six steps to a lasting reform of the public hospital system which the Inquiry needed to address. 

The first of these was to identify the existing state of NSW Health.  By that I mean, the Inquiry needed to learn quickly and as comprehensively as possible, what was actually happening within the public hospital system.  And it needed to discover that state from all perspectives, particularly not just from those at the top.

The second step was to identify and articulate the blockages to reform.  Unless these blockages were identified, understood and then addressed, any proposed reform was unlikely to succeed.  As an example, it became immediately obvious that the first and most obvious blockage to reform, in an organisation the size of NSW Health, is the fear of change itself.  People are comfortable where they are, and when they know what they are doing.  Political tinkering or changes by anyone from “outside” the system are regarded with a high level of suspicion and unstated opposition. I will outline the other blockages which were identified as well.

The third step in public hospital reform is to identify the principles to which the end point of the reform should adhere.  There is little point in propounding reform without a principled basis for it, and since reform will be a continuing process, one hopes that whatever form it takes, it will adhere to the underlying principles identified.

The fourth step in the reforming process is to identify, and if necessary create, the enablers of reform.  These are the tools and structures by which reform will take place, and will be sustainable.

The fifth step, which is the one which gains the most publicity but which is perhaps not so deserving, is to recommend the reform which is necessary.  For a reason which I suspect relates to the media’s appetite for headlines, short stories and sound bites, any Inquiry’s recommendations for reform seem to attract the most attention.  In many ways, the success of an inquiry is measured by how many recommendations the Government adopts.  Regrettably, few people ever ask, after 5 years, whether any of those recommendations adopted have been given effect to, and if so, how successful they are.

The final step in undertaking public hospital reform is for the reform process to be mapped out on a pathway which permits efficient reform, but which does not interrupt the day-to-day conduct of the existing operations, together with a process for the public monitoring of reform, and ongoing public information about the reform. 

Existing state of NSW Health

In order to establish an understanding of the state of NSW Health, the Inquiry undertook the following measures:

This intense program enabled, over a period of about 6 months, the Inquiry to gain an understanding of, and to identify the existing state of, the public hospital system in NSW.

As a matter of statistics, I visited 61 public hospitals, heard evidence from 628 individuals, received 1200 written submissions from over 900 individuals and organisations, conferred with 27 peak bodies, and received over 65 briefings.

Blockages to Reform

The first significant blockage to reform was the fact that good working relations between clinicians and hospital management (and NSW Health), had completely broken.  If reform was to take place, trust needed to be restored between these important elements of the public hospital system.  There needed to be better communication and understanding between them. There needed to be clear role delineations and clear delegations.

The second principal blockage to reform was the political and public expectation, which is wholly unrealistic in clinical efficiency terms, that every electorate, every town and every community should have a hospital which can provide all hospital services which may be required from time to time. 

Public outcries by communities about changes to “their hospital” are understandable as an immediate reaction.  But these expressions of view, which commonly prevail and are supported by local politicians, are necessarily sectional and partisan.  For so long as these views hold sway, significant public hospital reform by the shutting of expensive inefficient hospitals, or else by clinical redesign of services being provided, will not succeed.

The third blockage to reform is the complexity of the funding arrangements of public hospitals in NSW and other states of Australia.  In understanding reform of the public hospital sector, it is necessary to have regard to the fact that, at least until recently, public hospitals were funded on historical budgets which did not relate to workload.  Activity-based funding was not, at the time I conducted my inquiry, widely introduced.  Because the funding arrangements were complex, involving funding from the Commonwealth and the State, and as well different funding arrangements for primary health care in the community and for aged care also being provided in the community, or else in aged facilities, a great deal of time and effort was spent in NSW Health both on cost shifting between sectors and resisting cost shifting by the Commonwealth.  Public hospitals were reluctant to accept that they provided services ordinarily provided by general practitioners.  The demand for beds and aged care facilities, which is growing, could be managed by the aged care sector by covertly using strategies to ensure that people stayed in public hospital beds longer than they efficiently might.

The fourth blockage to reform was what can be identified as the silo or empire mentality of public hospitals, their departments and their staff.  Because of the historical development of public hospitals in NSW, particularly the major public hospitals and the major district hospitals, they saw themselves as single institutions and not part of any state-wide system.  Within these silos, individual departments and sections competed to construct empires where reputations of individuals were enhanced and spheres of influence were created.  But, the reform with which I was charged was the whole of state reform.  Modern health systems deal with networks and the provision of services rationally across the whole state and not just within individual hospitals which do not connect with any other part of the system.

The fifth blockage to reform which I identified, was again a matter of historical development.  Historically there had been a significant and rigid demarcation between roles and clinical functions, particularly in Emergency Departments.  But in times of cost and resource pressure, lack of fully trained staff and a significant increase in the demand on the system, reforms could not happen if such an historical demarcation continued. 

The End Principle

In my research, I read the Report of a 1924 Royal Commission into Public Hospitals. That report concluded with a quote from Cicero who said: “Salus populi suprema lex esto”

In other words, the welfare of the whole of the population is the supreme law. It struck me that 85 years later, there was no need to reinvent the guiding philosophy for a public hospital system.

