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Focus: Changes to the Queensland health system

31 August 2006

In this issue: we look at changes to the Queensland health system, the Community Services Obligation funding pool for pharmaceutical wholesalers and distributors, and a case concerning a parental dispute over the appropriate disposal of their deceased daughter.

Changes to the Queensland health system

In brief: The Queensland Government has legislated for changes to the state health system in a bid to improve complaints handling and to address general concerns about the quality and safety of health services. A Health Quality and Complaints Commission, established on 1 July 2006, was implemented under the Health Quality and Complaints Commission Act 2006 (Qld), which also introduces new 'quality improvement' obligations on health service providers. Health service providers need to be aware of these new obligations, and the changes to complaints management processes. Partner Andrew Buchanan and Lawyer Alice Cope report.


In April 2005, in response to various general and specific concerns, the Queensland Government announced a review of the Queensland health system (the Forster Review 1). One recommendation of the Forster Review was the adoption of a new complaints model, which was then established by the Health Quality and Complaints Commission Act 2006 (Qld) (the Act). The Act introduces significant changes to the delivery of public and private health services in Queensland and will affect hospitals, doctors, registered health professionals and nursing homes.

The Commission's powers and functions

The Act's main objective is to provide for oversight and review of, and improvement in, the quality of health services, and independent review and management of health complaints. The Act establishes the Health Quality and Complaints Commission (the Commission), giving it broad functions and powers, including participation in, and management of, the new complaints processes. This involves monitoring and reporting on health services providers' compliance with their obligations under the Act, and investigation of various matters under the Act.

Subsection 20(1) of the Act places an obligation on health service providers to 'establish, maintain and implement reasonable processes to improve the quality of health services provided'. This includes processes to monitor the quality of the health services provided, and to protect the health and wellbeing of users of the health services. The Act gives the Commission powers to make standards on this obligation, which may state a way in which a provider can comply with the obligation. The Commission can also adopt standards developed by other bodies.

Although the Commission has not yet made any standards, and states that it does not intend to duplicate existing processes, or change existing processes that are working effectively, it is anticipated that it will develop standards to cover any gaps it considers exist in the current framework.

Where the Commission considers that a health service provider has not complied with s20(1), it can:

  • advise the provider of the contravention and recommend ways for the provider to comply;
  • prepare a report about the contravention and give the report to the provider, an employer of the provider, a registration board, the Health Minister and/or a number of other bodies;
  • investigate the matter; or
  • refer the matter to another body.
New complaints model

The Act provides for two types of complaints: health quality complaints and health service complaints. Health quality complaints include complaints about the quality of a health service, contraventions of s20(1), and matters relating to the provision of more than one health service. A health quality complaint may be made by any person, including consumers and health service staff. Health service complaints are complaints by a consumer about a health service provider. 

The two types of complaints are managed in different ways. The Act provides that the Commission must deal with health quality complaints in a way that protects the public and improves the quality of health services. The Commission has discretion to deal with a health quality complaint in a number of ways, including monitoring the quality of a health service, or investigating the complaint or referring the complaint to another body, such as a registration board. 

Health service complaints are managed in such a way that promotes early resolution of the complaint. Where early resolution of a health service complaint is not achieved, the Commission must assess the complaint and either accept it or not. A complaint may not be accepted where, for example, the Commission considers it to be frivolous, vexatious, misconceived or lacking in substance. If the Commission accepts a health service complaint, it has discretion to deal with it in a number of ways, including conciliation, investigation or referral. In certain situations, the Commission must refer complaints to a registration board.

Implications for health service providers

While the Act imposes significant obligations on health service providers, the extent and content of these obligations are likely to become clearer when the Commission adopts or develops standards. Meanwhile, health providers will need to ensure they establish, maintain, implement and document processes to improve the quality of health services they provide. Health providers must also be aware of the Commission's broad powers with respect to dealing with complaints, and comply with the new complaints procedures under the Act.

The Community Service Operation funding pool

In brief: In June 2006, the Federal Government released its guidelines for pharmaceutical wholesalers and distributors wishing to participate in the Community Service Obligation funding pool. The $150 million per annum pool is part of the Government's broader plan to control Pharmaceutical Benefits Scheme expenditure, currently $6.8 billion per annum. Eligible distributors will be a party to a deed with the Commonwealth which requires them to continue to meet CSO compliance requirements and CSO service standards. Partner Sarah Matheson and Law Graduate Anna Howard report on what these changes mean to the pharmaceutical industry.


The stated purpose of the Community Service Obligation (the CSO) is 'to provide all Australians with ongoing, timely access, via their community pharmacy, to all Pharmaceutical Benefits Scheme (PBS) medicines'. 

CSO distributors will be eligible to receive payments from the funding pool if they commit to providing timely delivery of the full range of PBS medicines nationally, or within a particular state or territory. Under the scheme, $5 million per annum will be allocated to state-based CSO distributors and $144 million per annum to national CSO distributors.

A CSO distributor will be a party to a deed with the Commonwealth which requires them to continue to meet CSO compliance requirements and CSO service standards.

