Community Health, Capital Formation & Infrastructure Renewal

Capital formation and infrastructure renewal is a contested topic in policy dialogue. The emergence and practice of new methods for capital formation has penetrated most areas of government, especially in Victoria. This paper seeks firstly, briefly demonstrate the existence of a policy problem in the provision of capital for community health, and then briefly canvass the positions of actors in health policy and suggest some approaches that will be taken in developing a policy response.

Community Health in Australia emerged in the late 1960s and 1970s, foreshadowing ideas later articulated in the Alma Ata declaration and the Ottawa Charter[1], along the lines of reorienting health services into the community. These ideas led to the

development of a preventative and health promotion and health development focus that identified the importance of services being provided in the community close to clients and responsive to their needs[2]

Despite a shake-up in the 1990s, which saw amalgamations and competitive market based reforms[3], community health has positioned itself as an important part of primary health care policy in Victoria. In 2004/5 the Department of Human Services (DHS) reported that it employs 2,029 people (EFT)[4] through funded programs, and had over 1 million ‘occasions of service’[5]. Community and women’s health had 164,866 registered clients in 2004/05.[6]

Community health services in Victoria deliver a number of services including Allied Health[7], counselling, nursing and health promotion. Many community health centres run or are co-located with general practitioner services. They are Victoria’s largest providers of Home and Community Care programs (HACC)[8] and represent 40 percent of agencies delivering DHS funded drug and alcohol programs.[9]

Funding for Community Health is largely sourced from state governments, with over half of the sector’s recurrent funding coming from the Community Health Program and the Home and Community Care programs. The Commonwealth had a role in community health in the 1970s, but now there is almost no federal funding, and very little funding from local government.[10]

Most program funding streams in community health does not provide capital support. According to the RRHACS Division Policy and Funding Plan 2006-07 to 2008-09 only one activity under the Community Health Care output group provides capital, and this funding is only provided for maintenance, repair and replacement of building related assets.[11]

In 2000 DHS conducted a building and conditions survey that “revealed an expanding service sector largely housed in premises unsuitable to deliver an increasing range and complexity of services”[12] The same study found that only 56 percent of community health services rated their facilities as satisfactory.

Community Health Services – creating a healthier Victoria notes that,

the significant and rapid expansion of service delivery and the co-location of other community-based services over the last 10–15 years means that the projected costs for purpose-built facilities now ranges from $4 million to more than $10 million.[13]

Spread over even a handful of community health services the financial burden of renewing infrastructure is challenging indeed.

In recent years the amount of government capital has been increasing in line with trends across all Victorian state government activities.

The Victorian Budget Papers from 2001-02 to 2006-07 shows some of community health’s share of capital funding from within DHS (see figure 2).[14] According to the Australian Institute of Health and Welfare capital expenditure in the health sector in Victoria was $461 million in 2004-05[15], making dedicated expenditure on community health infrastructure only 5 percent of this total.

This then is the policy problem - a fundamental mismatch between funding for capital expenditure and meeting the infrastructure needs of community health services.

Community health is not an uncontested sector. The very ideals of community health have been seen as a direct threat to the primacy of the biomedical view of health. These ideals place values such as equity and participation front and centre - in terms of both location and governance practice.

These ideals are quite distinct, and sometimes in conflict to those of biomedicine, which views health policy through the lenses of disease, individuals and curative care. However, in Australia the ideals of community health have been diluted through the delivery of funding to address, for example, prevention as an individual interaction. This represents a process of community health adapting so to survive in the face of opposition from key proponents of bio medicine.

Given this, and recent developments in Primary Care in Victoria[16], the final paper will look at various actors and their positioning on the issue of funding. The key overlying issues will be, what share of the health infrastructure pie should community health get, and if there is to be an attempt to form public-private partnerships or some variation, should this even happen, and what is the realm of the private sector, the state and the community sector?

Given the above a number of approaches will be examined in addressing the problem in the final paper.

Firstly, responses within the state government sector including documentation of the extent of the problem, formation of Primary Care Partnerships encouraging service planning, co-ordination and co-location at community hubs enabling greater efficiency in terms of capital renewal will need to be explored.

Secondly, the potential for expanded responsibilities from other levels of government, namely federal and local, will also be examined.

Thirdly, alternative sources for capital formation will be examined including the much talked about area of public finance initiatives or public private partnerships (PPPs) in their different guises. This is still a contested policy terrain both locally and internationally.

Specific literature on management issues in community health is sparse, and almost non existent in the Australian context when looking at capital formation and infrastructure provision.

However, there has been substantial work done in articulating government policies in relation to community health, and in documenting and analysing government approaches to infrastructure financing and provision that will also prove useful. Almost inevitably, however, this project will require some direct research looking at some case studies of models of direct government provision, public private partnerships and any other alternative models that may or may not emerge.

In conclusion, there is a need for this project to move forward give the mismatch between the growth of the sector, its centrality in new networked partnerships (PCPs) and the adequacy, or otherwise of current infrastructure.

[1] World Health Organisation "The Ottawa Charter for Health Promotion", , 31 March 2007.

[2] P. Stanton, "Competitive Health Policies and Community Health," Social Science & Medicine, Vol 52, No. 5,2001. p. 671

[3] Ibid

[4] Department of Human Services. Primary Health Report 2004–05,Melbourne: Department of Human Services, p. 7

[5] Ibid. p. 8

[6] Ibid.p. 9

[7] Ibid. p. 2

[8] Ibid.

[9] Ibid.

[10] Australian Institute of Health and Welfare (AIHW). Health Expenditure Australia 2004–05,Canberra: September 2006. p. 36

[11] Rural and Regional Health and Aged Care Services Division, "Rural and Regional Health and Aged Care Services Division Policy and Funding Plan 2006-07 to 2008-09," ed. Department of Human Services (2006). pp. 140-142

[12] Primary and Community Health Branch, "Community Health Services––Creating a Healthier Victoria," (Primary and Community Health Branch,, 2004). p. 29

[13] Ibid. p. 29

[14] In particular in there may have been some community health capital spending in the Health ICT Strategy (2003-04), Statewide Infrastructure Renewal Fund (2001-02, 2002-03, 2004-05) and Dental Health Chair Upgrades (2004-05).

[15] Australian Institute of Health and Welfare (AIHW). Health Expenditure Australia 2004–05,p. 119

[16] M. Oliver-Weymouth, "Primary Care Partnerships: New Approaches to Primary Health Care," Health Issues, Vol No. 67,2001. Primary Care Partnerships will be discussed in greater length in the later paper.