Accordingly, I concluded that the end principle for a public hospital system must be that every person who comes to be cared for in a public hospital should be treated with respect by an appropriate skilled clinician, in a safe and cost effective way, to achieve the best possible outcome for the patient.

I acknowledge that there can be seen to be a tension between this statement and the economic reality.

As Porter and Teasberg said in their seminal text, Redefining Health Care:

“Health care is on a collision course with patient needs and economic reality.  Without significant changes, the scale of the problem will only get worse.”

Enablers of Reform

The first enable of reform was the inquiry itself, and the report in which it culminated.  There are a number of features of this which are not to be underestimated.  The first is that because the enquiry was conducted independently of NSW Health by a non-medically qualified person, it was broadly thought by many workers in NSW Health that a fresh perspective which would not be weighed down by the past, would enable real reform. 

The second relevant consideration was that because the inquiry went out to hospitals, and heard people in their workplace, it was more accessible to the staff of public hospitals would could come and observe the inquiry as it took place.  As well, there was provision for confidential evidence to be taken in circumstances where the particular witness may feel at risk from the nature of the evidence being given. 

The third feature of the inquiry, was that by enabling a public airing of concerns, the staff of public hospitals felt that they had been heard and their concerns listened to with respect and as fully as time permitted. 

Finally, the crafting and writing of a report in relatively plain English, and in particular, the inclusion of an overview volume, meant that it was readily accessible and, since it was made available electronically on the internet, able to be read by those who were interested.

The very fact that an inquiry was able to, in effect, rule a line and talk about progress and change from that time forward, meant that, as I discerned it, people were more open to reform and change.  In this way the Inquiry and the report was an enabler of reform.

The second enabler of reform was the acceptance of an important principle for a system of public hospitals, which can conveniently be called the “critical mass theory”.  The notion of critical mass is important because it acknowledges a relationship between volume of patient load and the necessity of safety and quality in the delivery of health service.  It puts safety and quality as the principal determinant. 

I firmly hold to the view that it is essential to keep safety and quality as the principal determinant of patient care.  For example, in some specialised areas of medicine, clinicians need to treat a good number of patients each year in order to maintain their specialist skills and competencies.  As examples of this, in NSW, all adult heart transplants are carried out at one hospital.  There is one principal burns unit. Centralisation of all such cases to one specialist unit has the advantage of attracting specialists interested in a forming a centre of excellence.  It also means that greater investment can be made in the facility and equipment than if two or three or four such units had to be supported across the State. Ultimately, the patients of the unit get better care and there are better outcomes.

However, the concept of critical mass is at odds with having every acute care service conveniently accessible at most hospitals in the State. Critical mass theory is now accepted as being a non-controversial element of the modern networking and systems of hospitals.

The third enabler of reform is information, or data about the performance of public hospitals.

Broadly speaking, public reporting of information and data improves safety and quality in two ways.  First, it changes consumer behaviour so that better informed consumers demand quality health care, and poor performance is disciplined by the market of public opinion.  Secondly, it helps poor performers to identify that fact and the problems with their processes and, thus leads to an improvement in their performance.

But to me, making information or data publicly available goes further than such received wisdom.  I am firmly convinced that public reporting of information about a health system and public hospital performance improves patient choice and encourages improvement in all services.  It seems to me that it is the single most important enabler for the creation of public confidence in the health system, engagement of clinicians, improvement and enhancement of clinical practice and cost efficiency.

In a single unitary government public health system from which true competition is absent, the widespread availability of information and data creates real competition.  Enabling a hospital or a unit or ward to compare its performance against like hospitals or units or wards, and to obtain a sense of where its performance and its safety and quality falls on the spectrum of similar performances, is a clear driver of improvement.  I have never met a professional who likes to think that it is a sufficient performance of their duties if they are not doing as well, if not very much better, than their professional peers. 

An IT system which enables the delivery into a repository of information, and the collation and dissemination of that information back to the hospitals, units and wards, is the essential tool for the provision of this information.  Information that is six months or more out of date is of limited use in respect to driving improvement.  In due course there is no reason why information should not be, in effect, almost real time information. 

In my report, I recommended that information and data be collected and made available which addressed each of the following areas:

I concluded that the provision of information in these fields would lead to an improvement of public hospitals.

The fourth enabler of reform is innovation and clinical improvement.  The two obvious and essential features of public hospital care in Australia are first, that public hospitals are being required to provide more care to more patients within existing resources at an increasing level of sophistication and complexity.  Secondly, the cost of doing so is increasing at a much higher rate than the ordinary CPI.  The availability of funds to public hospitals is not increasing at the same rate. 

It is an old story: increasing demand, greater complexity, greater cost and less money available to achieve the task. 

Besides having a public discussion about the expectation of the public as to what they are getting from their public hospital system, thereby either increasing the amount of money available or, alternatively, reducing the range of services provided, it is the system itself which must takes steps to manage the tension existing between these features. 

In my view, it can only do so by providing services in a smarter and more cost-effective way.  Identification of innovative models of care which involved better use of IT and other “smart” technology leading to shorter stays in hospital, when combined with staying at the leading edge of developments, with a staff that can continuously be updated as to those developments, all combine to be an enabler of public hospital reform. 

