Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Before question time, I was talking about the national funding body. Senators would remember that this is the body that first was in, then, when the ink was barely dry, was removed and now is back in the equation. It has gone from being out in deal mark 1 to being back in deal mark 4. Last year, on 17 June, on the ABC's AM program, it was reported that:

The Rudd Government has made a pre-emptive strike on one of its health reforms, even before the measure saw the light of day.

The Federal Government has been accused of axing a health funding watchdog, which was supposed to oversee payments to the states under its new health and hospital network.

… … …

A spokeswoman for the Minister says the decision to scrap the funding authority removes a layer of bureaucracy, and she says the Commonwealth's investments in health will be transparently reported in the Budget papers.

When questioned about this matter later, the Minister for Health and Ageing, Ms Roxon, told journalists:

… we've made it … clear we don't want to increase the size of the bureaucracy—it's not appropriate for us to establish an authority where there is not a need to do so.

In Labor's health reform mark 4—the deal of August this year—the funding body is back. It is under a different name, but it is back. All this is simply instructive as to how the Australian Labor Party has lurched from one so-called reform deal to the next: not really knowing where it was going or what it was doing, so long as it could be seen to be doing something. Mr Broadhead said at the recent Senate inquiry that 'under the agreement reached in early August there is a role for a national health fund administrator and the national health funding pool' and that these may be established by legislation later in the year. So it has worked out it does need them, but it needs them in a different iteration given that the states are back in control and it is business as usual. He further explained:

It is a very strong principle through the agreement that the aim here is to have the amount of funding, the source of funding, the destination of funding and the basis upon which the quantum was arrived at all publicly reported. This would mean that, to the extent that a state's contribution to activity-based funding for a particular local hospital network was less than or more than the national efficient price or the same as the national efficient price, it would be visible for people to see in the reporting that is required. That includes not only the reporting to parliament but also the public reporting that is required.

From a coalition's perspective, we consider that the millions of dollars to fund additions to bureaucracy would be better spent on frontline services. The Department of Health and Ageing already has 5,000 staff and former Rudd minister Lindsay Tanner said on 14 October 2009:

The indiscriminate creation of new bodies or failure to adapt old bodies as their circumstances change increases the risk of having inappropriate governance structures. This in turn jeopardises policy outcomes and poses financial risks to the taxpayer.

It is only the largest hospitals that will operate under an activity based model. Most of these so-called bureaucracies at the heart of the Australian Labor Party's health changes were due to start in July this year. Deadlines have been missed and pushed back, the health system continues to struggle and Tasmanian hospitals are broke. We have even had the Premier of Tasmania offering to the Commonwealth that it take back the hospitals in Tasmania. The Australian Workplace Ombudsman is seeking urgent court action against nurses closing hospital beds as part of their pay dispute. Yet this Australian Labor government would have us believe that it is in command of health and the efficient running of the health and hospital systems. Tell that to the parent wanting a doctor's appointment for their sick child. Tell that to the adult children of an elderly parent with dementia looking for a nursing home bed. Tell that to the people who cannot afford dental care who have to wait years for treatment. Tell that to the parents of a young adult with mental illness who cannot find treatment. Tell that to the health professionals who just want to get on and do their job of helping people.

The Minister for Health and Ageing, Ms Roxon, thinks everything will be fine by 1 July 2012 when the local hospital networks will be paid for the services they provide. Some of these local hospital networks do not even exist. But Ms Halton, the Secretary of the Department of Health and Ageing, assured us at the October estimates that they are being set up by the states and that the states are well underway with that. 'I have no reason to believe that they will not be up and moving in the time frame that was agreed,' Ms Halton said. We can only be inspired by her confidence as many health experts are dubious that the time frame can be met. With the Gillard government's track record, optimism on this reform may well be misplaced.

In the remaining time I have available to me, I will foreshadow the coalition's amendments, and I will speak in more detail in the committee stage. We are concerned about and will be moving an amendment in relation to the constitution and membership of the pricing authority. The bill provides for the formation of two committees to assist the pricing authority: first, a clinical advisory committee to advise on the formulation of casemix classifications for health care and other services provided by public hospitals; and, secondly, a jurisdictional advisory committee which will maintain a schedule of public hospitals and the services each provides and advise on funding models for hospitals and determined adjustments to the national efficient price to reflect variations in the cost of delivery of healthcare services. Our amendment goes to the fact that there is no representation or any recognition of non-government hospitals. This was one of the issues that was highlighted so vividly in the submission by Catholic Health Australia, and this is one of the major potential problems with this legislation. But, while the cost base for treatment in Catholic public hospitals is different from state public hospitals, there is no guarantee of representation for non-government hospitals on the pricing authority. I will deal more with those issues in the committee stage.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

The National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011 is all about bureaucracy. It is another Gillard bureaucracy—more Gillard-ALP red tape. It is quite unbelievable. Yet none of us should be surprised. This government's record on health reform would leave even the healthiest of Australians dazed and confused. This bill establishes the third new bureaucracy under Labor's health reform program—the third new bureaucracy. It relies on other aspects of that so-called reform, such as local hospital networks, to manage hospitals and be funded under activity based funding. Yet in some states these local hospital networks are still to be established. The idea is for the local hospital networks to work with Medicare Locals to jointly deliver health care. But Medicare Locals are still not in existence across the entire country. There are very few of them established at all. This is possibly because their role has not been clearly defined. Even stakeholders are questioning what exactly they will do.

