Bills

Health Care (Governance) Amendment Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

Mr PICTON (Kaurna) (16:07): With those brief remarks on this legislation, I conclude my contribution. I look forward to further discussion on this legislation in the committee stage. I am hoping to see some amendments passed that will improve the governance arrangements and improve what is so far not sufficient legislation for the important health governance of our state.

The Hon. A. PICCOLO (Light) (16:07): I would like to make a small contribution to this debate. It deals with the governance arrangements for our health services right across the state. I will limit my contribution to the governance of health services in my region. I will also express some of the concerns that have been passed on to me by not only doctors and other clinicians but also the general community.

One of the things this government promised under its new governance arrangements for health services across the state was improved engagement, responding to community needs, etc. From where I stand, I certainly believe that, based on the feedback from the community and other people, those arrangements have not worked that well. In other words, they have not delivered better engagement. Certainly, I speak to a number of doctors who believe they were not engaged in proposed changes to health policy in the Gawler area.

GP Inc. is a major service provider in partnership with the government for emergency and after-hours services to the town and provides an invaluable and important service. We have a health service that sees more people in its emergency department than the one in Mount Barker, yet it is funded less. So, when you add up all the concerns expressed by various people who make up the health system, I am at a loss to understand why this government believes that the new governance arrangements have delivered, first, better engagement processes and, secondly, better service outcomes. I will come to the outcomes of the health services in a second, because that is a different story, but I think it is also worth telling.

A common complaint I receive from some members of the local health advisory committee and people who sit on the GP Inc., from doctors in my community who provide an important service not only in the private sector but also to the public sector through the health service, is that they first hear about any proposed changes to health policy or health practices in the region when a report is finalised. They are not actually engaged in the process of the preparation of a report and they are not engaged in the process of gathering information or data.

They are not engaged in the process of actually diagnosing what the problem is that the health bureaucrats are trying to resolve. However, they are often certainly left holding the baby, to use that terminology, in the sense that often those decisions are made and they have to implement them. I really do feel sorry for our local GPs and the local nurses who work in the health services who, as a result of a range of government policy decisions, often bear the brunt of criticism from the community for matters that are beyond their control.

An issue that I have raised previously in this chamber, which I think is worth mentioning again because I have received more complaints, is about the food service in our local health service. There was a celebrated case—and I say 'celebrated' because it was an appalling dereliction of duty to patient care in the Gawler Health Service, and that has been covered by the media. In fact, I received a letter from the minister apologising for that incident. That is how bad it was: the minister was forced to apologise for that incident.

I have heard of other cases on a regular basis from people who have been admitted to the hospital for a whole range of reasons. For example, if they have allergies, they are given the wrong foods; if they ask for the right foods, they do not have it. There is a whole range of things that have gone wrong. As I said, this is not a reflection on the nurses and other staff in our health services; it is because the government is hell-bent on privatising a whole range of services, which means they lose control of the delivery of those services as well as the funding for those services.

As the shadow minister made quite clear in his contribution to the debate today and yesterday, this government is very good at saying, 'We've got more money here,' but actually what they are doing is taking it from somewhere else in the health budget and in fact the health budget overall is suffering.

In terms of the promised expansion of the emergency department in the Gawler Health Service, a huge announcement was made last year when there was some doubt about the boundaries of the electorates of both Schubert and Light. Certainly, the government decided that it might have to do something about some outstanding issues in terms of the health service, so an announcement was made. It was only announced in the last couple of weeks that architects have been engaged, which is six or seven months after the event, to look at some designs for the emergency department.

When I requested details of what was proposed and we went for a tour of the existing emergency department—do not get me wrong; I welcome the investment into the emergency department, whenever it does occur, because the town certainly needs it and I had firsthand experience of that recently—the health bureaucrats had no idea of what was being proposed. They had no idea of whether it is just an expansion of the existing ED or a relocation of the ED to another location. That really begs the question: where did the budgeted amount come from? If you have no idea of what is being proposed, how do you get costings on a proposal that does not exist?

I assume that something was quickly cobbled together to make an announcement to save the government's bacon in the proposed new electorate of Schubert. When that did not happen, what did happen is that they have gone slow on this project. It is no longer a priority for the government, which is also the case with the Barossa hospital.

If the progress made in that hospital was any slower it would be going backwards, despite the people of the Barossa being promised a full business case some time ago. It was actually announced that a business case had been completed last year, only for them to be told by Infrastructure SA that it was a preliminary business case. In other words, it is the business case before you have a business case.

What the people of the Barossa have been told for the last couple of years has not happened and a business case has to actually be finalised before any funding can follow, but I am sure that will work out over the coming months. Again, the boundaries have changed and Schubert now has a margin of 16 per cent, so it will be interesting to see what the government does there.

Another issue that is uppermost on the minds of people in my community is the Ambulance Service. I receive regular complaints, not about the service itself, not the service people get, but certainly the delay in receiving services. I had a school complain to me about a child who had hurt themselves at school waiting many hours for an ambulance.

I had a case where a person was hit by a car in the main street on a 38° or 40° day. They had to wait on the pavement for over an hour before an ambulance arrived. I had another case just last week where a person on the street stopped me and said that her husband had had a heart attack and that they had to wait an enormous amount of time. They were quite distressed by the amount of time they had to wait for an ambulance.

This is not a reflection on the ambos themselves; they do a great job when they arrive, and they can only arrive when they have time and the ability to arrive. The issue is twofold; one is the absence of a second unit in Gawler. We have only one unit, so if that unit is out ramped at the Lyell McEwin Hospital—and ramping is the second issue—then we are not covered. If the ambulance has taken somebody to the Royal Adelaide for some reason, we are not covered. There are a whole range of things.

There are a lot of other issues, like transfers being delayed because the ambulance unit is not available. So people's health care, in many cases, can be compromised. Certainly, when ambulances take hours to arrive because they are somewhere else and we only have one service, people's wellbeing can be compromised to the point where it is a life and death matter.

Gawler is a growing area. The Barossa is a growing area. The northern metropolitan suburbs are a growing area. The government and particularly the Treasurer last week, I think, hailed their agreement with the Ambulance Employees Association, but I understand that that interim agreement is yet to be ratified by the association. The Ambulance Employees Association had backed down and a compromise was found. My understanding is that that decision will lead to no improvement in ambulance services in Gawler. There is just not sufficient staffing.

Certainly, there is no funding for a second unit in Gawler and therefore the fundamental issue is not going to be addressed. My understanding is that there is an additional 79 staff, I think was the figure mentioned, but certainly not be enough staff will come out to Gawler in terms of meeting the requirements of the people in Gawler and the Barossa. People in the Barossa are in a worse position than the people of Gawler, but the people in Gawler are quite rightly concerned about their wellbeing because sadly they cannot rely on an ambulance arriving on time to meet their clinical needs.

If this government's governance arrangements are to mean anything, they have to be translated into good public practice on the ground. In other words, we need to have a health system that is responsive to the needs of the people in the area and a health system that engages the community, the clinicians, the nurses, the doctors (both in private practice and public practice), and the health advisory committees, etc. We need a health system that engages them in the process of any changes and reform improvements.

At the moment, from what I am picking up from the community and other parties in the health system, that is not happening. So these governance arrangements, as I said, mean nothing unless they deliver a better health service to the people of Gawler and the Barossa. With those comments, that is the contribution I wish to make.

Mr SZAKACS (Cheltenham) (16:19): I also rise to make a brief contribution on the Health Care (Governance) Amendment Bill. As my colleague the member for Light has similarly done, I will be touching a little bit on what these proposals may mean for local health care in my local electorate and, more broadly, in the western suburbs of Adelaide.

The Queen Elizabeth Hospital is a pillar of the west, not just in the electorate of Cheltenham but in servicing those communities across the west through the electorates of the member for Port Adelaide, the member for Lee, the member for Croydon and the member for Colton. The QEH, for many years right back for many decades, including the decades before I was born there in the 1980s, has been set up as a key tertiary hospital for the west.

