Friday, November 28, 2008

Hospitals Need Reform Now.

The release of the much anticipated Garling Report may have been pushed off the front pages by the dramatic events overseas, but it is a matter of the greatest importance to the future of public hospitals in New South Wales. The 1100 page report delivers 139 recommendations, and begins with an observation which should not need to be made. Peter Garling writes: “A new culture needs to take root which sees the patient’s needs as the paramount central concern of the system and not the convenience of clinicians and administrators.” The mere fact that this needs to be said shows just how far off the rails the system has run.

Some of the recommendations seem at first glance to be counter-productive. In particular, the proposal to close down Emergency Departments at some hospitals so that resources can be concentrated at others could be seen as a retrograde step. I would have thought that Emergency Medicine should be part of the core business of every public hospital. Isn’t that what a hospital is there for? The same can be said for Maternity Services. Shouldn’t every hospital have the capacity to deliver babies, so that families don’t have to travel any further than necessary when a baby is on the way?

Of course, I am not the one who has visited 61 hospitals, read through 1200 written submissions and listened to 628 witnesses. Mr. Garling has, and he is in a position to have considered the matter thoroughly. His report also reflects the reality that there is a shortage of both doctors and nurses. Any Emergency Department can only operate effectively if it is adequately staffed, and with the shortage of medical professionals it might simply be impossible for every hospital to have a fully functioning Emergency Department. In that context, Mr. Garling’s recommendation may well be the most appropriate solution, at least until such time as more doctors and nurses can be trained.

The Garling report addresses not only the nuts and bolts of the Hospital System, but also the broader issues. Most notably, it addresses the culture of bullying which has been identified by previous investigations. Many of the problems emanate from the sheer pressure that exists to deliver an acceptable standard of service in an environment of limited resources and tight budgets. As the stress increases so does the likelihood of frustration and shortened tempers. In such an environment is it really any surprise that the report says bullying has become “endemic” in the system.

Mr. Garling has delivered a list of specific recommendations to address the shortcomings of our hospital system, and a timetable for them to be introduced. Now the ball is in the court of the New South Wales Minister for Health John Della Bosca, who has indicated that the government will formulate a response by March next year. The only trouble with that is that some of Mr. Garling’s reforms have been recommended to be implemented well before then.

As an initial response from government, that’s hardly encouraging.

Thursday, November 27, 2008

Some Things Should Not Be Left To Private Enterprise.

Up until the onset of the Global Financial Crisis, the champions of Economic Rationalism were winning the debate over the benefits of Private Enterprise involvement in almost every aspect of our economy. For many, there was no question that private enterprise is always more efficient, more productive and better equipped to deliver the services we depend upon. The related concept of “user pays” became a mantra which was supposed to ensure economic efficiency and better outcomes. However there was always an undercurrent of public opinion which held that there are some things which should not be left to private enterprise.

One of the results of the Global Financial Crisis is that a shift of opinion has occurred, with the growing realisation that “bottom line thinking” doesn’t always deliver the best outcomes. Economic Rationalism has made the system more important than the people it is supposed to serve. We can see the evidence for this in customers waiting in queues, either in person or on the phone, because it is more “efficient”. Efficient for whom? The system! Not the customer, who undoubtedly has much better things to do with his time than wait in queues. That’s just one minor example, but I’m sure you see what I mean.

Some areas which many people believe should never be left to private enterprise include the operation of public infrastructure, public transport, defence and national security, essential services such as power and water, health services and education. There are many other examples, but those are areas about which many people hold concerns. They are also all areas which to some extent or other have seen increased involvement of private enterprise. In many cases the debate about the value of private sector involvement will be ongoing, but when it comes to childcare it seems that very serious questions are now being asked in the wake of the ABC Learning corporate disaster.

There are now increasing calls for child care to be returned to the community non-profit and local government sectors. The argument against the corporatization of childcare is now gathering a great deal of momentum, and rightly so. Now that it has emerged that almost 400 ABC Centres are likely to close, it’s easy to see the impact on the community from the disruption to this essential service. It’s also a valid argument to point out that, as a society, we do not allow the corporatization of any other part of our education system to such an extent. The only things which come close are the rare private university, and some trades and professional training institutions. The big difference is that they are adult education, not child development. Neither do they have the same status as an essential service in a working economy.