Then there is the price tag. They come at a cost of some $400 million, which is a lot of money, especially for a government which says it is going to put itself back into a balanced budget situation by 2014. We were told Medicare Locals would be at the forefront of the Labor government's promise to end the blame game and fix hospitals. That promise was made by Kevin Rudd almost four years ago, but the Australian people are still waiting—

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senator Eggleston, I think you know the requirements in referring to people.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

I apologise. The promise was made by the then Prime Minister, Kevin Rudd, almost four years ago, but the Australian public, as I said, are still waiting to see the hospitals fixed. One might almost say: so much for promises of historic reforms under this government.

The Australian healthcare system has been pricked and prodded by this government, but the outcomes, the benefits for needy Australians, have been thin on the ground. Labor's achievements in the health sector, when one looks at them closely, are few and far between. On 1 November changes to the Medicare benefits schedule announced in the May budget took effect. Under this budget cut, changes have been made to the allied and mental health services available under the Better Access initiative for mental health. We saw the slashing of $580 million from a scheme that had delivered some 11 million mental health services to two million needy Australians. In this scheme the federal government had for once recognised the importance of dealing with the issue of mental illness by involving general practitioners, psychologists and nurse practitioners in the management of people with mental illness. However, the program was cut.

Earlier this year the government broke the longstanding convention on the listing of Pharmaceutical Benefits Scheme medicines when it rejected the recommendation of the independent arbiter, the Pharmaceutical Benefits Advisory Committee, to list some vital medicines concerned with the treatment of, among other things, cancer. It was a decision that undoubtedly caused many Australians sleepless nights, fearing they would have to pay a great deal more for their vital medications than they would under the Pharmaceutical Benefits Scheme and, perhaps most importantly of all, that they might not be able to access the latest and best forms of treatment either for themselves or for members of their families.

Prior to that, the government capped various services under the extended Medicare safety net, with cuts amounting to some $610 million. These included reductions to the in-vitro fertilisation and obstetrics services, which some people might feel are services which are not genuinely about people who are ill but something of a luxury, helping people who are unable to conceive have children. But to those people the cutting of the subsidies and the benefits for those services was very sad indeed. I am sure it caused a lot of heartache around this country among people who, as a couple, are infertile and who hoped that IVF services would help them have a family.

Then there are the cuts to pathology services and the cuts to incentives for GPs to provide after-hours services—more cuts and a diminished medical service to the Australian public. They are mostly at the GP level, which means that the ordinary members of the community are the ones most affected. Further, hanging over our health system is the threat of closing the Medicare chronic disease dental scheme, which has provided more than 11 million treatments to almost 800,000 Australians. This is a very important service because elderly Australians and those on social security often find they cannot afford to go to private dentists.

In addition, there is the threat of cutting rebates to those who hold private health insurance. The government is threatening to cut the taxation rebate which encourages people to take out private health insurance and which has meant that many more people have retained their private health insurance than might otherwise have done so as the cost went up. That in turn means that there would be greater pressure on public hospitals, increased waiting lists and more people finding that their medical treatment is delayed. So that is the real record of Labor's so-called healthcare reform agenda. It has been a record of cuts, diminished services and poorer outcomes for the Australian public.

The coalition supports the move to activity based funding for the nation's hospitals. We are very happy with that, but we oppose further layers of health bureaucracy. This bill establishes the third new bureaucracy under Labor's so-called national health reform program. The Independent Hospital Pricing Authority, which this bill is all about, comes at a cost of almost $100 million over the forward estimates. It follows the National Health Performance Authority, which followed the Australian Commission on Safety and Quality in Health Care. Yet to come, it is some form of national health funding organisation which was promised by Prime Minister Rudd, then discarded by Prime Minister Rudd, described as 'unnecessary bureaucracy' by Health Minister Roxon and then resurrected by Prime Minister Gillard. The government is slightly confused about what to do, it would seem. The policy is all over the place—creating organisations, discarding them and then resurrecting them. It is a very inconsistent record, and all of this has come at a cost of hundreds of millions of dollars, money which could in large part have been spent on front-line services and improving health care for members of the Australian public. These various authorities were originally proposed to be formed, in place and operating by July this year. Activity funding is now due to be established by the pricing authority by July 2012. Experts are warning that even that time frame is too tight and perhaps unachievable. So it is likely to be another example of Labor's inability to deliver a program and threatens more uncertainty for the hospital system. So we can have little confidence that this government will deliver, given their record of past performance across a whole range of policy areas, not only in the health area. Stakeholders, including the Healthcare and Hospitals Association and the AMA, have warned that providing additional data needed by this new authority could impose very heavy burdens on the health sector. The Healthcare and Hospitals Association also warns that, rather than drive any reforms, there is a serious risk the introduction of activity based funding will simply reinforce the old inefficient models of care. So, significant warnings have been sounded to the government that it needs to get this change right.

