The Productivity Commission's landmark Quality Care report suggests that collaborative commissioning between LHNs and PHNs can significantly reduce preventable hospitalisations and ED presentations, but how?

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The Productivity Commission describes collaborative commissioning as organisations working in partnership to identify needs, design solutions, procure services and evaluate outcomes. It is a continuous cycle of planning, design and evaluation that responds to local needs while maintaining accountability for shared results.

The Commission’s landmark Quality Care report suggests that collaborative commissioning between Local Hospital Networks and Primary Health Networks can reduce potentially preventable hospitalisations by 5% and emergency department presentations by 4%, delivering $600 million in annual savings.

What remains is the practical question of how to deliver collaboration at scale, across every region of Australia.  The report highlights that “even when new collaborative models of care deliver positive outcomes, the current system does not support them to be scaled or sustained”.

The answer lies in infrastructure that already exists, is clinician-led, and is proven to work: HealthPathways.

The Collaborative Commissioning Imperative

Successful collaborative commissioning programs demonstrate what is possible.

The Health Alliance partnership between Metro North Health and Brisbane North PHN placed Complex Care Coordinators within GP practices, achieving reduced emergency department presentations and measurable savings.

The Aged Care Emergency Service in Hunter New England brought hospitals, the PHN and aged care providers together, reducing emergency presentations by 20% and hospital admissions by 21%. The Northern Sydney Collaborative Commissioning program achieved a 51% reduction in emergency presentations and unplanned admissions, saving $10.9 million in a single year.

These results represent real patients receiving better care, real clinicians working more effectively together, and real savings that can be reinvested into the system.

Why Current Approaches Fall Short

If the benefits of collaboration are so clear, why has progress remained limited?

The Productivity Commission identifies persistent barriers: the lack of formal joint governance architecture, misaligned incentives, rigid and short-term funding, capability constraints, and data and evaluation challenges. Collaboration occurs despite the system rather than because of it, relying on the motivation and goodwill of individuals. When those individuals move on, initiatives cease.

The Commission’s recommendations address these structural barriers through stronger joint governance arrangements, more flexible funding, dedicated outcomes-based funding, and supporting actions to enable data sharing and build organisational capability.

These reforms are essential.

Yet they leave a critical practical question unanswered: what is the operational mechanism through which LHNs, PHNs, Aboriginal Community Controlled Health Organisations and other partners actually collaborate on clinical care?  How do they support hundreds of thousands of clinicians across hospitals, primary care and aged care to adopt and respond to practice changes – safely and at scale Australia-wide?

Governance structures and funding arrangements create the conditions for collaboration. They do not, by themselves, change what happens in a consultation room, an emergency department or a discharge planning meeting. For collaboration to translate into better patient outcomes, clinicians across settings need shared agreements and a trusted, locally relevant source about how care should be delivered, who should deliver it, and how patients should move through the system.

HealthPathways: Collaboration Made Practical

HealthPathways provides precisely this operational mechanism. Developed in partnership between Primary Health Networks, Local Health Networks and other care services, HealthPathways translates national and international best practice into practical, locally relevant clinical guidance accessible at the point of care. Each pathway is co-authored by general practitioners, hospital specialists and other subject matter experts who agree on how conditions should be managed in their local health system.

This is not simply another clinical guideline repository. The process of developing pathways builds enduring relationships between primary care, public hospitals, private specialists and community providers.

These relationships create the foundation for broader integrated care initiatives. When GPs and hospital specialists have shared, trusted care pathways, they understand each other’s constraints, capabilities and expectations. That shared understanding translates directly into more trust, better referrals, smoother transitions and more appropriate care.

HealthPathways serves over 30 million people worldwide across more than 50 health systems in five countries. In Australia, it now encompasses Community HealthPathways for primary care clinicians and emerging Hospital HealthPathways for secondary care teams.

Hunter New England Health in Newcastle remains the only Australian jurisdiction to have fully implemented both, providing end-to-end digital pathway infrastructure that aligns decisions from general practice through to hospital care and back into the community.Where Hospital HealthPathways has been implemented, clinicians report that standardised pathways from admission to discharge are transformative. Emergency department length of stay has reduced for targeted patient groups. In a recent survey of 112 junior medical staff

• 99% use Hospital HealthPathways (HHP) to treat and manage patients;
• 99% said it increases their efficiency as a doctor (98% use it frequently to refer and manage patients;
• 100% agreed the HHP content and quality is high, and 97% said there is no equivalent alternative.

The reduction in unnecessary admissions, duplicate investigations and prescribing demonstrates the tangible productivity gains that clinical pathways deliver.

One of HealthPathways’ underappreciated strengths is its capacity to support rapid, iterative improvement. Unlike a pilot program that is locked in before evidence accumulates, HealthPathways can operate as a living system.

As clinicians and commissioners learn what is working, what needs strengthening and where a new initiative is shifting demand in unexpected ways, the relevant pathways can be updated effectively overnight, subject to governance. This is the Plan-Do-Study-Act cycle operating at system speed. It means that collaborative commissioning programs supported by HealthPathways are not experiments to be evaluated at the end of a funding cycle; they are continuously refined as learning emerges. For commissioners who need confidence that their investment will adapt as evidence grows, this iterative capacity is the foundation of a genuine learning health system.

