Conclusion

Despite the substantial centralization that has occurred in Australian federal­ism in general, and the health system in particular, public hospitals remain a core state government responsibility.

Our interviews indicate that beyond the initial funding disputes and the cautiousness of some smaller jurisdictions, there was very little other conten­tion about the change. For the Commonwealth, devolved governance at state level was regarded as an important complement to enable newly established Medicare Locals (later phn s) to operate more effectively and to encourage a shift towards a more integrated, patient-centric health system able to encour­age collaboration between primary health, hospitals and allied services. For the states, there was general agreement that devolution could improve gover­nance and accountability, and was consistent with international evidence, and also with changes occurring in other human service areas (such as disability care or aspects of education) in which central departments increasingly took on the role of system managers while service provision was devolved to the relevant agencies.

Having embedded a much higher degree of joint governance into Australian health care, perhaps even irreversibly (given the opposition that arose to proposed changes in intergovernmental architecture), the question is now whether Australian governments, as well as the new organizations and stakeholders involved, can achieve the required and desired degree of local intergovernmental coordination, system integration and, ultimately, outcomes for patients.

It is yet early days in the shift from autonomy to collaboration. The nhra has increased integration and functioning of cooperative federalism, but how dura­ble this proves to be will depend among other things on whether the incentives are there to drive system integration, whether the necessary capacity-building occurs, and how strong the links are between Commonwealth and state policy making and administration.

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