Catallaxy Files

I have this op-ed piece in The Australian today on the Ruddster’s grand vision on Health and Hospital Reform, now essentially in tatters.  This government simply does not seem to understand the principles of federalism; the states are the big winners in this case.

ALL Australians know about the pub with no beer. But I’m not sure many of us expected the government-funded GP super-clinics would have no GPs.

The fate of some of these super-clinics, the location of which was chosen on political grounds without advice from the federal Department of Health, is emblematic of the feeble progress of the much-vaunted health and hospital reform package.

Who can forget those months when Dr Rudd and his trusted assistant Nurse Roxon tramped through the wards of public hospitals? Often dressed in those fetching blue scrubs, the pair would nod sympathetically at some patient trapped in a hospital bed and then announce a further detail of the “ending the blame game” health and hospital reform package.

Kevin Rudd initially had promised that the federal government would take over public hospitals if the states did not lift their games. There was even to be a referendum. In the light of day, it was clear this proposal would never fly; that was the clear advice from the federal Department of Health.

Never one to be deterred, Rudd set his sights on an alternative, with lots of moving parts, new agencies, GST clawbacks, additional funding and unrealistic promises. This was his vision that would assure his success in last year’s election.

With most state governments of the same political persuasion at that stage, a deal of sorts was done, save for Western Australia where Premier Colin Barnett was not for moving when it came to the GST part of the deal. Now that there has been a change of government in the two largest states, the enthusiasm for the agreement has fallen away even more.

So what is left of the deal? The GST clawback has been ditched. The states have agreed to the principle of hospital networks, but are calling the shots on the details. In Victoria, where networks already existed, it is business as usual.

The states remain firmly in their role as manager of public hospitals but are grateful for the extra money and are looking forward to more.

The agency being set up to monitor public hospitals has been watered down and deficient outcomes will be notified to the state government and hospital well before any information is made public. And there is every possibility the performance measures provided to the agency will be massaged and gamed. The end result is that there will be published measures but whether they will mean much is a moot point.

A maximum four-hour wait at emergency departments was a brave call by the Labor government. But here again, there have been modifications to the year in which the target will be met. Clinical advice is the excuse, which begs the question of why advice wasn’t sought earlier.

The most unrealisable promise made by our intrepid pair in blue was that public patients would have their operations undertaken in local private hospitals if the maximum waiting time for the procedure had been exceeded. On reflection, this was always fanciful and has now been dropped.

So what is left of the package? New bodies called Medicare Locals are being established. It is not quite clear what they will achieve, but soothing words about superior co-ordination of primary and allied health are being uttered. Their functions will take over the activities of the divisions of general practice as well as some additional tasks.

Casemix funding will apply to larger public hospitals, although smaller regional ones will be exempt. Even so, the vast bulk of hospital admissions will be funded on the basis of diagnostic related groups, with the prices set by a new federal agency.

Again, for a number of states – Victoria and South Australia, in particular – this does not represent a change, as casemix funding has applied to their public hospitals for some time.

In the meantime, lots of things won’t change; in particular, the way in which industrial relations is conducted in the health sector. If these hospital networks were ever to have any effect, it would have been necessary to provide them with the autonomy to hire workers on terms negotiated for that network.

In practice, the working conditions for health workers are set at a state level and there is therefore complete uniformity across the networks, save for some individual bonus arrangements paid to attract and retain health workers in short supply.

Take nurses; they are generally employed by the relevant state health department on identical terms and conditions, including prescriptions on the ratio of nurses to patients.

These prescriptions, in particular, lead to inefficient outcomes and loss of flexibility on the part of hospital managers to secure the least-cost and most effective way of treating patients.

The bottom line is the present version of the health and hospital reform plan does not add up to a hill of beans. The federal government fell into the trap of ignoring the principles of federalism, assuming it could foist its measures on the states by a combination of bribery and coercion.

All we are left with is much higher funding from the federal government, the states fully in control of public hospitals and a motley collection of cute sounding schemes, such as the GP super-clinics and Medicare locals, with little purpose.