It was originally set up as a maternity unit to assist the west's growing population post World War II. Over many years and decades, it has continued to grow and evolve into an extraordinary centre of excellence. Attached to it are the extraordinary research that the Basil Hetzel Institute undertakes in their translational research and the extraordinary healthcare professionals who operate between the two.

It is also important that I, and others in this place, recognise the extraordinary work that people and workers in our healthcare system undertake, often without great plaudits and certainly not often at the front of people's minds. They are the people who keep our hospitals running: the cleaners, the orderlies, the personal care attendants, those people who cook meals, those people who clean those rooms.

The COVID pandemic has absolutely highlighted to us all—not that we needed it—just how critical those additional services are in our hospitals. I take this opportunity to once again thank those extraordinary workers for what they have done during the pandemic. Of course, it is unfortunate that this government, as we speak, is refusing to play ball with those workers. Those workers are currently trying to negotiate basic things, simple things, like job security. They are trying to negotiate with this government, on behalf of and for the entire public, things like stopping and galvanising against further privatisations in our healthcare system. I stand here very clearly and very proudly on the side of those workers as they continue their fight onwards and upwards.

I also want to touch on, similarly to the member for Light, the key importance of anything we consider in this place and what it means for on-the-ground outcomes. Along with my Labor colleagues and opposition colleagues in the western suburbs, I have been eagerly awaiting the work to begin on the upgrade to The QEH—articulated, funded and planned by Labor in 2017. We are still waiting—at last count for 2½ years now. We have been waiting for an upgrade which was always important and continues to be important for the western suburbs. It continues to be important for the delivery of health care in our west.

You would have thought that, at the time of a pandemic and in a time when shovel-ready projects are critical, starting to build that much-needed upgrade in our west and to get those trades and jobs happening in the western suburbs, supporting local businesses around the hospital, would have been a priority for this government. Unfortunately, like so many other things in our western suburbs, it is on the backburner. It has been put to the side as an afterthought. The western suburbs are sick of that. But, let's be honest, the Liberals' relationship with the western suburbs has not just been damaged by their completely appalling treatment of the upgrade of The QEH; it has been years and decades in the making.

There are a couple of things with respect to my contribution on this that I want to touch on—a very important one to me and my community, and I know to the member for Kaurna, the shadow opposition health spokesperson—and that is the change of scope to The QEH upgrade and the years that it took for that to become public. I know it took years because we have interrogated this through the Public Works Committee. The member for West Torrens and myself interrogated this through the Public Works Committee, and we found out that the conversations about the change of scope, the work to downgrade, to pull back, started back in late 2018.

It was not too long ago that we were hearing from the government that the scope was good—nothing to see here. The delays were a natural course of their planning for this project, and then we find with the drop of a press release that the outpatient upgrade was gone, the outpatient upgrade was off the table. At the same time we also saw, again with a drop of a press release, that the delivery of cardiac services, the cath labs—a huge part of the Minister for Health's and this government's pitch—was halved.

We know it was halved because the new plans showed one cath lab, but we also found out that in this period of the last couple of years of government the cath labs have been utilised only to an average of about 64 per cent, 65 per cent—a lot of spin, a lot of hot air from the Minister for Health—and then, with the drop of a press release, those cath labs are halved.

What I do want to touch on in more detail is the scrapping, the cutting, of the upgrade to the outpatient facility at The QEH. I would never accuse the government of doing this, but if they came down to The QEH, if they came down past Mile End and visited the western suburbs—we might do a passport check on a few of them on the way through, but we would invite them down—and set foot in The QEH outpatient facility it would become clear and apparent immediately about the bottleneck that has been caused because of a very old and outdated facility.

You need only talk to doctors, nurses and specialists who continue to do what they can in this facility. They tell us, they tell me, they tell patients, that they can do no more because that facility is old, it is not fit for purpose, and the only way we can utilise the true potential of a QEH upgrade, which sees an upgrade to new operating facilities, is to actually improve the way that we get people through the outpatient department, seeing specialists and referred off to surgery. That is what we need.

We have also seen a peculiar and odd situation where the oldest, most tired and the most noncompliant facility across any SA Health asset, The QEH tower block, remains. It is so old, it is so tired and it is so noncompliant that it is going to sit there in large parts empty—37,000 square metres of space that in time will be decommissioned but sat there. Why? Because the outpatient facility is going to stay there.

When it comes to healthcare governance arrangements, the true limit test is about what a government is willing to do on the ground to listen to patients, listen to the community and deliver on their key promises. When it comes to The QEH, when it comes to the western suburbs, no amount of legislative reform is going to save any face for this government that have abandoned the west and abandoned The QEH.

The Hon. J.A.W. GARDNER (Morialta—Minister for Education) (16:29): I thank members for their contributions and their enthusiastic support for the bill. I commend it to the house and I look forward to the committee stage.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

Mr PICTON: I ask the minister: what consultation has there been in relation to this legislation with the Independent Commissioner Against Corruption? I draw attention to the fact that, as I mentioned in my previous remarks, this piece of legislation has been going for two years since it was first introduced. Almost a year ago, I made contact with the commissioner, concerned as to whether or not there had been consultation with the commissioner—this is the previous commissioner—and received a reply on 23 July 2020. It reads:

Dear Mr Picton,

Re: Health Care (Governance) Amendment Bill 2020

Thank you for your invitation to comment upon the Health Care (Governance) Amendment Bill 2020, which is currently before the Parliament for consideration.

As you will be aware governance in SA Health and the various local health networks is something with which I have long been concerned, as evidenced by my releasing the recent report 'Troubling ambiguity: governance in SA Health'.

I am not ordinarily in a position to advise or comment on Bills before Parliament. I usually restrict myself to advising or commenting on legislation as a direct bearing upon my statutory position, such as the Independent Commissioner Against Corruption Act 2012, the Police Complaints and Discipline Act 2016, and the Public Interest Disclosure Act 2018. I cannot take a political position on any legislation.

I have occasionally commented on legislation unrelated to my functions, when one of my corruption investigations has uncovered some legislative flaw or weakness that enabled or encouraged some suspected instances of improper conduct.

Other than these I am restricted by section 7(3) of the ICAC Act, which states: 'The Attorney-General may request the Commissioner to review a legislative scheme related to the public administration and to make recommendations to the Attorney-General for the amendment or repeal of the scheme.'

It is sometimes difficult to comment on any hypothetical risk of corruption, misconduct or maladministration that a piece of proposed legislation may engender. I do not wish to prognosticate on how legislation may encourage certain forms of conduct, especially when departmental policies, practices and procedures may impact on or control those same possibilities.

I am also mindful of not unduly encroaching on the supremacy of parliament as the appropriate place to discuss and decide upon policy or legislation.

However, relaxing the eligibility criteria for membership to a local health network Governing Goard will tend to heighten the risk of actual, perceived and potential conflicts of interest emerging for those Board Members who may provide services to a relevant local health network.

An actual, perceived or potential conflict of interest is not in itself wrong or unethical. Many public officers will encounter circumstances where their personal interests will or might conflict with their public duties. The key is to identify, declare and manage the actual, perceived or potential conflict.

This Bill could heighten the possibility that a Governing Board member will have a conflict of interest. Whether the number and types of conflicts that emerge for a particular board member makes their position on that board unmanageable, or indeed untenable, is impossible to determine in advance of any individual appointment.

My overriding concern about governance at SA Health was encapsulated in the title of my recent report on that agency, the troubling ambiguity that exists in the regime of practices, policies and procedures in that agency. That is why I requested funding to undertake an evaluation of those practices, policies and procedures in SA Health. As you know the Government determined to take a different path for reform of public health services, which is their prerogative.