Through the formation of all of these new bureaucracies the coalition has consistently warned that they raise the possibility of duplicating each other's work and imposing ever-greater burdens on the health sector. The coalition continues to hold these reservations about the policies and programs of the Gillard government in the health sector.

Activity based funding was part of this government's promises to end the blame game in health, but stakeholders warn us that it will do no such thing. Even the Bills Digestfor this bill states that 'it is likely that debates about the adequacy of public hospital funding by each level of government will continue for some time.' And 'some time', in government terms, can mean it could be 10, 20 years or even longer before decisions are made and resolutions affirmed—so it does not augur well for the future of the Australian health system.

Another major concern is that the private sector has had very little input into these proposed changes, when in many cases the private sector is already funding health care on the basis of activity. The government should have drawn on the knowledge and expertise in the private sector, one would have thought; but that has not happened so far. But, hopefully, it could be that the new pricing authority will go to the private sector and seek advice. The authority also needs to take into account the varying nature of different parts of the hospital sector. There are significant differences between public and private hospitals, and not even all public hospitals operate in the same way.

Let us have a look at Catholic Health, which operates some 21 public hospitals around Australia—some of them large, some of them iconic, well-known public hospitals, like the St John of God system in Western Australia—but they operate in a very different way to those operated by the state governments and the public sector. The amendments put forward by the coalition seek to recognise and allow for greater understanding of these differences in the modus operandi of the management programs and the impact that will have on the decisions of the pricing authority. This is just another example of the muddle-headed approach of the Labor government to health care which, if implemented, will do nothing to improve service delivery to the Australian public, I am afraid. And so, once again, I think we are going to see health care in this country not being as good as it could be and Labor missing the opportunity to make a substantial difference.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

The National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011 represents a critical part of the government's national health reforms to improve the efficiency and transparency of the nation's public hospital system. All Australian states and territories have joined with the Commonwealth to implement a national system of activity based funding. This piece of legislation is designed to create the Independent Hospital Pricing Authority. The authority will determine the prices for hospital services across the country and also take into account factors such as safety and quality and the cost of services in regional hospitals. While most services will be provided through this system, block funding will be provided for some hospitals, particularly those in small regional communities. I will come back to that point.

The authority will have strong independence from all governments and will provide the health system with robust decision making, much like that the Reserve Bank provides to our financial system. In addition, the pricing authority will publish this and other information for the purpose of informing decision makers in relation to the funding of public hospitals.

The government have taken action to establish the interim pricing authority, which was part of our commitments under the health reform agreement. The interim authority has taken over the important activity based funding work from the Department of Health and Ageing, which will then transfer to the permanent authority after the passage of this legislation.

I thank senators for their contributions to the debate. I am pleased that the Senate committee has recommended the bill be passed and also that the opposition and the Greens have both said they will support the legislation. And nor should the opposition oppose this legislation, particularly since it implements reforms that have been supported on a number of occasions by the Leader of the Opposition. Of course, that has not stopped the opposition before, such as when they have opposed our other health reform bills in this chamber—in fact, one of those bills they opposed was to make permanent a critical safety and quality body that was created temporarily under the Leader of the Opposition himself.

Today in the Senate we have seen the usual criticising and sniping from the shadow minister for ageing and the opposition, rather than the promoting of any positive proposals of their own. They will continue to try and divert the public's attention away from health, desperate to avoid scrutiny of the Leader of the Opposition's inauspicious record as health minister. Specifically, Senator Fierravanti-Wells claimed that there was no clarity about which small hospitals would receive block funding. That is because under the National Health Reform Agreement it is a matter for the Independent Hospital Pricing Authority in consultation with jurisdictions to develop block funding criteria to be agreed by COAG. It is not a matter for decision by a Commonwealth bureaucrat or even by a Commonwealth minister but one to be resolved by independent experts and agreed by all jurisdictions.

I also note that the NHRA provides for loadings on the notional efficient price to reflect additional costs driven by regional location. Small rural hospitals will be protected as this agreement is implemented. The establishment of the Independent Hospital Pricing Authority is clear evidence of the government's ongoing drive to deliver for all Australians the best quality health care possible and to ensure the future sustainability of our health system. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.