While our private enterprise economy is and should remain the source of our prosperity, it remains the role of government to manage our community for the benefit of all its members. That should include appropriate management of our essential community infrastructure and services, especially when it comes to something as important as childcare, because our kids are more important than the bank balance of some corporate buccaneer.

Wednesday, November 26, 2008

No Recession… Yet.

Despite all the continuing doom and gloom around the world, Australia can still expect to weather the storm better than most. So we have been told by our government, our opposition, our business leaders, and our economic experts. We have also been told by the O.E.C.D. that while the rest of the world is slipping into recession, Australia will continue to experience economic growth at around 1.7%. That’s not quite as good as our own Treasury forecast of 2%, but still good news.

At the same time, the O.E.C.D. is still warning Australia of the risk of a further decline in house prices. Such declines have already hit the United States, Britain and Europe fairly hard, and there are reasons to believe similar falls could happen here. The most significant indicator in this regard is the ratio between average house prices and average incomes. Here in Australia, the relative price of housing is the fourth highest in the O.E.C.D.

This is a measure of the housing affordability crisis which until recently was receiving a great deal of attention. Now that the larger Global Financial Crisis is commanding most of the attention, housing affordability has receded a little from the spotlight but it still remains an unresolved issue for Australia. Where other countries have experienced relatively rapid falls in house values, other factors are at play to prevent that here in Australia.

Unlike the United States and Britain, Australia has a significant undersupply of housing along with continued growth in demand. While that is the case, prices will continue to be propped up by those conditions. It is more likely that prices will remain relatively flat for a protracted period while the rest of the economy, that is wages and prices, catch up to restore the balance. This is what all the experts are talking about when they mention a soft landing.

Of course, no crystal ball gazing can come with a guarantee. So far, all the experts have failed to correctly predict the onset of the financial crisis, the collapse of banks, the rout on the share market, that collapse of commodities prices, and the impact of global conditions on Australia. It’s always possible that they can be wrong again, and our soft landing could turn bumpy.

The key factor which will determine this is unemployment. While official forecasts are still predicting a relatively mild increase in unemployment, any increase will feed into the risk of recession. The higher the unemployment, the slower the economy will become, and the more people will default on their mortgages. If that spiral takes hold it will precipitate a more dramatic fall in house prices as mortgagee sales become more common, and the more likely a recession becomes.

Once again, it is crucial that our government remains prepared to step in to support the most vulnerable in our community, providing the twin benefit helping ordinary families at the same time as helping the economy. It’s also a good reason for the government to stop pretending that a budget deficit would be a bad thing.

Tuesday, November 25, 2008

DOCS Reform Must Include Adequate Resources

The much anticipated Wood report into child protection services in New South Wales has been delivered to the government, outlining a program of reform to relieve the overwhelming pressure on the Department of Community Services. This pressure is manifested by the sheer number of cases which are referred to DOCS each year, with last year’s total reaching more than 300 000. This has been, in part, the result of a mandatory reporting regime which has a very low threshold, resulting in a “better safe than sorry” approach which has resulted in even very minor cases being referred to DOCS. The trouble is that the avalanche of reports simply can’t be effectively addressed.

The report recommends that a new set of agencies and services should be set up to divert minor and non urgent cases, allowing DOCS to focus on the more serious cases more effectively. Instead of Police, for example, reporting every child they encounter, the Police Force would have its own dedicated child protection unit which would be the first port of call. This unit would then make the initial assessment, and subsequently refer the case on to DOCS if appropriate, but otherwise on to another service, most likely in the non-government sector. In the same way, other government bodies such as the Department of Education, and the Area Health Services would all have such internal agencies, acting as filters determining whether or not a case should be referred to DOCS. This process has been described as a form of triage for child protection, and effectively reassigns early intervention from DOCS to other agencies.

