Australia's unique geography and federated system of governance has, over time, led to a health care system that is fragmented and duplicative, inequitable and less efficient than it might be. Shifting health care governance and funding to regional agencies that are more responsive to the needs of communities would improve both equity and effectiveness in Australian health care.  

At present, access to health care services in Australia often reflects the inverse care law: ‘those who need the most health services receive the least, and those who need the least receive the most'.

The reform suggestions of the National Health and Hospitals Reform Commission in its final report are inadequate to solve the problems we face. Some will further entrench the existing inequities and inefficiencies. For example:

• the Commission's approach to primary care does not address the issue of integration with other services, including hospital care, aged care, and the proposed expansion of subacute care; .
• the Medicare Select proposal has very limited or perhaps no capacity to redistribute funds to areas of increased need and workforce shortage - funds would continue to follow the provider; and
• the recommendation for a needs-based increase in funding in rural and remote locations fails to explain why needs-based funding should not apply to all areas.

The authors of this paper propose the establishment of local Regional Health Organisations (RHOs) across Australia, with each responsible for the health care needs of a defined population within their region. The RHO governance and funding model will improve the provision of health care by:

• shifting responsibility for health care service planning and delivery closer to citizens;
• improving the responsiveness and accountability of health care and helping to eliminate cost and blame shifting; and,
• addressing the inequity of access and health outcomes and inequitable allocation of health resources.

This model proposes that all current health care funding from local, state and federal governments be pooled within a national agency and equitably distributed to RHOs on the basis of evidence about health care needs. Publicly available information on local health needs and health spending (regularly collected and updated in accordance with national standards) would inform decisions by RHOs about the appropriate allocation of services and resources in that region. This approach would benefit consumers, health professionals and governments as it would:

• redress current the inequities in health care access, quality and effectiveness;
• improve clinical co-ordination so that patients can quickly access the most appropriate service provider for their needs;
• improve the collection of data about the specific health services required in different regions;
• integrate planning so that health services develop in coordinated and complementary ways that reflect local needs;
• improve the accountability of health care providers to local communities (with regard to quality, efficiency, access, and health outcomes);
• improve the efficiency of health resource allocation;
• improve the effectiveness of health care by ensuring health care funding is used to address priority health needs;
• increase consumer and citizen input into health service planning and delivery; and,
• create healthier communities, with greater potential to improve national productivity and contribute to economic and social development.