Monday, July 27, 2009

Healing The Health System

The final report from the National Health And Hospitals Reform Commission has stopped short of recommending a complete Commonwealth takeover of public health. Instead it has identified specific areas where the Commonwealth should assume responsibility, such as outpatient services, while providing for a formula to contribute 40% of the cost of in hospital services on a fee for service basis. At the same time the report has left the door open for that figure to increase to 100% over time, so the complete takeover is still a possibility. Of course, the reality is that the Commonwealth does not need to take over 100% of the funding responsibility in order to take control.

The next stage of the process will be for the Commonwealth to consider the report, take public submissions, and go to the Council Of Australian Governments with a proposal for a reform program. There may be scope for negotiation with the states at that point, but the bottom line is that if the Commonwealth is going to be controlling even 40% of the funding for public hospitals on a fee for service basis, it will need to have a consistent national framework in place to administer the delivery of services. The states will have no choice but to come to an agreement, or face a full scale takeover anyway, because the Prime Minister has made it clear that failure to reach agreement will result in a referendum to give full control to the Commonwealth. Either way, the Commonwealth will be in the driver’s seat.

The Commission has also recommended increasing the Medicare levy to pay for a federal dental health scheme, called Denticare. As the name suggests, it would have some similarities to Medicare in the way it works. Although the proposal may be controversial, and already the opposition has indicated that it will not support any increase to the Medicare levy, it addresses an overwhelming shortcoming in the present arrangements for public dental health. In fact, public dental health services are close to non-existent in many parts of Australia, and this has been a serious problem for an embarrassingly long time.

Of course, the opposition is claiming that Kevin Rudd has broken his election promises on health. It’s true that the Prime Minister made bold and unequivocal statements about fixing public hospitals and ending the blame game. But the suggestion that Mr. Rudd has reneged on a promise to “fix public hospitals by mid 2009 or force a federal takeover” is simply misrepresenting what was promised. The promise was that if state governments did not improve health services themselves by mid 2009, then the federal government would begin a process to take over. Isn’t that exactly what has been happening? The Reform Commission has delivered its recommendations, and now the Commonwealth will seek to deliver those reforms through the appropriate mechanism of C.O.A.G.

The template which has been put forward today provides a framework to move towards a new funding model which places the Commonwealth at the head of the table, a new balance of state and federal responsibilities, and a new opportunity for productive co-operation to put an end to the blame shifting of the past. Now it’s up to the states to come to the table and form an agreement which delivers on all the promises to actually provide the health services Australia needs and deserves. Even if they don’t, the way is clear for a referendum to hand control over to the federal government. Either way, it amounts to the Commonwealth calling the shots, and if that’s not a takeover, Malcolm Turnbull was never a merchant banker.

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