The federal Department of Health and Aged Care needs a deeper commercial understanding of the providers it funds and regulates, including hospitals and medical specialists, to avoid being influenced by those with the “loudest voices”.

The recommendation has been published in a capability review of the department [link here] –  the first in almost a decade, which was conducted as part of a pilot program ordered by the Australian Public Service Commission.

“These providers include hospitals, aged care homes, general practitioners, medical specialists and allied health practitioners,” the report stated.

“The knowledge required includes the economics of the businesses, the distribution curve of providers in terms of performance, and the impact of funding or regulatory changes on the sector.

“Without that knowledge, the department is seen by many to be susceptible to place too much weight on the loudest voices in discussions and negotiations, when they often represent the views of less sophisticated providers or practitioners rather than the average or more sophisticated providers.”

The reviewers, which included the Department of Infrastructure deputy secretary and two former senior public servants, said the health department had access to a lot of data and expertise in this area but wasn’t making full use of its resources.

Other criticisms raised by stakeholders included the need for the department to work more closely and collaboratively with its state and territory counterparts.

This included the adoption of a less “transactional way” of engagement.

“We heard from several state and territory stakeholders that during normal operations the department can appear ‘brusque’ and ‘dismissive’ in some of its engagements, and unlikely to engage with genuine interest about ideas or possible solutions developed elsewhere in the public sector,” the authors noted.

The review team said it often heard praise for the knowledge, commitment and ability of the department’s most senior staff, such as the executive and division heads, but feedback on mid-level leaders, such as branch heads, was mixed.

This was partly blamed on high staff turnover and the loss of corporate knowledge.

The reviewers also took aim at the department’s evaluation of grants, as the largest single granting agency in the Commonwealth with almost 18,000 grants in the last financial year alone valued at $9.7 billion – and with that figure set to grow.

“We heard commentary on the large number of grants, the challenges in maintaining relationships when different parts are managed by different people in different organisations, risks around automation and fraud, and the difficulty in evaluating grants and having ownership of the outcomes when not involved in all stages of the grant,” the report stated.

Before retiring as department secretary, Professor Brendan Murphy responded to the review stating that the intellect, talent and dedication of staff had been impressive and they had delivered outstanding achievements in the last few years.

You can read the full report here.