Access to State-Managed Adult Mental Health Services

Audit finding – There has been limited progress implementing the Plan since it was released in 2015

The Plan was soundly based, but lacked an implementation plan

Since 2015, little progress has been made against the Plan. The Plan was widely accepted, endorsed, and released by the then Minister, but no implementation or funding plan to support its delivery was developed. The MHC has completed some underpinning engagement and service design work, but no system-wide program of actions was developed. While the MHC remains responsible for the planning, strategy and commissioning to implement the Plan, it is not clear what the other entities are accountable for.

The years 2017 to 2020 were identified in the Plan as the key phase in rebalancing the mix of services offered by the system. Although there was an overall 6% increase in expenditure since the Plan was launched, service provision has largely continued to be based on what was delivered the previous year, and overall service reform has been limited. In its 2019 update of the Plan’s progress, the MHC reported that it had finalised 24% of projects it expected to be complete by 2017.

The Plan was developed with reference to the National Services Planning Framework. It included sound initiatives that were accepted by a large range of stakeholders including consumers of mental health services, the former Drug and Alcohol Office, the Department of Health and the Department of Corrective Services.

Based on the population and geography of WA, the Plan stated that the level of mental health services was significantly below that required to meet all the needs of people with a severe mental illness by the end of 2025. Specifically, hospital-based inpatient care was estimated to be 74% of what was needed, community treatment services were at 71%, community support services were at 20% and community bed-based services were at 40%.

The Plan proposed a significant investment in community services and identified that there was also a funding gap for hospital services and residential services. To address the funding shortfall, the Plan suggested a significant initial investment in a greater range of community care options to deliver long-term efficiency gains and more tailored care. There was extensive consultation on the Plan and it was accepted by a wide range of stakeholders.

The MHC has not yet made progress in rebalancing investment to move away from investing in more high-cost acute hospital-based services. The Plan recognised that the distribution of funding in 2012-13 was inefficient and aimed to change the way funding was distributed by the end of 2025. By the end of 2017-18 the funding proportion for hospital beds had not moved down as expected.

In the 2017-18 financial year, the MHC spent $803 million on mental health services, or 13% of all total WA Health expenditure. The expenditure mix was:

  • community support services $37 million (4.6%)
  • community treatment services $347 million (43.2%)
  • community bed-based services $31 million (3.9%)
  • hospital-based services $378 million (47.1%)
  • prevention activity $10 million (1.2%).

The proportion of hospital-based care increased from 42% to 47%, moving further away from the optimal 29% spend the MHC would like to achieve by the end of 2025.

The proportion of funding towards community treatment services has remained the same at 43%. However, the proportion of funding for both prevention and community support has decreased instead of steadily increasing (3% to 1% and 8% to 5% respectively) (Figure 2).

Analysis of funding mix proposed in the Plan

The lack of progress is in part because the Plan lacked some key elements that would have improved the chances of successful implementation. For example, not having a detailed implementation plan that demonstrated why initiatives were prioritised and how they would be paid for has made the delivery of the Plan reliant on ad-hoc funding and resulted in opportunistic implementation of initiatives rather than a co-ordinated move toward the desired mix of services. It also makes it difficult for the MHC to demonstrate how the balance of investment and service mix in the Plan will be achieved by 2025.

Without an agreed funding plan, the MHC has not secured the additional investment needed to establish new services

The Plan did not include an agreed investment strategy or funding plan that allowed continued funding for in-patient beds alongside investment in alternative and additional care settings. In the Plan, the MHC noted the absence of agreed funding and stated that it would take a phased approach and develop business cases for each initiative. In practice, the MHC has struggled to secure the investment needed to deliver a more cost effective mix of services.

The MHC spent $803 million on mental health services in 2017-18, an increase of $41 million since 2015-16. Current funding mechanisms create a number of barriers to changing the mix of services. In part, this is because around $400 million is activity based funding (ABF) from the Commonwealth which is tied to existing hospital-based services. Establishing new services, particularly if it involves new or expanded facilities, requires additional capital investment, and the cooperation of other partners that control the existing infrastructure.

Hospital bed-based mental health services are funded through the ABF model. This funding can only be used for specified purposes, in this case specialised mental health hospital beds. If the MHC wants to re-direct the funding to other mental health services, it needs to provide the Department of Treasury with a business case justifying why the money should be re-directed. This in turn means the HSPs lose the funding for the beds because funds have been redirected. As a result, they would have to reduce bed numbers and until alternative services have been established there will be less access for those seeking mental health care.