I understand that the Governing Boards are all subject to the Charter for Local Health Network Governing Boards: Volume One, which outlines board members responsibilities regarding members acting in the public interest, registering their pecuniary and personal interests, and their obligations to declare conflicts of interest and abstain from proceedings. I am unsure of the effectiveness or otherwise of this Charter and it is probably too early to know. But in light of the existence of this control measure, I regard it as a question for the Parliament if the Parliament wishes to retain or remove eligibility criteria that would further reduce the risk of the occurrence of conflicts of interest.

The other Australian jurisdictions have decided to enshrine conflict of interest provisions for their health boards within the principal health care Acts, rather than use policy or ministerial directives as has been done here. Those jurisdictions do not have a criterion for eligibility for membership to health boards that would prevent someone who provides services to a health service from being appointed.

Once again, the precise legislative and policy framework for the management of local health Governing Boards is a question for Parliament.

Your letter also voices concerns with the Bill's proposed dissolution of the Health Performance Council. I have not had occasion to appreciate or assess the functions of the Health Performance Council with regard to corruption, misconduct and maladministration risks, with which I am concerned. While the Health Performance Council is an SA Health oversight body, its functions do not appear particularly aligned to my jurisdiction, and in those circumstances it would not be appropriate for me to comment on its proposed dissolution. I regard it as a question of institutional design and government policy which is a subject for the Parliament to decide.

Yours sincerely,

The Hon. Bruce Lander QC

Independent Commissioner Against Corruption

Clearly, there was a concern from the previous Independent Commissioner against Corruption on a particular section of this bill that would potentially dilute the conflict of interest regime. There has been a report that the commissioner wrote in relation to the governance of SA Health, and I believe there is now also, still underway, a process of responding to that report.

Since this letter and those concerns, particularly now that we have a new commissioner against corruption, has the government sought advice from the Independent Commissioner Against Corruption in relation to the provisions of this bill, particularly those related to conflict of interest? What has been the outcome of those consultations? If there has not been any consultation, why wouldn't we, given that the commissioner has clearly raised concerns both in the report and in this letter?

The Hon. J.A.W. GARDNER: I counted three questions and a rather extensive set of context. I am happy to answer the three questions in two brief sentences, or I could provide some further context as well in addition to providing the direct answer. If the member is comfortable for me to provide a little bit of background, then I will proceed.

Our LHN governing boards are improving the efficiency with which our LHNs deliver high-quality care to our community, establishing improved governance, leadership, financial controls and management protocols. The centralisation of the governance of health services over the last decade has significantly impaired effective control, undermined compliance and increased the risk of corruption, maladministration and misconduct.

The health system is too large for one person sitting in a CBD building to provide local oversight and scrutiny of operational governance and control systems across 12 separate entities, they being 10 LHNs, the department and the SA Ambulance Service. That is why having governing boards with a local level of accountability for overall governance and strategic oversight of their LHN has allowed local focus and intimate scrutiny of important governance processes and controls.

The devolution has transferred governance to the boards and management to the frontline so that local decisions can be made locally rather than attempting to observe and control finances and administration from an office building in the CBD. Each board consists of members with expertise beyond the health system who provide independent oversight of the LHN, and the boards are supported by audit and risk committees that have a strong focus on culture and compliance.

Governance reform is leading to a reform of policy development and enforcement. Before devolution, the department applied generalised policies on LHNs, which often failed to take into account specific local issues and which presented challenges in consistency of implementation and application, given the size and diversity of the health system. Under the governance reforms, and working with LHN boards, the department is repositioning the policy framework to allow the boards and local management teams to develop procedures that both reflect consistency with the policy framework while allowing flexibility to adapt to the local environment and context.

The recommendations of the ICAC report into SA Health are even more reasons why we implore the opposition to pass this bill, which will increase transparency in roles, responsibilities and accountabilities for the governance and management of our public health system.

The member has asked specifically in relation to consultation with the ICAC commissioner. I am advised that since the briefing the member for Kaurna had in relation to this matter, at which he also expressed his view that the consultation should have taken place, the Minister for Health and Wellbeing has since engaged with the current ICAC commissioner, the Hon. Ann Vanstone QC, who has advised that she would prefer not to express a view on the proposed legislation outside her functions under the Independent Commissioner Against Corruption Act 2012.

In addition to that, I am advised that in late 2019 the minister referred the board eligibility clauses of the bill to the Cross-Agency Implementation Taskforce established to oversee implementation of the state government's response to the ICAC's report into SA Health for consideration. with no issues raised by the task force at that time. I am pleased that the member quoted fully from former Commissioner Lander's letter. I understand that was not necessarily the case when this was raised in the Legislative Council, and there was some selective quoting. As the member read—

Mr Picton: I read the whole thing.

The Hon. J.A.W. GARDNER: Yes, I just congratulated you on that. Your colleague in another place did not. The former ICAC commissioner in doing so, as the member himself read out, noted that an actual perceived or potential conflict of interest is not in itself wrong or unethical, and the key is to identify, declare or manage the actual, perceived or potential conflict. I think the particular concern raised by the former commissioner on which the weight of the concern by the member for Kaurna fell was in relation to the suggestion that South Australia has not enshrined conflict of interest provisions for the governing of boards within our health legislation as other jurisdictions have done.

The fact is that, through the provisions of the Health Care Act 2008 that commenced on 1 July 2019, our LHN governing boards have the most extensive disclosure and conflict of interest requirements in the state, far exceeding those requirements for other South Australian government boards, including the SA Water board, the Essential Services Commission and the Super SA Board, as I am advised. It was this parliament that saw those provisions come into place.

Under the existing provisions of the act where there may be a conflict of interest, board members are required to disclose these at a board meeting in accordance with the requirements under the act. The former ICAC commissioner's letter notes that South Australia is currently an outlier nationally and that no other state or territory prevents from membership of their health boards persons who provide a service to the local health network.

Mr PICTON: The minister made reference to the cross-agency interdepartmental task force or whatever it is called on addressing the ICAC report that the Premier established after it came out. There has been very little news on the progress of that task force since it was put in place. I believe there was an interim report that came out a few months after it was established. Can the minister outline what progress has happened on that task force and what tangible things have been delivered to address the very significant concerns that were raised in the ICAC commissioner's troubling ambiguity report?

The Hon. J.A.W. GARDNER: I thank the member. For the member's assistance, we are talking about the Cross-Agency Implementation Taskforce, which was, as I said in the last answer, established to oversee the implementation of the state government's response to the ICAC's report into SA Health. That was established to independently and critically review the adequacy of SA Health's implementation following the release of the commissioner's report in late January 2020. Sorry, that was in relation to SA Health developing the program implementation plan to target and address those issues raised, and the task force is reviewing the adequacy of that implementation.

Since that time, I am advised that significant work has been undertaken and implemented by SA Health in direct response to the report, notwithstanding the challenges posed by the coronavirus outbreak in March last year, when particularly the rubber hit the road. In the areas of industrial reform, cultural reform and practice reform, work has included implementation of a contemporary policy governance framework for SA Health; revision of a broad range of SA Health policies, including those related to information classification; records management; procurement frameworks and research governance amongst others; improvements in conflict of interest declaration management; release of SA Health's cultural revolution pathway, Mentally Healthy Workplaces framework; and various associated policies, such as a policy on the prevention and management of workplace bullying and harassment.

The program of work has enabled the delivery of a number of outcomes, with recognition that the work is part of a long-term strategy to continuously improve accountability and integrity across the SA Health portfolio. The bill further strengthens the government's response to the report by placing obligations on the LHN governing boards and SA Ambulance Service to stamp out bullying within our health services, promoting a healthy workforce culture and promoting the health and wellbeing of SA Health staff by requiring the chief executive of the department to maintain policies around workplace bullying and harassment and ensuring that there is no doubt as to accountability, roles and responsibilities of the respective parties in the public health system.

Mr PICTON: Has that interagency task force, or whatever its name is, been invited to consider this bill and amendments to the bill? Have they given any input to the government in relation to this and, if so, what was that input?