Compliance criteria

The CSO distributors must:

  • demonstrate capacity to enter into a deed as a single business entity (but this does not preclude single business entities from using other entities, such as subcontracters);
  • provide a single point for receiving orders and queries;
  • hold all necessary state and territory licences (and/or certificates) for their warehouses and distribution centres;
  • demonstrate compliance with the Code of Good Wholesaling Practice;
  • meet all storage requirement conditions; and
  • demonstrate established infrastructure and sufficient financial capacity to meet the CSO service standards.
CSO service standards

The CSO service standards are defined as:

  • the capacity and commitment to supply any volume of any brand of PBS medicine to any community pharmacy in their jurisdiction within 24 hours of request (with some exceptions) at, or below, the approved price (this includes a daily delivery service and the ability to supply to rural and remote pharmacies);
  • the capacity and commitment to supply any brand or low-volume PBS medicine;
  • maintaining specified stocks of PBS medicines, namely, at least one brand of every PBS medicine, and for multi-branded PBS medicines, at least one innovator brand and two benchmark priced brands; and
  • making available a daily delivery service to community pharmacies within distributor's CSO jurisdiction as part of their standard service delivery infrastructure.

Applicants who have not operated a full-line wholesale service for more than 12 months must demonstrate capacity and commitment to meet the requirements relating to low-volume PBS medicines and deliveries of PBS medicines to rural and remote pharmacies, within 12 months of commencing as a CSO distributor and will be closely monitored to ensure satisfactory progress is made.


Administration of the pool will be outsourced to a non-government entity. The administrator will:

  • assess payment claims;
  • ensure compliance of each CSO distributor with their compliance requirements and service standards; and
  • manage CSO distributor payment.

Payment of national CSO distributors will be proportionate to their PBS sales as compared to the total PBS sales of all national CSO distributors for the month.

Payment of state and territory CSO distributors will be based on a ratio for each state and territory that compares the volume of PBS medicines supplied by the CSO distributor in a state and territory to the total volume of PBS medicines supplied by all state and territory based distributors in Australia.

Applications for CSO distributors have closed for this year. The Government has not yet released the names of CSO Distributors for 2006-07.

The decision of Woodlands v Gilliott and the implied powers of the coroner

In brief: An emotional legal battle between parents over the appropriate disposal of the body of their deceased daughter recently came to the fore in a special leave application to the High Court. Lawyer Laura Colavizza reports on the decision of Woodlands v Gilliott [2006] VSCA 46.


On 4 February 2006, Lainie Woodlands was found dead in her Hepburn Springs home. The death was reported under the Coroners Act 1985 (the Act), and subject to an investigation by the coroner. Submissions were made by the parents of Ms Woodlands, Ms Gilliott and Mr Woodlands, as to whom the body should be released, and the appropriate location and mode of disposal of the body. Mr Woodlands requested the body be released to him for burial in New South Wales, while Ms Gilliott sought release of the body to her for burial in Hepburn Springs.

The coroner determined that the body should be released to Ms Gilliott, having regard to a range of factors, including that Ms Woodlands had ceased living with her father at the age of 15 (approximately five years earlier) and had resided with her mother and studied in the Hepburn Springs area since that time.

Mr Woodlands appealed to the Supreme Court of Victoria. Mr Woodlands did not seek to have reheard the issue of the location of burial or to whom the body should be released. However, Mr Woodlands sought (for the first time) to have heard the issue of the actual mode of disposal of the body. Mr Woodlands sought an order that the body be cremated and the ashes shared between the two parents.

The primary judge, dealing with a matter that was both urgent and distressing for all parties, made orders in accordance with Mr Woodlands' submissions. Ms Gilliott appealed the decision to the Court of Appeal.

Court of Appeal decision

The Court of Appeal considered the scope of the coroner's powers under the Act, and concluded that Mr Woodlands' application to the Supreme Court was wholly misconceived because it was based on the erroneous notion that the Supreme Court had jurisdiction to deal on the merits with the issue of cremation.

Section 19 of the Act provides that a coroner investigating a reportable death must establish, amongst other things, how the death occurred and the cause of death. While such an investigation is being conducted, the body of the deceased is within the control of the coroner until the coroner issues a certificate permitting the disposal of the body (s24). Section 23 of the Act provides: 

A coroner investigating a death must issue as soon as reasonably possible a certificate in the prescribed form permitting burial, cremation, disposal at sea or other disposal. 

The Court of Appeal noted that there was nothing in s23 which provides the coroner with the power to determine to whom a body should be released, or where the disposal of the body should take place. However, due to the need to render a certificate 'as soon as reasonably possible', the power to make such decisions was implicit in the practical operation of the section. The existence of such an implied power was held to be necessary for the effective discharge of the coroner's duties. 

The Court of Appeal also noted that there was no scope to seek administrative review of the merits of a decision of the coroner under s23 of the Act. Accordingly, a person aggrieved by the decision of the coroner would only be entitled to seek judicial review on an error of law under the Supreme Court Rules of Procedure.

In this case, there was no error of law before the primary judge. The judge merely substituted his own decision about the mode of disposal of the body for that of the coroner, effectively making a decision on the merits of the case. The Court of Appeal found that the primary judge had no jurisdiction to do so. If an error of law had been shown (and none had), the proper mode of dealing with the dispute would have been to remit the matter back to the coroner for consideration in accordance with the law. The court considered that, even if the matter fell within its original jurisdiction, it was unlikely to re litigate the very question the coroner had decided (within his statutory powers).

Mr Woodlands sought leave to appeal the Court of Appeal's decision to the High Court. The application for leave was refused.

  1. Queensland Health Systems Review Final Report (2005).

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