Activity based funding (ABF) for hospitals means a price is set for all of a hospital’s activities and the hospital receives funding every time it completes an activity. The cost of activity is provided to the Independent Hospital Pricing Authority who then calculates the national efficient price. This price is used by the Department of Treasury to calculate how much funding the hospital will receive for each activity it completes.

The activities funded include stays where someone is admitted with a mental health diagnosis to a mental health hospital bed. Hospitals are paid when the person leaves hospital, known as ‘separation’. 

Community treatment services are block funded through the ABF model, meaning they are funded in lump sum payments.

In August 2011, all states and territories entered into the National Health Reform Agreement with the Commonwealth. The main aim of this agreement was to deliver a nationally integrated and locally controlled health system and this is where ABF funding originated. The hospital services funded under this agreement include: all admitted and non-admitted services, all ED services provided by a recognised ED and other outpatient, mental health, sub-acute services that are public hospital services.


The MHC purchases mental health services from providers. If the MHC decides that it is willing to purchase a new service from a HSP, the HSP needs to have the infrastructure in place to provide the service. If new infrastructure is required, the MHC or the Department have to negotiate the capital funding required to build the infrastructure in order for the MHC to be able to purchase the service. This is a consequence of the organisational structure, where the Department controls the infrastructure used to provide mental health services and MHC is responsible for determining the service mix and purchasing services to deliver the desired service mix.

The MHC did not develop an agreed strategy that articulated how capital investment would be provided. This has contributed to the limited funding directed to the Plan’s initiatives. The MHC’s delivery of the Plan’s initiatives is dependent on ad-hoc funding, based on individual business cases. This approach has resulted in patchy implementation of the Plan, and prolonged reliance on higher-cost hospital services.

It is not clear who is ultimately responsible for the efficient and effective management of mental health services

Clear accountability is fundamental in driving overall system wide improvement. A lack of clear accountability for the performance of the mental health system overall, has limited the Plan’s implementation. It is not clear who is ultimately responsible for the efficient and effective management of mental health services. Under current governance arrangements, the MHC and the Department both appear to be responsible for leading the strategic direction of mental health services. This is one of the reasons that has led to both entities implementing ad-hoc change, and not delivering the more significant impact that a better coordinated approach to implementing the Plan and managing the mental health system would enable.  

Good governance requires that each entity understands the overall strategic objectives for the mental health system, and their roles and responsibilities in delivering them. But the roles and responsibilities of the entities currently involved in delivering mental health services are not clear. Issues with accountability have been raised in a number of reviews.

The 2018 Review of Safety and Quality in the WA Health System found that the Department recognised it still needed to work to ‘fully operationalise its role as an effective system manager’. The lack of clarity was also highlighted in the Sustainable Health Review Interim Report to the Western Australian Government. This report recommended that a clinical governance review in mental health be immediately completed to simplify and clarify the roles and responsibilities between the Department and the MHC. The recommended Clinical Governance Review in mental health is currently underway.

The Health Services Act 2016 appointed the Department as system manager. In this role it is responsible for the overall management, performance and strategic direction of WA Health. However, since its creation in 2010, the MHC is also responsible for leading mental health reform throughout WA and working towards a modern effective mental health system (Figure 3).

Organisational structure of key mental health entities

The Head Agreement between the Department and the MHC was intended to clarify the division of responsibilities. It maintains that both entities are responsible and must work together to determine health service priorities. In implementing the Plan, HSPs deliver the vast majority of the services and follow direction from both the MHC and the Department. To effectively implement the changes in service mix, HSPs need clear, coordinated direction from the MHC and the Department.

Some parts of the Plan have been partially implemented, but it is not yet clear if these services are delivering the planned benefits

The Plan set out to broaden the range of community based services, specifically through establishing 8 step-up/step-down facilities and delivering around 20% of hospital mental health beds through Hospital in the Home (HITH) by the end of 2025. Three of the 8 step-up/step-down services have so far been opened, and HITH capacity has expanded, but occupancy levels indicate the service may not be able to be used by a wide variety of people.