Alignment with National Policy and Standards

Care pathways are considered mandatory in Australian healthcare. The National Safety and Quality Health Service Standards, implemented by the Australian Commission on Safety and Quality in Health Care, explicitly require health service organisations to provide clinicians with ready access to best-practice guidelines, integrated care pathways, clinical pathways and decision support tools. Action 1.27 of the Clinical Governance Standard makes this a core accreditation requirement.

Medical colleges and statewide clinical networks reinforce this expectation, promoting pathway-based approaches to ensure consistency, safe referrals and reduced unwarranted variation. The principle of pathway-driven care is well established.

What remains is to evolve from fragmented, locally stored or discipline-specific guidance towards a nationally integrated, digital system that is clinician-led, locally adaptable and transparently evaluated.

A strengthened HealthPathways model offers direct alignment with the Productivity Commission’s vision for collaborative commissioning by providing the clinical infrastructure through which joint governance arrangements become operational, flexible funding translates into improved care, outcomes-based funding can be meaningfully measured, and data sharing has practical application in clinical improvement.

Achievable, Affordable, Meaningful

The Productivity Commission estimates that dedicated funding of approximately $150 to $200 million per year would enable at least one ongoing collaborative commissioning program in each catchment across the country.

This is a modest investment relative to the $600 million in annual savings that effective collaboration can deliver.  However, a high functioning pathways program can support many more initiatives than the commission estimated – logically extending the benefits much further than anticipated.

A recent analysis suggests a conservative estimate of at least $9.76 of potential value for every $1 invested in HealthPathways.

Unlike major technology infrastructure projects that require years of implementation and carry significant delivery risk and cost, HealthPathways builds on existing capability.

Community HealthPathways already has wide coverage across Australia. The pathway to expansion lies in extending Hospital HealthPathways, strengthening integration between primary and secondary care pathways, and building the evaluation infrastructure to demonstrate impact.

The strategy for achieving this is clear.

First, establish federated governance that aligns national and state stewardship with local editorial authority and consumer engagement.

Second, secure stable, blended financing through multi-year agreements that pool Commonwealth, state and PHN contributions.

Third, build data-driven learning systems with common standards, secure data sharing and real-time analytics on pathway uptake, referral patterns, outcomes and equity.

Fourth, deepen digital integration by embedding pathway decision support into clinical software, telehealth platforms and virtual care hubs.

Fifth, invest in capacity building through national training, peer-review networks and clinical fellowship programs that expand the pool of skilled pathway editors.

From Pilots to System Transformation

The Productivity Commission identifies a persistent pattern in Australian healthcare reform: resources allocated to promising approaches tend to fund relatively small-scale trials with limited timeframes, while secure and stable long-term support for proven effective programs remains inadequate.

This describes the current state of HealthPathways. Widespread adoption has proven the concept, yet fragmented governance, sporadic funding and uneven digital integration hold the program back from delivering its full system-wide value.

Australia now stands at a pivotal moment. The National Health Reform Agreement provides the mechanism for embedding collaborative commissioning. The 2026 addendum offers an immediate opportunity to strengthen joint governance requirements. The subsequent addendum, expected in 2031, can incorporate dedicated outcomes-based funding.

HealthPathways can shift from a collection of regional programs to a coordinated engine for integrated, value-based care.

The evidence from Wales offers a useful international precedent.

The Welsh National Clinical Framework positioned clinical pathways as the foundation for service planning and delivery, with national standards for outcomes and interventions combined with local flexibility to reflect workforce and community needs.

Wales linked pathways directly to its quality and safety agenda, treating providers as quality management systems and investing in digital tools to embed consistent, safe practice.

This demonstrates how national frameworks can combine consistency with local ownership, and how pathways can operate at population, organisational and individual levels to connect care across settings.

The Path Forward

Decades of research show that roughly 60% of care aligns with evidence-based clinical guidelines, 30% is waste or low value, and 10% causes harm.

Care pathways lift the 60, shrink the 30 and reduce the 10. They make best practice easy, curb unnecessary treatment and variation, and give clinicians shared protocols that work in a busy consultation.

New evidence often takes a decade or more to reach routine care. Care pathways compress that timeline, transforming national guideline updates and local service changes into relevant guidance within days or weeks. In crises or during reform, this policy-to-practice bridge converts strategy into consistent clinical action.

As AI clinical assistants emerge, they will need a reliable, locally agreed source of truth. Pathways remain the critical content layer that AI can draw from. Far from being displaced by technology, HealthPathways becomes more essential as digital tools and mixed evidence proliferate, ensuring that automation is grounded in agreed clinical practice.

The Productivity Commission has set out the case for collaborative commissioning with clarity and rigour. The recommendations for governance reform, funding flexibility and outcomes-based accountability provide the structural foundations. What is needed now is the clinical infrastructure to make collaboration operational at every level of the health system.

HealthPathways can be that infrastructure. It is proven, affordable and ready to scale. It aligns with accreditation requirements, supports workforce capability and delivers measurable improvements in patient flow, clinical outcomes and system efficiency. Most importantly, it transforms the abstract goal of collaboration into the practical reality of clinicians across settings working from shared agreements about how to deliver the best possible care.

The question is not whether collaborative commissioning can work. The evidence is overwhelming that it can.

The question is whether we will invest in the infrastructure to make it work everywhere, for everyone, as standard practice.

HealthPathways can turn that future into reality.

This article was sponsored by Streamliners. Rhonda Morton is Director, Strategy and Partnerships, Streamliners Australia, and the principal consultant at New Evolution Consulting