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NSW Expected to Ditch Area Health Services Under National Plan

by Paris Cowan •
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To comply with the National Health and Hospitals Network reform plan passed by COAG last month, NSW will be expected to dissolve its Area Health Services and replace them with a system of Local Health Networks, a spokesperson for Federal Health Minister Nicola Roxon has told the medium.

The size and boundaries of Local Health Networks are a matter for the states to decide, however NSW Health is unwilling confirm what the new hospital administration system will look like until concrete plans are decided upon.

At present, the NSW public health system is based around 8 Area Health Services, which are in charge of the day-to-day running of hospitals and health care facilities within a particular region, and receive budget allocations of up to $1.8 billion.

The National Health and Hospitals Network (NHHN), on the other hand, is made up of Local Hospital Networks (LHNs) which will be responsible for the operational management of public hospitals when the nation-wide plan comes into effect.

The LHN’s will also be responsible for hospital procurement (including ICT), on the terms outlined in an agreement between them and the states.

The similar roles played by these entities would suggest that the existing Area Health Services could simply become Local Health Networks, without major structural reforms.

However, there are several factors that have the potential to complicate a direct transfer of responsibilities from Area Health Services to LHNs:

  • The COAG agreement outlines that, “in metropolitan areas, LHNs will comprise at least one hospital but could comprise a small group of hospitals.”

By comparison, the largest of the Area Health Services, Sydney South West AHS, is made up of no less than 19 public hospitals and health facilities, which is by no means a small tally.

  • A total of 90 LHNs will be established nationally. By proportion of the national population, NSW would be expected to have more Networks than it currently has Area Health Services; and
  • By signing the agreement, NSW has committed to ensuring that there will be no net increase in the number of health bureaucrats as a proportion of overall staff, which could create problems if new bodies need to be formed.

The NHHN timetable requires that the size and boundaries of LHNs are resolved by each state by 31 December 2010.

For more information on NSW Health and the National Health and Hospitals Network, see the NSW Department of Health agency profile.

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  • NSW
  • Health
  • Area Health Services
  • COAG
  • Department of Health
  • eHealth
  • Local Health Networks
  • Minister for Health
  • Nicola Roxon