It was obvious when one looked across the system, that individual units or wards had devised and implemented very innovative solutions to particular problems, but the issue for a public hospital system was the implementation of that innovation across the system.  Information about what is being done, how it is working and how it can be implemented in other hospitals is essential to be gathered, sorted and promulgated.  As well, champions of innovations in particular areas needed to be identified and empowered.  One solution to this issue is to devise and use clinical networks of health professionals in particulars areas of expertise whose function it is to be champions for and messengers of new innovative models of care. 

The fifth enabler of reform is a heavy emphasis on safety and quality.  The error cost to any system can be significant.  The savings from the elimination of error cost can be dramatic.  The savings are clear in monetary terms, in terms of the occupation of beds, in medication terms and in the time and effort of clinical staff to treat the patients who are the victims of error.

Importantly, error significantly affects individual patients and their families, thus inducing a loss of public confidence in the system as a whole, which then adversely affects the stability and mood of the workforce. 

A strong safety and quality assurance organisation, which is entitled to require of Local Health Networks or other operating entities, real adherence to safety and quality initiatives is essential. 

The NSW public hospital system at the time of my inquiry, had a hospital acquired infection rate of about 15%.  Proper hand washing techniques and infection control techniques are well recognised in the safety and quality field.  Unless there are programs to require those techniques to be adopted, supervision of them and publication of their results, there will be no improvement in that area, and the enormous cost to the system of hospital-acquired infection will continue.  In some hospitals in the US, staff are on a mandatory “three strikes and you’re out” requirement with respect to hand washing.  If you are observed by independent observers monitoring hand washing to have treated three patients without first washing one’s hands, then that is a sufficient basis for dismissal.  The hospital acquired infection rate in that circumstance has plummeted and is now almost zero. 

Whether such an approach would be effective in Australia is beside the point, because what is obvious is that a proper emphasis on safety and quality drives significant improvement in the public hospital system. 

The last significant enabler of reform is education and workforce.  The workforce of today is a multi-skilled workforce. Just because a person is training to be a doctor, does not mean that the best person to train them in everything which they will do is a doctor.  Think, for example, of how many times a skilled laboratory technician will take blood from an individual.  They will do so many hundreds more times than will a doctor.  There seems to me to be no reason why the skilled trainer of laboratory technicians ought not be training doctors, nurses and anyone else who has to take blood in how to do it quickly and efficiently. 

Probably the best person to assess how to bandage a soft tissue injury is a physiotherapist.  It is they who should be teaching their colleagues of all kinds, how to do so.  I very much doubt that an orthopaedic surgeon would be the best trainer for such a task.  Yet, that is largely the way things were being done in NSW. Historical demarcations were the rule rather than the exception. They are costly and inefficient. Team work is now of the essence in much of modern medicine, yet the team members were taught to do things differently by their own professions. Encouraging a greater emphasis on clinical education in teams and not just by profession, and ensuring adequate education in the clinical setting was the enabler to ensure that young doctors, nurses and other health professionals who need to know what to do and how to do it, will be adequately skilled. 

In other words, reform of public hospitals requires flexibility and combined education. 

Principal  Recommendations

I made 139 recommendations, ranging from relatively routine issues, to small steps which I thought would make a real difference such as a system for role identification in the disaster zone like conditions of Emergency Departments

But the major reforms called for the establishment or else strengthening of four bodies which I called the "pillars" upon which the reforms would be centred.

The first pillar was the establishment of the Bureau of Health Information. It was to be a board controlled statutory corporation, the principle tasks of which were to provide information about performance and performance differences which could then be used as a tool of clinical improvement.

The second pillar was the strengthening of the Clinical Excellence Commission, a body which already existed under the outstanding leadership of Cliff Hughes, but which needed to have its role acknowledged and supported. The CEC is the body devoted to safety and quality of public hospital healthcare services. Allied with this recommendation was one which effectively called for the abolition of the Safety and Quality Branch of NSW Health which was located in its head office and which reviewed, and often disapproved of, initiatives taken by the CEC. The existence of two bodies caused confusion, delay and ultimately a lack of effect.

The next recommendation called for the establishment of a third pillar which is called the Agency for Clinical Innovation. The main task of that Agency, which is managed by clinicians and relies upon clinical networks for its work is to devise innovative cost effective models of care which provide for the delivery of equal care to all patients across NSW. The Agency was based on the work of the Greater Metropolitan Clinical Taskforce, but was intended to work on a much broader basis and to include cost justicifications for its proposed models of care.

The fourth pillar was the creation of an Institute of Clinical Ecucation and Training which grew out of the Institute of Medical Education and Training. In other words, what was being done for doctors had to be done for all clinical workers, with an emphasis on team training, and the development of clinical leadership skills which would enhance clinical standards in the workplace.


Regrettably, time does not permit me to describe all that the report encompassed, but I hope that I have given you some insight into the nature of public hospital reform and how a barrister went about trying to help the NSW public hospitals address the multitude of issues which they had.