The Hon. J.A.W. GARDNER: The body that the member is referring to, to refresh the member's memory, is the Cross-Agency Implementation Taskforce, which was established to oversee the implementation—

Mr Picton interjecting:

The Hon. J.A.W. GARDNER: Yes, and I am sure that we will have it correctly by the end. As I was saying, the Cross-Agency Implementation Taskforce was established to oversee the implementation of the state government's response to the ICAC's report into SA Health—that was its purpose, its function and its body of work. If there is anything further that is relevant that I can add to that, I will bring it back to the house, but for the moment that is the body of work that was described in its establishment.

Clause passed.

Clause 2.

Mr PICTON: Presuming that this legislation were to pass today, when would it be the government's intention that this be enacted?

The Hon. J.A.W. GARDNER: I imagine that will be as soon as is practical and possible.

The CHAIR: Excellent answer. It invites no further questions.

The Hon. J.A.W. GARDNER: I should say, I do not want to presume that we will finish this afternoon, but I very much hope that we finish this afternoon.

Clause passed.

Clauses 3 and 4 passed.

Clause 5.

Mr PICTON: I move:

Amendment No 1 [Picton–1]—

Page 3, after line 20 [clause 5(1)]—After paragraph (e) insert:

(ea) to establish and maintain a body that independently represents the interests of consumers and patients;

As I mentioned in my second reading contribution, one of the very short-sighted cuts that this government has made is that in their first budget they made a cut to withdraw all funding from the Health Consumers Alliance, a body that was set up to independently advocate on behalf of health consumers and health patients in this state. That body has now ceased to exist in South Australia, and we are now the only state in the country not to have an independent body representing patients and consumers in the healthcare system.

There was a coalition put together of different health stakeholders, led by the South Australian Council of Social Service. That coalition of groups put together some recommendations for the parliament in terms of what they believed needed to be put in place to ensure that this bill, in particular, would deliver improvements for health care in South Australia. A key recommendation of that was to make sure that there be a voice for consumers as part of this.

I should note that this was a group that included Health Consumers Alliance, which existed back when this was put together, Aboriginal Health Council, Lived Experience Leadership and Advocacy Network, Australian Association of Social Workers, Occupational Therapy Australia, SA Network of Drug and Alcohol Services, Australian Health Promotion Association SA, Public Health Association of SA and the Mental Health Coalition, led by the South Australian Council of Social Service.

In mid last year, they recommended that parliament amend the act to give consumers and those with lived experience an independent voice. This could be done by inserting in the bill that the chief executive shall ensure that a percentage, to be set by regulation, of the funding amount allocated to local hospital networks through their service agreements is directed to an independent, non-government health consumer organisation for individual and systemic representation and advocacy, and to enable evidence-informed consumer and community engagement in healthcare services, policy, planning and services.

Obviously, with the potential for drafting such amendments and the need to avoid becoming a money bill, etc., we could not achieve the full intent of what the coalition recommended within the frame of the bill. However, I have introduced this amendment along those lines, which seeks to establish a fund with which the board is established. I believe this is followed through in amendment No. 6, so this is connected to amendment No. 6.

This amendment requires the government to maintain a body that independently represents the interests of consumers and patients. It was born from the government's $1.5 million cut to the Health Consumers Alliance in its first budget, a move that ultimately lead to the alliance being completely disbanded and closing just in the past few months. The government's decision to cut the alliance's funding makes South Australia the only state not to have an independent consumer body for the rights and interests of patients. South Australia desperately needs such a body to independently represent the interests of patients and consumers in our healthcare system. We seek to get the support of the committee to ensure that we can have such funding and such a body in place.

The minister in the other place suggested independent consumer consultation is required in various pieces of legislation, thus rendering such an independent body null and void. However, I would argue that those comments completely miss the point. Having LHNs and saying that part of your job is consulting with consumers is entirely different to having a body which represents consumers, independent of government, to be able to speak on their behalf and to train consumers to be advocates. This is a missing key element in the healthcare system at the moment that this would seek to address.

By making it the job of the chief executive to establish and maintain a body that independently represents the interests of consumers and patients, we would make sure that the government is addressing this wrong. I do not think the government should be afraid of having in place such a body. It might cop criticism from time to time. Certainly, that is what happened with the Health Consumers Alliance.

Governments cop criticism, but tough governments should be able to manage that. We want to hear from consumers and we do not want to cherrypick information and have a system of consumer engagement that is totally dependent and under the wing of local hospital networks, as this government is proposing to do. Independence is the key here; therefore, I am happy to move this amendment.

The Hon. J.A.W. GARDNER: I thank the member for putting forward this suggestion. The government does not support establishing a separate body. We believe it would result in unnecessary duplication and confusion, given the existing statutory mechanisms to ensure consumer engagement within the Health Care Act. The fundamental principle of devolution of the public health system is to bring clinicians and consumers closer to the decision-making process in their local health services to create a truly integrated approach to community engagement to support patients, carers, families, consumers and clinicians at the local level to inform service delivery.

We do not believe it is appropriate, under a devolved governance structure, for the department to lead consumer engagement processes relating to local health service delivery, as the department is no longer directly accountable for these services or for determining how they will be delivered. Through their existing statutory functions, which commenced on 1 July 2019, the local health network governing boards are responsible for establishing strong relationships with health consumers, local communities and frontline health professionals, particularly through the development of a clinical engagement strategy and a consumer and community engagement strategy.

Mr PICTON: I will just add that that is completely wishy-washy. To say, 'We will just ask the local hospital networks to do some consumer engagement,' completely misses the point. This is about having an independent voice for consumers that is not just some committee of a local hospital network that people may or may not listen to. This is about an independent voice that is established for the whole state.

There is also a key element that this minister and the minister in the other place miss as well, which is that there are systemic issues across the whole state. If your entire approach to consumer engagement is, 'We're going to have some committees at a local hospital network,' that misses the connection of many of these issues across the whole state. Ramping is an issue across the whole state. Elective surgery is an issue across the whole state. Mental health care is an issue across the whole state.

If you are segmenting this down to local hospital networks, you are diluting the issue, you are diluting the ability of consumers to have a voice, it is not an independent process and it also does not bring those issues to where the key decisions are being made. As we have pointed out through the course of this debate, all the key critical decisions are still being made centrally by the minister, by the Treasurer, by the Premier and by the department.

Local hospital networks get told what to do, particularly after the passage of this legislation where service level agreements will be able to be superseded by the will of the minister. Not to have a central voice for consumers at a state level really denigrates the voice of consumers, but perhaps that is what this government is seeking to do.

The Hon. J.A.W. GARDNER: I note the member's comments and I note his insult to my contribution, so I will provide some further material. I will not respond to the insult with further insult, other than to say that I disagree with the member.

I talked before about the strategies and functions that are required to be delivered in LHNs. The minimum requirements for these strategies are outlined in the Health Care Regulations. Amongst other elements, the regulations require that strategies have regard to national and state standards and policies relating to consultation with clinicians and health consumers, and to describe the relationships between the two engagement strategies and the LHN's engagement with providers of health services, including providers of primary care.

The LHN governing boards have either completed or are well on their way to completing these strategies. All LHNs and the SA Ambulance Service have a range of consumer adviser committees, each providing vital consumer input into service planning, designing care, and measuring and evaluating healthcare services. Consumers are also engaged and partnered with at all levels of service delivery within LHNs and the state Ambulance Service.

Data on the National Safety and Quality Health Service Standards accreditation outcomes for public, private and day surgery services across Australia show that, of 17 South Australian public hospitals surveyed between January 2019 and February 2020, none received 'not met' actions at initial assessment, compared with 88 per cent in other states and territories. That indicates that we believe our public hospitals surveyed during the period satisfactorily met the actions in accreditation standard 2, partnering with consumers.

