This is the Business Council’s submission to the first stage of the Productivity Commission’s inquiry into Reforms to Human Services.

While adopting principles of choice and competition in human services like health is the right, high-level approach, implementing this in the health system requires a methodical bottom-up approach, introducing the fundamental principles of market design.

Greater competition, contestability and user choice must be carefully conceived as the means rather than the ends that should be sought through proposals for reform of the health sector. The ends must be improving consumer outcomes.

This submission therefore outlines the Business Council’s 10 fundamental principles for market design of the health system as a guide to any reforms the Productivity Commission proposes:

1. Improved consumer outcomes must be the central objective.
2. Redesign must be fiscally sustainable.
3. Enhanced information and transparency are critical enablers of redesign.
4. All parties in the system must have clear accountabilities.
5. Pricing and regulatory incentives should improve consumer outcomes and efficiency.
6. Clinical innovation must be matched by service delivery innovation.
7. Care must be increasingly digitally enabled.
8. Supervision and regulation of health care should pay adequate attention to consumer rights and interests.
9. Redesign initiatives must be effectively integrated with the whole health system.
10. Redesign should embrace the respective importance of both the private and public sectors

Redesign of the health system in line with market-based principles is necessary if Australia is to provide better, safer and more convenient health care for consumers on a fiscally sustainable basis.

Download a copy of our submission here.