Public hospitals, social housing and palliative care services are ripe for privatisation, outsourcing and other reforms to inject greater competition into what have been public sector monopolies, the Productivity Commission has found.
But the influential commission also warned against excessive attempts to harness the free market, citing the disastrous experience of opening up government loans to private vocational education providers.
Of 26 services it assessed, the commission identified only five as being best-suited to more competition: end-of-life care, human services in remote Indigenous communities, public dental services, public hospitals and social housing.
Others, such as disability services, jails, residential aged care and schools, could potentially benefit from reform but should be left alone for the time being, it urged.
In April, Treasurer Scott Morrison asked the Productivity Commission to investigate the possibility of greater competition in human services, citing the challenges of an ageing population, new technology and growing costs.
The report said social housing, where government entities managed four out of five properties, was besieged by long waiting lists and a high rate of property under-utilisation, while 20 per cent of housing languished in an "unacceptable" condition.
"There are a large number of housing providers – both not-for-profit and for-profit – that could perform this service [instead]," the report concluded.
Public hospital patients would benefit from better information that would allow them to choose the best-performing hospital or clinic upon referral from a GP, as was the case under Britain's National Health Service.
"Public patients are often given little or no choice over who treats them and where," the report found. It also recommended more transparent means for sacking senior management at poorly performing hospitals.
The commission also endorsed greater competition in the end-of-life care sector but warned "special measures for consumer protection" were warranted given users' vulnerability and inability to exercise informed choice.
But the report was wary about giving carte blanche to competitive tendering. The commission warned "strong government stewardship" was required to ensure consumers' needs were equitably met, and that this role was "broader than overseeing the market".
While it sang the praises of innovation in eHealth, especially for regional areas, the commission pointed the finger at the Gillard government's liberalisation of VET FEE-HELP as a cautionary tale of what could happen without adequate safeguards.
"While consumer choice was expanded, the Australian government did not fully anticipate the stewardship issues that would emerge," it said. "No requirements were put in place for providers to demonstrate that they were delivering high-quality education."
Furthermore, the commission noted that, while freedom of choice was ideal for most customers, "not everyone can, is willing to, or should exercise choice", particularly children and the elderly.
The report, released on Monday, will cause a stir in the human services sector, particularly those wary of the competitive tendering process recently used in NSW to reform homelessness services and women's refuges.
The commission will now begin work on recommendations for each of the sectors it picked as candidates for reform, and is due to report back to the Treasurer by October.
93 comments
Comment are now closed