This bill includes an additional function of the chief executive to engage with consumer, carer, community representatives and other interested parties in the development of healthcare policy, planning and service delivery. This clause passed the Legislative Council in December 2020. The Commission on Excellence and Innovation in Health's Consumer and Clinical Partnerships directorate is focused on developing systems and capability to build and sustain partnerships between clinicians and with communities, consumers and carers. It aims to support health services to deliver safer, more innovative and efficient health care through empowering consumers and clinicians, and there is a range of things that they have done.

The newly established Wellbeing SA and reformed SA Mental Health Commission also play important roles in the engagement of consumers, including those with lived experienced, and clinicians to drive statewide strategies, policies, programs and models of care, and demonstrate transparency and accountability to the public. As a system leader, the department is responsible for setting statewide strategic policy for the public health system, which has included setting the high-level policy frameworks for consumer, carer and community engagement, and partnerships across SA Health. We still believe that the amendment is unnecessary. We remain unconvinced that it does other than duplicate other work.

The committee divided on the amendment:

Ayes 20

Noes 24

Majority 4

Amendment thus negatived.

The CHAIR: We will now deal with clause 5 as printed. Any questions on clause 5, member for Kaurna?

Mr PICTON: There are. Perhaps first I might give the opportunity to the minister to outline exactly what the key changes are here for the role of the chief executive. Presuming this bill passes and gets royal assent and comes into operation tomorrow, how would the chief executive's role be different tomorrow from what he is currently doing in the healthcare system today?

The Hon. J.A.W. GARDNER: I thank the member for the question. I admire his optimism that we can go from passing the bill this afternoon to royal assent tomorrow. I will give it a crack but it might take a little bit longer. Prior to 1 July 2019, under the Health Care Act, the chief executive had direct authority and accountability for the whole public health system. That system is too large, as I have said, to operate optimally with all authority and accountability resting with one person.

So since 1 July 2019, with amendments to the act, responsibility for overall governance and oversight has transferred to governing boards and the local health networks. The chief executive, as a result, is now the system leader focused on the strategic direction of statewide policy as well as performance of the public health system. This role is outlined clearly in the functions proposed in this clause. Inherent in this role is the ability of the chief executive to enter into service agreements with the LHNs and the SA Ambulance Service outlining the moneys allocated for services to be provided.

Reflecting current practice, the amendments will mean the chief executive also has the express ability to issue binding policies and directives to LHNs and the Ambulance Service, setting the required statewide standards for performance of their functions. The chief executive will be able to issue directions or take remedial action if agreed performance measures and operational targets, as outlined in the service agreements, are not met.

The ability of the chief executive to issue statewide service plans will also contribute to the governance of the public health system and serve as a means of achieving integration and coordination across the system. The amendments proposed to the role of the chief executive will ensure that this role and that of the governing board and the chief executive officer of the local health network are clear to avoid duplication or omission.

The role of the chief executive of the department as a system leader is outlined in the National Health Reform Agreement where the role of the states and system management of public hospitals is outlined to include systemwide public hospital service planning and performance; purchasing of public hospital services and monitoring of delivery of services purchased; planning, funding and delivering capital planning funding with the commonwealth, and delivering teaching training and research; managing local health network performance and statewide public hospital industrial relations functions, including negotiation of enterprise bargaining agreements; and establishment of remunerations and employment terms and conditions to be adopted by local health networks.

The system leader role, sometimes known as system manager, has been adopted in other states where boards oversee the role of their hospitals consistent with the National Health Reform Agreement. The revised functions for the chief executive of the department bring South Australia in line with other Australian states and the role of the chief executive envisaged under the National Health Reform Agreement.

Mr PICTON: I want to look at new paragraph (j) which compares to the current paragraph (c). Current paragraph (c) is to ensure that appropriate standards of patient care and service delivery are adopted and applied in the delivery of healthcare services. That is proposed to be changed to (j) which would oversee, monitor and promote improvements in the safety and quality of health services provided by incorporated hospitals and SAAS.

So we have gone from ensuring that standards of patient care are delivered to overseeing improvements and promoting improvements in safety and quality of health care. This is obviously a key area of concern for all South Australians that we maintain safe and quality healthcare services. I acknowledge what the minister is saying in terms of the government's decision to downgrade the role of the chief executive in the healthcare system to not be responsible for as much. But what we are seeing here is a very significant step-down in terms of who is responsible for making sure that people have a good, safe and quality healthcare system being delivered.

If it is now no longer the chief executive's role to ensure that appropriate standards of patient care and service delivery are adopted, then whose role is it now in the healthcare system to ensure that patient care and service delivery are adopted? If I was to go to a hospital tomorrow and have a bad outcome, whose job is it legally to ensure that the appropriate care was delivered to me or to any other patient?

The Hon. J.A.W. GARDNER: I will answer directly the direct question that was put at the end. In relation to the preamble, I invite the member to reflect on the Hansard with respect to what I answered in relation to his first question. The direct answer is that as per section 33 of the Health Care Act in relation to the governing board.

Mr PICTON: We are saying that now the board is responsible for the delivery of healthcare services being safe and high quality, even though the boards have no ability to set their own budgets. We are now giving the minister the power to override any dispute about the service level agreement in place.

I guess I would ask the question of the minister: how is it that the boards—that cannot set the budget, that are not responsible or employ the staff under the act, that can be forced to agree now to their service level agreement—are now wholly responsible for the delivery and ensuring the safety and quality of the healthcare services when all those other inputs into it, particularly including the setting of the budget, the service level agreement and the employment of staff, are all still centrally determined and we are now saying that the chief executive is only overseeing, monitoring and promoting improvements?

Specifically where in section 33 are we making clear that this is now the boards' responsibility? Presumably up until today, if that is the case, there has been a dual responsibility that they are both legally responsible for ensuring the safety and quality of healthcare services because section 33 is already in operation in conjunction with the boards and in conjunction with the current section 7.

The Hon. J.A.W. GARDNER: Again, I encourage the member to reflect on the Hansard and my first answer, in which I set out the government's view that it is not necessarily an optimal situation for one chief executive sitting in an office in the CBD to have that responsibility for absolutely everything there, and particularly the words of section 33 of the act, which are pretty clear.

South Australia is actually the last Australian state to implement board governance, which was a key platform of the federal Labor government's 2010 health reforms under the National Health Reform Agreement. The shadow minister, I imagine, would be well aware of this having been an adviser to the federal health minister, the Hon. Nicola Roxon, at the time.

The National Health Reform Agreement sets out the roles and responsibilities of the governing boards and health departments as system leader, including funding arrangements and content of service agreements. While there are some differences between jurisdiction nationally, devolved health systems governance is modelled on these nationally agreed requirements. This includes South Australia, albeit we are very late to the party.

I note that in the second reading speech the shadow minister also took issue with some of the roles and responsibilities between the department and the LHNs. In particular, I noted that the chief executive remains the employing authority for staff. The governing boards do not set their own budgets or performance metrics, and he has repeated a number of these criticisms in the form of this question that he has now asked as well.

As a general comment, I would say that I am unaware of any government department or entity that is responsible for setting its own budget, except for the Department of Treasury, I imagine, but that is still responsible to cabinet, although I am sure that many of them would indeed prefer this were the case. From a health system governance perspective, I reiterate that the service agreements and their content are based on national requirements, including the National Health Reform Agreement.

I am advised that this includes a requirement that states monitor election performance based on nationally consistent performance indicators in the Australian Health Performance Framework. This allows national comparison of hospital and health service performance. In addition, I am advised that nationally the way in which LHNs are funded by the service agreements with their respective health department is also based on national requirements. I quote directly from the National Health Reform Agreement. The role of the system leader, referred to as a system manager—the chief executive—includes:

i. ensuring the legislative basis and governance arrangements for Local Hospital Networks are consistent with the objectives of [the agreement]—

I think that is what it means—

ii. system-wide public hospital service planning and performance;

iii. purchasing of public hospital services and monitoring delivery of services purchased;

iv. planning, funding and delivering capital;

v. planning, funding (with the commonwealth) and delivering teaching, training and research;

vi. managing Local Hospital Network performance; and

vii. State-wide public hospital industrial relations functions, including…establishment of remuneration and employment terms and conditions to be adopted by the Local Hospital Networks;

Hence, our reforms.