The report has also recommended that the management of foster care should be reassigned to the community sector. Together, these two structural changes should leave DOCS better able to concentrate on dealing with the more serious cases. However, there are some concerns. Firstly, while such a restructure would certainly relieve the pressure on DOCS, its success will depend on adequately resourcing the new agencies which would assume the triage and support roles. At the same time there is the risk that an enthusiastic bean counter might also cut the DOCS budget in the belief that they now have less to do.

Further, there is the question of communication. If responsibilities for child protection services are divided up among a number of agencies, there is the risk that the chains of communication could become stretched. In fact, there is already evidence that interdepartmental communication failures have contributed to child protection failures in the past. If there are more agencies involved, then that risk increases. Everything depends on the detail of how the reforms are implemented, and whether they are adequately resourced, and any such process must be done with a view to actually improving the lines of communication.

One thing is certain. Reform is needed, because the present arrangements are not functioning as well as they should. A great deal of effort has been put into producing the Wood report, and many hopes have been placed upon it. The question now is whether or not the New South Wales government is capable of delivering on its promises to fix the system, and that means ensuring that all agencies involved are given the resources they need.

Monday, November 24, 2008

A Matter Of Trust

It’s hard to believe that it has been a year already since the election of the Rudd Labor Government. It seems like just the other day, and there is still a “fresh and new” aura about the government, even though one third of the allotted term has now elapsed. So, after the first twelve months, how is the government faring? Has it lived up to expectations, or has it failed to deliver on its promise?

If the opinion polls are anything to judge by, the gloss of the new government is largely unblemished. In fact, by some measures Kevin Rudd is more popular now than he was a year ago. Some of this might have something to do with his apparent predilection for the big symbolic gesture. His first act after being sworn in was to ratify the Kyoto Protocol. The official apology to the stolen generation made a powerful statement. The 2020 summit was another grand gesture which could be seen as more an exercise in PR than in delivering actual policy outcomes.

But there must be more to it than that. After all, if all the government had to offer was symbolism the gloss would soon begin to wear thin. People would quickly see through the veneer to the truth that despite all the big talk, not much was actually being done. So how has the Prime Minister managed to not only maintain his popularity, but to improve on it?

Many of the big promises made by the government prior to being elected are either yet to be delivered or slowly moving through the pipeline of inquiries and reviews and committees which the government has initiated. It would not be unreasonable to be asking now “where is the education revolution?” and “when will public hospitals begin to turn around?” and even “how much longer before Work Choices is completely dismantled?” For whatever reason, the majority of voters are prepared to accept that these promises will not be delivered overnight.

Of course, the one big issue which has dominated the headlines in recent months has been the Global Financial Crisis. On this, the government has been acknowledged for its quick and decisive action in delivering a fiscal stimulus package. Amazingly, even when the unlimited bank deposit guarantee unleashed the damaging flight of capital out of unsecured investments resulting in retirees having their funds frozen, the Rudd government has been judged kindly by the electorate. It seems the public approves of the government’s handling of the matter sufficiently so as to forgive the occasional error of judgment.

I could be wrong, but I think the reason for this is that people generally have the impression that the Prime Minister is being straight with us and is telling us like it is. The government has kept the faith on the promised tax cuts in this year’s budget, and has so far adhered to its schedule for change to industrial relations, education and health. At this point the government still enjoys a level of trust which is unusual in politics.

It is for that reason that the government should be honest about the prospect of a budget deficit. A wide range of responsible economists and observers, along with the Reserve Bank Governor have all indicated that a deficit may be not only inevitable, but also a good thing. It is highly likely that there will be a need for more fiscal stimulation in the months ahead in order to keep the Australian economy moving. Should that prove to be the case the choice then will be to keep the budget in surplus and let the economy stall, or let the budget fall into deficit and keep the economy alive and thus provide some relief for ordinary Australians who would otherwise suffer the most.

Despite this, Wayne Swan and Kevin Rudd are still insisting that there is no need for a deficit. It might sound reassuring now, but the problem is that they stand a very good chance of having to eat humble pie next year. If that happens, it could well be enough to destroy the trust that they currently enjoy.