The blame game in health continues.

Some weeks ago Victorian hospitals announced bed closures, job losses and elective surgery delays because of a dispute with the Commonwealth Government over the hospital funding formula. In an election year the issue seems to have been temporarily resolved by the Commonwealth stomping up more money.

But it highlights the continuing malaise with divided. funding and operational responsibility for health care. The commonwealth has major responsibility for the Medical Benefits Scheme, the Pharmaceutical Benefits Scheme, Veterans Health and Aged care. The states run hospitals but depend on commonwealth funding to do so. Broadly, the commonwealth provides 43% of health funding in Australia, the state and local governments 26% and non-government, including individuals, 31%.
The divided  funding and responsibilities was described many times as a “dogs breakfast” by Tony Abbott when he was Minister for Health.
One important objective of a good health service must be to keep patients out of expensive and often forbidding large hospitals – a state responsibility. But the funding of health services to keep patients out of hospitals is largely in the commonwealth’s hands – particularly general practice and aged care. If all services were better organized in the community there would be much less pressure on the emergency departments of public hospitals.
Some improvements were made by the Rudd and Gillard Governments but most of it was muddling through. Kevin Rudd suggested a referendum for the commonwealth to take over state hospitals. Opinion polls suggested the public supported doing this, but Kevin Rudd backed down. My preferred option would be for the commonwealth to take over all healthcare from the states, but I canot see any prospect of this happening politically. The states remain poor but proud.  Neither can I see the commonwealth abandoning the field to the states.  That would be disastrous!
A practical compromise, which I proposed six years ago, would be to establish a Joint Commonwealth State Health Commission in any state where the commonwealth and the state could agree, with the commonwealth providing financial inducements for any state that would sign on. 
It is envisaged that the Joint Commission would have agreed governance arrangements with dispute resolution provisions. It would have joint funding from the commonwealth and the state and would be responsible for the planning of all health services in the state. The Joint Commission would buy health services from existing suppliers – commonwealth, state, local and private.
If a political agreement with one state is achieved I am confident we would see a big improvement in the cohesion and integration in health services in that state. Once the benefits in one state are secured the model could hopefully extended to other states.
Unfortunately, last year the commonwealth passed up an opportunity for long term reform in Tasmania.The Tasmanian hospitals were in a financial and operational mess.The commonwealth declined to use its financial leverage and handed out more money without  reform.
John Menadue



John Laurence Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

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1 Response to The blame game in health continues.

  1. margaret moir says:

    If it wasn’t for the GFC I think the achievements would have been much better but I think the opportunity has been lost. If the media was more interested in delivering honest detailed coverage of important issues there would be less division, confusion and anxst within the country and a rational debate could bring some resolutions and bipatisan commitments.

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