Clause passed.

Clause 6.

Mr DULUK: I move:

Amendment No 1 [Duluk–1]—

Page 5, lines 38 and 39 [clause 6, inserted section 28C(5)]—Delete 'must advise the parties of the decision in writing' and substitute:

must—

(a) advise the parties of the decision in writing; and

(b) cause a copy of the decision to be tabled in each House of Parliament within 7 sitting days after the service agreement to which the decision relates is entered into or varied.

To my reading, the government's bill contains a provision to the effect that if parties cannot agree on a term of, or variation to the service agreement, the minister may make a decision about the term or variation and must advise the parties in writing.

My amendment that I move today inserts a new requirement that, where the minister makes a decision about a term and variation of a service agreement, he must advise parties in writing and must also cause a copy of the decision to be tabled in each house of parliament within seven days after the service agreement to which the decision relates is entered into or varied.

The Hon. J.A.W. GARDNER: I thank the member for Waite for this constructive suggestion. The government supports the amendment.

Mr PICTON: I thank the member for Waite for moving this amendment, which is similar but slightly different from the amendment that I had previously moved and I believe the opposition had moved in the other place, which I believe the government opposed at the time, if I am correct.

I believe the key difference here is that instead of what my amendment said—which was to cause a copy of the decision to be tabled in each house of parliament within 12 sitting days of making the decision—it is now within seven days after the service agreement to which the decision relates is entered into or varied. Obviously, it is a tighter time in which it needs to be tabled in parliament. There may well be a longer period between when the decision is made and when the service agreement that it relates to is entered into or varied. I am not sure how long those gaps may tend to be, but that could potentially be a significant gap.

Certainly, this is something that we have been pushing for. I am glad we are now at the stage where there is something that the government will support. Essentially, through this legislation, we are now giving the minister the right to override decisions in relation to agreements between the chief executive and the local hospital networks. When this legislation was originally passed through the parliament, we raised concerns about how this was going to be put in place if disagreements occur. The answer was, 'We will work it out. They will all come to an agreement.'

The truth is that they did not come to an agreement, and there were many instances over the past couple of years where service level agreements were not entered into for very significant periods of time because that was the only way that local hospital network boards, under the legislation, had the right to say, 'We are not happy with what you are proposing with governance. This is an unreasonable request on us. The only ability that we have is to hold out signing the service level agreement.' So I believe we went a whole year without service level agreements even being in place, which is obviously such a central element of the legislation.

The minister is now seeking to fix that situation by giving him the power to override that, and I think it is good that we will now at least have the ability to know when he makes such a decision to override what those objections were because, under the original proposal that the minister brought forward, no-one would have been aware that such a decision had been made.

So a brief question to the member for Waite: what is the key difference in terms of the amendment he has moved and the amendment I had previously moved regarding why we are now looking at after the service agreement is entered into or varied as opposed to the time after the minister made a decision?

The CHAIR: Before I call the member for Waite, a point of clarification, member for Kaurna: you have not actually moved your amendment, it has merely been tabled.

Mr PICTON: Sorry; after I previously tabled it. I understand that the parliamentary convention is that even though I tabled mine first, because the member for Waite has a lower number on his it is going first. Technically, of course, I had not moved it in the parliament but I had certainly tabled it and circulated it, and obviously it was also moved in the other place.

The CHAIR: Yes so we have clarified that. You are exactly right in relation to standing order 363.

Mr DULUK: In relation to the member for Kaurna's question, there are some key differences. One is the time frame of the tabling of the document: mine is a seven-day turnaround and the member for Kaurna's is a 12-day turnaround. Whilst I support the member for Kaurna's desire—I think the whole parliament does—for greater public transparency on this issue, I think one of the key differences is around 'entering into' or 'varied'.

When the document is actually signed is a key difference. In my amendment it is when the actual document is signed that it is tabled before the parliament. Just looking at the member for Kaurna's amendment, it is advising the parties of the decision in writing. There is a difference between a decision being made and the actual execution of that decision and the formulation of that execution, which is what I am seeking to have tabled in parliament.

The Hon. J.A.W. GARDNER: I can offer some further reflections, now that the member for Kaurna has identified the detail of his amendment, on why the government prefers the member for Waite's suggested compromise—and I appreciate his wisdom in doing so.

The government's view, as expressed in the upper house in relation to the amendment drafted by the member for Kaurna—and, I suspect, put by the Hon. Mr Maher or one of his colleagues in the upper house—was that we did not believe it was practical or workable to table a decision of the minister about a clause of the service within 12 days that might compromise ongoing negotiations. If the minister were to make a decision about a term of the service agreement, this may occur before the service agreement has been agreed in completion. Tabling such a decision in parliament before that service agreement has been agreed in completion may, we believe, compromise the negotiation process and create confusion published in isolation.

I am advised that the minister does not intend to exercise ministerial interventions in negotiations as a matter of course. To the best of the government's knowledge, no other state or territory requires the publication or tabling of instances of such ministerial intervention. However, this government does support the principle of public transparency. Given the suggestion of the member for Waite that once the matter is concluded there is still a benefit to having that transparency, we are happy to support the suggestion of tabling at that point, in a very brief period of time but after the negotiations have been completed.

Mr PICTON: While the questions may be to the member, if the minister will indulge us and provide some context. When such a notice is tabled, how much detail will go into what the minister tables in terms of his decision-making? Will it just note that a decision was made to intervene or will it provide detail in terms of the exact criteria that were made to intervene?

The Hon. J.A.W. GARDNER: I note that the amendment as put forward—making this as a contribution formally for standing orders; one of my three, the last of my three actually, I think, on the amendment—I note the amendment sets out that it requests a copy of the decision to be tabled, the decision itself, whatever form that takes, I assume.

Amendment carried.

Mr PICTON: Have all the 2020-21 service level agreements been signed with governing boards and, if so, where is progress up to in relation to negotiations for the 2021-22 service level agreements?

The Hon. J.A.W. GARDNER: I am advised that all 10 LHNs have signed their service agreements for the Department for Health and Wellbeing for 2020-21, and these are published on the SA Health internet. In relation to the 2021-22 year, we are not up to that stage yet, and I expect they will be published when they are.

Mr PICTON: What is the legal status in terms of the operation of local health networks where there is no service level agreement in place? I note that the minister is saying that we are not up to that stage in terms of the next financial year, but we are not very far away now from that being in operation and there may potentially not be service level agreements in place at that time.

I also note that we have had over the past 24 months very extensive periods of time, perhaps even up to a year, where service level agreements have not been in place. Legally, how does the health system operate when there are no service level agreements in place under what is going to be part 4A of the Health Care Act?

The Hon. J.A.W. GARDNER: In instances where service agreements relating to the current financial year—whichever financial year that is, whichever one you are in—are not yet signed, quarterly performance meetings and ongoing discussions continue to take place between the department and local health networks under the same format as if the service agreements were signed. The service agreements are important governance documents that ensure that the department and the LHNs are transparent and clear as to commissioned services, performance targets and expectations, allowing the department to undertake its important role in performance monitoring support.

Directly to the member's question about legal status, regardless of the signature of service agreements, under the Health Care Act the governing boards are accountable for managing their allocated budgets so that performance targets are met and the operations of the LHNs are carried out efficiently, effectively and economically.

Mr PICTON: Have any board chairs in the past 12 months expressed concerns with the minister or the government in relation to their service level agreements and, if so, what were those concerns?

The Hon. J.A.W. GARDNER: The member has put a time frame on the question. Maybe if I give the information that I have, and if the member has further specific questions about specific time frames that are not addressed by the information I have, then I encourage him to seek further clarification.

