A review of the Department of Health and Aged Care has negatively assessed its policy-making capability, approach to consumer and stakeholder engagement, and relationships with ministers. It has also highlighted stakeholder criticism of its lack of understanding of the markets and systems it administers.
The Australia Public Service Commission undertook the capability review led by former health department secretary Andrew Podger PSM. It was one of the first undertaken following the relaunch of reviews last year and the first of the health department since 2014.
The review's fieldwork component was undertaken from February to May this year based on desktop research, interviews and workshops. More than 60 interviews were conducted with senior staff and external stakeholders, including ministers, private sector companies, state delivery organisations, peak bodies, clients and central agencies.
The review report praises the department's performance during the COVID-19 pandemic and its workplace culture.
"The department’s approach to flexible work, which has improved staff retention and satisfaction, has enabled greater representation of the Australian community and created a more accessible and inclusive work environment for people with diverse needs/caring responsibilities," it says.
However, it has delivered a mostly critical assessment.
According to the published review report, "We found there is room to improve, in particular the department needs to lift its evaluation capacity, culture and capability."
It rates the department's policy-making capability as 'developing', the third lowest of the four ratings, meaning it mostly exhibits weaknesses or gaps in its capability. It says that many of these gaps have not been identified or addressed and that the department may be unable to deliver in the future.
It says that "despite strong policy capabilities in particular areas, there is lack of capability in integrated policy development addressing the interactions between the various parts of the health and aged care systems. The department is not seen to have put forward systemic reform options to government or lead this discussion with the states, territories and other stakeholders."
The review says the decline in this capability could be partly attributed to previous ministers not requesting advice on system-level reform.
"However, the department should maintain system reform policy capabilities regardless of the needs of the minister of the day," it says.
It does not canvas why previous ministers did not request advice but does highlight concerns raised by the portfolio's current ministers.
"The review team heard the department has been somewhat slow to respond to the new government’s priorities. Ministers want the department to provide more forward-looking policy options and strategic advice."
The review held discussions with the portfolio's five ministers. It says they want a greater focus on the timeliness, quality and brevity of briefings. They also want enhanced leadership in developing integrated policy, more effective use of data, a greater focus on the outcomes of policy and program decisions for consumers, in-house capability, and regular updates on key priorities.
In short, according to the review, "Ministers want the department to provide more forward-looking policy options and strategic advice."
"As outlined earlier in Integrated strategic policy development capabilities, the review team found the department needs to lift its strategic policy capabilities," says the review, and adds that the department acknowledges this shortcoming.
"The department’s self-assessment notes the need for cultural change to support more integrated strategic policy development," says the report.
"To lift this capability, the department needs to integrate policy-making capability across the organisation and with other government agencies. It also needs to better use data (including that held in related agencies), system modelling, economic analysis and evaluation, and build its understanding of the needs and expectations of Australian people, businesses and community.
"The review team heard the department has good policy capabilities within divisions/silos but can struggle to develop policy across work groups."
The review identifies a lack of an evaluation culture.
"There are pockets of good evaluation in the department, for example the review team heard the TGA is good at technical evaluations, but this is not widespread," it says.
"Evaluation capability has largely existed in one team in the department, providing high-level guidance if needed but mostly leaving evaluation to policy and program areas. In recent years, a lot of evaluation has been outsourced, not included in policy/program design, or done after the event to meet evaluation requirements. The department acknowledges this capability has eroded in recent years, and it will take time and resources to build it up."
The review also says stakeholders believe the department does not understand the systems and markets it administers.
"For the department to best serve the Australian public, decision-makers and those working in policy development must have a sound understanding of how the markets the department funds and regulates operate.
"There is a sense that the department strives to be diligent in this area, yet there is a perception among stakeholders that the department needs to further invest in staff to improve its understanding of markets and the business drivers of health and care providers," it says.
"There is a sense that the department strives to be diligent in this area, yet there is a perception among stakeholders that the department needs to further invest in staff to improve its understanding of markets and the business drivers of health and care providers."
It says, "Examples of excellence exist across the department’s program delivery and regulatory activity in the community and private sectors. However, there is ‘patchiness’ in performance, engagement and attitudes towards non-public sector actors."
The review's critique extends to the department's approach to consumers.
"In some respects, the health and aged care consumer is missing from the department’s considerations," it says.
"The department’s understanding of consumers often comes from health and care financing systems bolstered by data from the Australian Institute of Health and Welfare and the Australian Bureau of Statistics...While consumers are often involved in departmental consultation forums, it is not clear that their views carry the same weight as the views of health and care providers."