New report says Australia's health system in need of renovation

A new report from the National Health and Hospitals Reform Commission has found that Australia's health system is struggling to come to grips with communities' needs.

The government's health reform commission has suggested that the Commonwealth should extend its responsibilities in community healthcare, while the states continue to look after public hospitals.

The National Health and Hospitals Reform Commission is a new government body set up to establish a long-term health reform plan and this report is an interim report for Health Minister Nicola Roxon.

The report has come up with 44 new performance indicators for Commonwealth and state governments to adhere to and these are likely to be part of the next healthcare funding agreement between the Commonwealth and the states.

The report says governments that provide sub-standard healthcare and do not meet the benchmarks should face financial and political consequences.

Federal Health Minister Nicola Roxon says the benchmarks will be set high but are not aimed trying to achieve a "takeover of hospitals".

Roxon says working cooperatively will be the best outcome, but if some states say they will not be party to the reform then the federal government are prepared to take on the responsibility.

The commission report describes the current health system as a 'renovators' opportunity says the health minister and that decisions about hospital funding had in the past been political ones.

The commission's report has revealed that Australia's federal system of government makes it difficult for the public to understand which government, whether state, territory or federal, is responsible for which service.

It says better benchmarks were needed for both commonwealth and state-funded health services in order that governments could be held accountable for their decisions.

Whether the commonwealth will help the states financially with health is unclear but states and territories are in negotiations with the commonwealth about a new funding arrangements.

Ms Roxon says the government will invest very heavily in hospital services and are working hard on the systemic reform required by the commonwealth.