My advice is that in 2019-20, which was the first year of operation of the governing boards, while the six rural LHNs signed parts of their agreements, the three metropolitan and the one statewide LHN, the Women's and Children's Health Network, did not. I am advised that the 2019-20 service agreements were issued to local health networks at a time when the new governing boards were indeed being established, and this resulted in significant delay in commencing communication and negotiation with the networks.

Key issues in negotiations between the department and the LHNs were focused on funding provided under the agreements as well as the format of the service agreement and the negotiation process—establishing a new process and boards, effectively. Although the CALHN and WCHN service agreements were unsigned for 2019-20, quarterly performance meetings and ongoing discussions took place between the department and LHNs under the same format as if the service agreements were signed. To develop 2020-21 service agreements, a significant review was undertaken that focused on changes based on the LHN feedback and a review of service agreements in other Australian jurisdictions.

This resulted in a condensed, tailored and streamlined agreement that was prepared in close collaboration with each LHN. We know that health service delivery and the way it is commissioned and funded are complex, so it makes sense that governing boards in their first year of operation took the time to immerse themselves in their role, undertake the appropriate due diligence and gain an understanding of the lay of the land within their LHN prior to agreeing to the service agreements.

Clause as amended passed.

Clause 7.

Mr PICTON: Clause 7 inserts that, as part of the governance arrangements, an incorporated hospital—i.e., an LHN—operates programs that promote preventative and primary health care, including primary health care of Aboriginal and Torres Strait Islander people within their communities. As I mentioned in my second reading contribution, an initiative of the government has been to set up Wellbeing SA outside the framework of this legislation, in which Wellbeing SA is running significant primary healthcare programs, in particular, a Hospital in the Home program, which is a rival program to the offering that has been in place for some time from local hospital networks and is run by a private provider.

Given that the governance always has asked and is continuing to ask local hospital networks, through the addition of this section, to run primary healthcare programs, does the government mandate that they use in addition to that the Wellbeing SA programs? What are the mechanics by which that operates? Is there a direction from the CE that they must use those programs, or do local hospital networks have complete discretion that they can choose to use a Wellbeing SA Hospital in the Home program if they want to or, if they do not want to, they do not have to?

The Hon. J.A.W. GARDNER: They are not mandated to use them; however, the chief executive could set policy directions and frameworks in relation to the proposition the members has put.

Mr PICTON: Are there any policy requests or frameworks in place at the moment in relation to the use of Wellbeing SA programs by local hospital networks or incorporated hospitals under the act?

The Hon. J.A.W. GARDNER: I will take that on notice and check.

The CHAIR: A question from the member for Kaurna—sorry, Narungga.

Mr ELLIS: Thank you, Mr Chair. I hope I can do as good a job as the member for Kaurna has done in asking questions. I have a question about governance and management arrangements. Correct me if I am wrong, minister, but I believe that the boundaries on which the regional LHNs are based originate from the former centralised model Country Health SA. Will there be an opportunity to review those boundaries?

By way of background, I provide the following example. In our LHN, Yorke and Mid North, we have Port Pirie Hospital and the Wallaroo Hospital situated quite closely together, within an hour of one another. We find that on the Copper Coast they are often competing against one another. We feel that they are competing against one another for resources, and I am sure there is a view amongst some that it might be best if the Pirie one was separated and that Wallaroo was the hub in that LHN, and that it was the major hospital and treated as such, whereas right now it might be treated as secondary to the Pirie hospital. My question succinctly is: will there be an opportunity to review the boundaries of the regional LHNs?

The Hon. J.A.W. GARDNER: I thank the member for Narungga for that probing question and I understand as the local member of parliament the connection he has to health networks in his community. I remember that when I was in the member for Narungga's electorate not so long ago we were reflecting on the services that were provided at the Kadina hospital and the extraordinary work that is done on Yorke Peninsula. In relation to the specifics of the question, I do not have that information here. We will check, we will take that on notice and we will bring back an answer to the member so that he can share that with his community.

Clause passed.

Clause 8 passed.

Clause 9.

Mr PICTON: I indicate that the opposition is opposing clause 9. We have outlined some of the reasons before, but we will raise them again. This proposal by the government loosens the conflict of interest provisions in relation to the membership of boards. The wording that was originally in the legislation was the wording the government put forward; in fact, I believe we had different wording and the government in the other place suggested this wording.

They are now seeking to weaken that to what we believe would create additional risks of conflict of interest. You do not even have to take our word for it, as I read out earlier the full letter from the Independent Commissioner Against Corruption Bruce Lander when he was in office. He believed that this amendment could heighten the possibility that a governing board member will have a conflict of interest. He said:

…relaxing the eligibility criteria for membership to a local hospital network Governing Board will tend to heighten the risk of actual, perceived and potential conflicts of interest emerging for those Board members who may provide services to a relevant local health network…in light of the existence of this control measure, I regard it as a question for the Parliament. If the Parliament wishes to remove eligibility criteria, that would further reduce the risk of this occurrence of conflict of interest.

Therefore the opposition is opposing this clause and encourages the government to also agree to remove this clause based on the views of the ICAC about the conflicts of interest in place.

This was raised in the other place and this has been raised by the SACOSS-led coalition of health groups, who sought to delete the clause because, in their view, people who are on the boards of, for instance, a private pathology company or part of a consultancy to a local hospital network could therefore be part of a governing board. SASMOA also provided a submission on this point and said:

There are various personnel levels within the South Australian hospital system, employees and executives of both hospitals and the Department, fee for service contractors and hospital Board Members. Employees and service providers, up until now, have not had the ability to participate on a public hospital board. It is assumed that this inability to participate is because the potential conflict of interests of the individual's agenda both internally and externally, may be inconsistent with the priorities, accountabilities and responsibilities of a public incorporated hospital.

The newly proposed change to this section now places significant risk that the interests of an individual's non-pecuniary and pecuniary interests could have priority over the public hospital interests and the community who subsidise our State hospital services eroding confidence in the governance.

SASMOA submits that the removal of section 33B(5)(b) dilutes the current protections afforded to our hospitals and increases the individual—

I have lost the page, so I might have to leave that quote there because I cannot find the second page. I think it is very clear—

The Hon. D.C. van Holst Pellekaan: It was very powerful.

Mr PICTON: It was very powerful.

The CHAIR: Member for Kaurna, perhaps you can provide it later to Hansard?

Mr PICTON: That's right; I can provide it later to Hansard.

The CHAIR: No, you cannot do that, apparently.

The Hon. D.C. van Holst Pellekaan interjecting:

Mr PICTON: Exactly. I think even if we look at what I was able to have from their letter, it said very clearly that it places a significant risk that:

…the interests of an individual's non-pecuniary and pecuniary interests could have priority over the public hospital interests and the community who subsidise our State hospital services eroding confidence in the governance.

I think there is a very clear question as to why is the government now looking to erode confidence in the governance arrangements, looking to remove this protection that it itself drafted in the original debate on this legislation and allow a possibility that you could have people who are contractors to a local hospital network who are also on the board of that hospital network.

For instance, in the case of the most famous consultancy that we have had in the past three years, KordaMentha, which was appointed at the local hospital network of central Adelaide and paid $37 million, you could have those employees working in that administration and at the same time, under this proposal, be sitting on the board of that hospital. Why is the government looking to do this?

The Hon. J.A.W. GARDNER: I thank the member for the question. Under the current provisions in the Health Care Act, it was intended that persons who work in the department or an LHN be excluded from eligibility on the governing board for that LHN and people who are engaged, of course, to work in our health services, in various ways outside of traditional employment arrangements, whether through visiting arrangements or contractual arrangements, such as fee for service arrangements in regional services—these things happen.

