This paper provides background material on governance issues in the Australian health care system, an overview of health care financing issues in an international context, a summary of the discussions and views expressed at a recent Academy roundtable, and commentary on the recommendations of the Health and Hospitals Reform Commission.

Public hospitals and their performance was the major health issue in the 2007 national election. The now Prime Minister, as Opposition leader, announced that he would develop a national reform plan 'designed to eliminate duplication and overlap between the States and the Commonwealth' and 'to move beyond the blame game'. He also stated his intention to hold a national referendum to allow the Commonwealth to take over the running of public hospitals if reform could not be achieved cooperatively with the States by the middle of 2009.

The reform task, developing the long term plan for Australia's health care system, was given to the Health and Hospitals Reform Commission, a ten person committee under the chairmanship of a paediatrician, now working as the medical advisor for a large private insurer, with ex-politicians, medical practitioners, one nurse, and others with both corporate and public sector experience. The Interim Report of the Commission was publicly released in February 2009 and the Final Report in June of the same year. The Interim Report set out 116 reform directions, ranging from specific recommendations to aspirational goals. The Committee commented that the single most controversial issue it was called to address was the split of responsibilities between the Commonwealth and States and Territories, essentially the governance, funding and operating of public hospitals. The Interim Report was released for further discussion and consultation to assist in the development of the Final Report.