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Productivity Commission Calls to Put People ‘At the Heart’ of Human Services

27 March 2018 at 4:33 pm
Luke Michael
A new Productivity Commission report has made a number of recommendations for reform in human services, hoping to put people “at the heart of service provision”.

Luke Michael | 27 March 2018 at 4:33 pm


Productivity Commission Calls to Put People ‘At the Heart’ of Human Services
27 March 2018 at 4:33 pm

A new Productivity Commission report has made a number of recommendations for reform in human services, hoping to put people “at the heart of service provision”.

The Productivity Commission undertook this inquiry to “examine policy options that apply the principles of informed user choice, competition and contestability to the provision of human services”.

After releasing a draft report in June 2017, the commission sent its final report to government in October last year, and on Monday made it publically available.

The report said change was needed in human services to enable people to have a stronger voice in shaping the services they received and who provided them.

The commission identified six services which needed reforms to improve outcomes: 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.

It called for a stronger user focus, better service planning and improved coordination across services and levels of government.

The commission said the focus should be put on users especially through competition and contestability.

“Competition and contestability are a means to an end. Used well, competition and contestability can be a powerful mechanism for improving the effectiveness of service provision. But competition and contestability should only be pursued where they improve outcomes for service users and the community,” the report said.

“Competition (as an adjunct to user choice) delivers strong incentives for providers to be more focused on people who use services.

“Efforts by a provider to attract users can include improving the quality of the service they offer, reducing the price that they charge or tailoring their services to better meet the needs of the people they serve all of which are beneficial to service users.”

However the Australian Council of Social Service warned that introducing further competition into human services provision could be a significant risk.

ACOSS CEO Dr Cassandra Goldie said: “The reality is that finding examples of human service delivery that lend themselves to further competition or contestability is challenging, if not impossible.

“We’ve seen how disastrous the experiment has been in other areas where competition has been introduced, like in vocational education and training. It has led to costs rising, consumers being placed in inappropriate courses through aggressive sales practices, and quality reducing significantly across the sector.

“The Productivity Commission report clearly demonstrates that any further expansion of competition in human services carries risks, and in significant areas has recommended that further competition is not appropriate at this time.”

The commission noted that a number of organisations “questioned whether competition and contestability should have a place in the provision of human services”.

“Anglicare Australia, for example, in its submission did not accept that competition is a driver of efficiency; that efficiency is an inherently good thing in human services; that the innovation that comes with competition between providers is of benefit to service users; or that it is appropriate to equate individual consumer choice with agency and wellbeing,” the report said.

“The commission does not agree. Well-established markets for schools, optometrists, general practitioners and allied health professionals, for example, demonstrate the value that choice and competition can bring to people who use those services and the community as a whole.

“Problems can emerge if competition and contestability are poorly implemented and governments need to learn from the lessons of the past… These issues emphasise the importance of good government stewardship.”

Responding to the commission’s comments, Anglicare Australia executive director Kasy Chambers told Pro Bono News that the provision of human services could not be left to the market.

“From the beginning, Anglicare Australia has believed that this inquiry should be about enabling governments to do what markets cannot, ensuring that opportunities are shared and that everyone has enough to live a decent life,” Chambers said.  

“We have seen marketised approaches fail in health, energy, and vocational education. We do not want to repeat those mistakes in social housing and other critical services.

“That’s why we should focus on putting people at the centre of human services – something that the market won’t do on its own.”

The commission also disagreed that for-profit providers should be banned from delivering human services.

“Some participants stated that for-profit providers should be excluded from delivering human services arguing, among other things, that providers incentivised by profit are not suited to offer high-quality services to vulnerable people,” the report said.

“The commission has a different view. Human services are currently provided by a mix of government, not-for-profit and for-profit organisations. Experience shows that no one type of provider has a monopoly over good service provision and each has had successes and failures.

“Governments should focus on the capabilities and attributes of service providers when designing service arrangements and selecting providers — not simply the form of an organisation.”

But Goldie noted that not-for-profit providers added value to human services without taking money out of the service system.

“Not for profits, are focused on their mission, and often service remote localities and work with the most complex clients. They usually reinvest surpluses in service delivery, ensuring that funds invested remain in the service system. These are just some of the ways that not for profits add value to the services they deliver,” she said.

“On the other hand, we know that for-profit providers are focused on making a profit, and will prioritise services that generate the highest profits. They also take vital money out of the service system through dividends to shareholders.

“We need to put people at the heart of how we determine what services are needed, and how we design the services that will be delivered. We don’t need more competition to achieve that.”

The commission made a number of recommendations to improve the provision of human services.

In end-of-life care, it recommended that state and territory governments increase the availability of community-based palliative care, so people wishing to die at home can access support to do so.

Aged and Community Services Australia supported this call to foster better end-of-life care for people in their homes, in their submission to the Productivity Commission inquiry.

“With their focus on curative treatment, acute hospitals are often not ideal places for providing appropriate end-of-life care that promotes comfort and quality of life,” the submission said.

“Ensuring adequate palliative care services are available in people’s own homes and residential aged care facilities will enable greater numbers of older Australians to have choice in the environment in which they die and the services they receive, while better allocating health resources including from the more expensive hospital system.”

In social housing, the commission called for the introduction of a single system of financial assistance for eligible tenants.

“The Australian government should extend Commonwealth Rent Assistance to tenants in public housing so that it is available to all eligible tenants in social housing properties,” the report said.

“State and territory governments should each design and fund a housing supplement for eligible tenants in areas with acute rental affordability problems [and] should abolish the current model of financial assistance in social housing.”

The commission also called for longer contract lengths for the provision of family and community services.

“Short-term contracts can also be detrimental to service users because service providers spend too much time seeking short-term funding, which is a costly distraction from delivering and improving services,” the report said.

“To address this, the commission is recommending that governments move to a seven-year default contract term.

“Seven-year default contracts would allow for time for setup (making the investments that are necessary to deliver effective services, including workforce capacity and building relationships in the community) and time for a smooth transition to a new provider at the end of the contract.”

On top of this, the commission recommended increasing the default contract length for human services in remote Indigenous communities to 10 years.

Goldie applauded this recommendation.

“Longer contracts provide greater certainty for organisations delivering services, and that certainty supports better service planning and the development of long-term, stable relationships with people using the services,” she said.

Community Council for Australia CEO David Crosbie told Pro Bono News that the Productivity Commission had released a “very important report”.

Perhaps most significantly, this report is focused very clearly on government reform. CCA is supportive of most of the recommendations,” Crosbie said.

“The real issue here is whether government is prepared to make the changes required to provide better services. What CCA would like to see is a genuine commitment from the government to follow through on this report.  

“The charities sector has been here before so we can only hope this will not become yet another government reform report gathering dust on the bookshelves of those currently managing the tendering and contracting of human services.

The federal government is currently preparing its response to the report.

Luke Michael  |  Journalist  |  @luke_michael96

Luke Michael is a journalist at Pro Bono News covering the social sector.

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