To ensure such persons are precluded from appointment, the Health Care Act provides a person is not eligible for appointment if 'the person provides a service to the incorporated hospital'. The key rationale for that was to ensure that those who have involvement in patient care at the LHN, either directly or through clinical governance processes and who may be in a position to influence a governing board that there is no risk or anomaly in patient care, are excluded from board member eligibility.

I am advised that an example of where such influence within a board contributed to tragic consequences occurred at the Djerriwarrh Health Services in Victoria, which experienced a high number of abnormal baby deaths that were potentially avoidable. The report of the review of hospital safety and quality assurance in Victoria, which followed this tragedy, recommended that the relevant Victorian health legislation be amended to include a requirement that at least one member of every public hospital board have contemporary knowledge of clinical practice and is at least somewhat experienced in clinical governance and that no person appointed to the board have an appointment as a clinician or be employed at the same hospital or health service.

The legal interpretation of the current provisions have taken a much wider application than intended, which has resulted in persons who may provide any form of service being ineligible for appointment, including those who own or work for local businesses that supply to regional hospitals and in certain circumstances somebody who works for a company that has a contract with the LHN. This proposed amendment through the bill removes that overly broad interpretation.

Any person who is employed or engaged by an LHN to work at that network either directly or through a commercial arrangement will not be eligible to be appointed to the governing board in line with the original intent. A person considered to provide a service to the LHN but who does not work at the network could therefore be considered on a case-by-case basis for a board vacancy as part of a merit-based selection process through which one aspect considered would be an assessment of any potential conflict of interest.

It is the government's view that there are sufficient statutory and other checks and balances to ensure that situations in which persons who do not work within the LHN, but who may have potential pecuniary or personal interests in matters associated with the LHN, are dealt with appropriately. The state government strives to appoint persons of a very high calibre to the government boards, and by their very nature this means persons appointed will be likely to hold several other senior positions and have broad expertise and interests.

The health system is complex. If members have experience into the knowledge of the public health system, we believe this will benefit the board, the LHN and the community. We do not believe that it is in the best interests of our state and our health system to limit the ability to appoint talented persons with valuable and relevant skills, qualifications and experience to our governing board. Our LHN governing boards have the most extensive disclosure and conflict of interest requirements in the state, far exceeding those requirements for other SA government boards, including SA Water, the Essential Services Commission and Super SA.

We believe that this clause, the amendment to the act, the bill that we are putting forward, strikes the right balance when coupled with the extensive legislative disclosure requirements, duties and offences.

Mr PICTON: That certainly outlined why you need protections, and it certainly outlined some of the reasons why protections should be put in place, but it does not really seek to outline why the government is now weakening it to allow people who are service providers, perhaps consultants, perhaps private pathology companies or the like, to be able to sit on boards.

I have good news. I found the second page of the SASMOA letter and, given the interest in it, I think it is worth touching on. They stated:

…increases the individual interests of appointed hospital board members to dominate decision making and outcomes to the provision of hospital services for self-interest, as individuals or directors of private companies, they seek to utilise their position on the hospital board to tender for hospital contracts.

There has been no definitive explanation why a member of a hospital board, who may be engaged to provide a service to the incorporated hospital, and be appointed to a hospital board, are less likely to undermine the function and confidence in our hospitals in contrast to the judgement of an employee of a Hospital or the Department. SASMOA submits an individual who provides a service to the incorporated hospital and is a member of the hospital board could reasonably be expected to either knowingly or unknowingly utilise the information and their position to gain an advantage by their appointment to the hospital board resulting in an unfair advantage over competitors. The closer the individual is to influence the outcome of a hospital tender or procurement process, in provision of a service to the hospital or selection of senior executives, the greater the public requires protection from such misconduct.

Additionally, an appointed hospital board member, to whom a Chief Executive Office is accountable and responsible, may face challenges ignoring the tender of a hospital board member's private interest/company to provide a service for the hospital.

Public health care is paid for by the community. The community must have the right to assume a robust process and confidence in the spending of public money free of self-interest and misconduct. This amendment increases the risk for corruption, clashes of interest and anti-competitive behaviour.

If there are exceptions, then the legislation and regulations should deal with the exceptions, not increase the risk that an appointed individual to a hospital incorporated board who also may provide a service to the hospital, may be compromised by their public and private responsibilities/interests.

Yours sincerely,

Bernadette Mulholland

SASMOA Chief Industrial Officer

So clearly we have a very strong argument from the union representing the doctors who work in our public hospitals, saying that they are very concerned that what the government is seeking to do here will allow people who are on boards to have an unfair advantage in terms of procurement and that that potentially increases the risks of corruption, clashes of interest and anticompetitive behaviour.

Again, I ask the minister: is there some example that he can point to of a person who is providing a service—a contractor or a consultant—who we really need to have on a hospital board and why that will not create the potential for conflicts of interest and the potential for corruption that we have heard about through the ICAC letter and through the SASMOA letter?

The Hon. J.A.W. GARDNER: I thank the member. I was going to reflect, in relation to his first contribution, that, when he talked about the ICAC having concerns, he was of course talking about the letter from the former ICAC commissioner. I previously advised the house of the response we have had from the current ICAC commissioner in which she has declined to put forward a position.

In relation to the member's characterisation of my earlier contribution, I respectfully disagree. I think I made quite clear the purpose of the original restrictions—a very significant example of why the desire for there to be a level of restriction was in place—but particularly that the purpose for which the restriction was originally put in place has indeed been significantly broadened in the interpretation of that restriction.

I think there are a number of categories of people who might operate at a high level and for one reason or another would actually be of value to boards, but it would be a merit-based selection process and very appropriate for conflicts of interest. I do not believe that I have a great deal to add to my earlier answer, and I invite the member to reflect further on the Hansard of the original answer.

With the indulgence of the house, I would like very briefly to provide a response to the member for Narungga's earlier question in which I am pleased to share with the house that, as board governance provisions in the Health Care Act will be reviewed, as required by the first bill, the government is happy to include in that review the issue of boundaries. So I invite and encourage the member to write a letter to the health minister, if he has not already, to get that in writing, but I have shared that with the house.

Mr ELLIS: Regarding the composition of governing boards, in my view the devolution of decision-making has been a tremendous step forward for the health system. But, clearly, as a part of that there were considerably important jobs that needed to be filled, and it is absolutely sensible that those positions be filled on skills-based criteria. Will localised positions on that board be given some priority? The inspiration behind this initiative was to return local decision-making to local hospitals. As these boards develop and mature, it would be pleasing to see them populated by local people making decisions about their local hospitals. So is some priority given to local decision-making?

The Hon. J.A.W. GARDNER: I thank the member for his question and note that, as part of his advocacy, he made this point in his second reading speech, and he has followed through on his commitment made during that speech to seek this assurance in the committee stage. As the member is aware, one of the fundamental principles behind the government's commitment to decentralise the public health system and establish local health network governing boards was to put responsibility and accountability for our local health networks at the local level to ensure that clinicians and communities are engaged in making decisions about their local health service. We believe that decisions made at the local level by people with local knowledge and experience will be better and more informed decisions.

I consulted with the Minister for Health and Wellbeing after hearing the member for Narungga's second reading contribution. He has advised that, under section 33B(1) and 33B(2)(g) of the Health Care Act, the minister is required to appoint persons who collectively have, in the opinion of the minister, knowledge, skills and experience necessary to enable the board to carry out its functions effectively, to enable the effective performance of the board's functions.

The minister has also advised that, in his opinion, for boards serving in regional areas of the state, having at least one member with the knowledge and experience of the local region served by the governing board, including through residing or working in the local region, is of great value to the effective performance of the board's functions and would assist the board to make well-informed decisions about local health service delivery.

In making appointments to the six regional local health network governing boards, the minister has assured me that, where possible, he seeks to appoint persons who are local residents who have deep connection to the local region. As they are skill-based boards rather than representative boards, which the member for Narungga recognised in his second reading speech, this is of course balanced with the need to maintain a broad skills mix of the governing board.

Progress reported; committee to sit again.