Step-up/step-down facilities are a bridge between community and hospital care, and HITH allows people to receive mental health care in their home instead of in a hospital. Providing a continuum of integrated care options is necessary to meet the varying needs of individuals as these needs change over time. Step-up/step-down services and HITH help to establish the continuum of care necessary.

Three of 8 step-up/step-down facilities have been established, and more are planned to open by the end of 2020

The Plan set out to broaden the range of community based services, partly by establishing 8 step-up/step-down facilities. Following the establishment of the Joondalup step-up/step-down in 2013, the Plan proposed that 5 additional services would be created immediately, with another 2 planned by 2025. However, only 2 have been delivered to date, in Rockingham and Albany. The 3 services provide a total of 38 beds.

In November 2018, the Minister for Mental Health announced funding of $28 million to establish the remaining services listed in the Plan (Broome, Bunbury, Kalgoorlie and Karratha) and an additional service (Geraldton). The MHC anticipates that the majority of these SUSD services will be operational in 2020. The MHC informed us that establishing a step-up/step-down can involve finding the right location, design and construction of the facility.

SUSD facilities are short stay accommodation services that allow people to step-up from the community when they need additional support, and support people stepping down from hospital care, as they work to re-establish themselves in the community. The MHC reported that since they were established 66% of admissions to the step-up/step-downs in these sites were people stepping up from the community and 34% were stepping down. The MHC believes that this ratio is consistent with national experience, and is effective in helping people to avoid unnecessary hospital stays.

While there will be benefits for the people who use these services, even when all the planned sites are in place, the services will not deal with everyone’s needs. For example:

  • The service eligibility criteria for step-up/step-downs require that a person has pre-existing accommodation or has secured accommodation in the community. Consequently, the services are not accessible to people who are homeless or who may have lost their accommodation during an extended hospital stay and are seeking to step-down into community services.
  • According to WACHS, they only refer people with a low acuity or low complexity to the Albany step-up/step-down, meaning some people are unable to step-down from hospital care into the service. WACHS advised that the service best meets the needs of people with relatively low risk mental health symptoms stepping-up.
  • The provider of one of the step-up/step-down facilities reported that it can take up to 2 weeks from referral for people to access the service and this significant delay poses problems for people at risk of worsening mental health. Clinicians also reported that a lack of integration between hospitals and step-up/step-down facilities can delay access for people stepping down.

Rockingham was identified in the Plan, but Albany was not. The MHC informed us that the Albany service was established ahead of others in the Plan because WACHS had a vacant facility that could be adapted for this purpose. This meant the MHC did not have to identify a site, secure capital funding and go through local consultation and approvals processes to establish the service.

South Metropolitan Health Service (SMHS) manages a step-up/step-down service that has been operating since 2001. It provides community-based care to adults who are at risk of becoming unwell or need intensive support before they return home. People can stay there for up to 4 weeks. The service has a higher degree of clinical input than services commissioned by the MHC, in this case from Fremantle Mental Health Service. SMHS believes this helps to ensure that people can appropriately step-down after a stay in hospital, reporting that over the last 5 years nearly half of the people who use the service are stepping down.

Mental health Hospital in the Home services are not reaching expected numbers

HITH allows people to access mental health services in their home and supports one of the Plan’s objectives to provide more person-centred care closer to home. The Plan aims to deliver about 20% of hospital beds through HITH by the end of 2025. The expansion of mental health HITH beds was also intended to free up capacity in hospital services. To date, HITH services are only provided by North Metropolitan Health Service (NMHS), and occupancy has been below target.

NMHS currently provides 48 HITH beds, up from 16 when the service was funded by the MHC under ABF in 2014. We found that since 2015 the occupancy of HITH services has been below 70% (Figure 4), which is below the target occupancy level of 85%. This means there is under-utilised capacity which affects the cost efficiency of the initiative. It also reduces its impact on hospital capacity since more people cannot be directed to HITH beds and instead utilise hospital beds.

It is not clear why the service is not more utilised given that NMHS reported that consumers, carers and clinicians were very positive about the service. NMHS indicated that eligibility criteria could limit the number of people who could access the service. The MHC has not reviewed how the service is working in order to improve its utilisation and learn lessons for rolling it out to other HSPs, which will be needed to achieve the 2025 target.    

Hospital in the Home occupancy and capacity: 2014 - 2017

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