Healthy Change From Gillard

Prime Minister Julia Gillard has announced proposed changes to the Health Funding agreement to be discussed, and possibly agreed, at the COAG meeting on Sunday.

The proposed changes include:

• Dropping the proposed loss of 30% of GST to the Federal Government. Ms Gillard referred to it as a "merry-go-round of GST money". It was to be used to raise the Federal Government's funding from 40% to 60% of health funding.
• the proposal for the Federal Government to fund 100% of out of hospital health services.
• direct funding of hospitals has gone. This is a good thing, I think. Direct funding by bodies under the control of a Prime Minister, Premier, or Minister removes some transparency, and allows for politically-driven funding. Think WorkChoices, where the independent Industrial relations Commission was disbanded, and a federal pay authority established under the effective control of former Prime Minister John Howard.
• The Federal Government will commit to funding 50% of future increases in health funding, subject to "performance targets" being met. This is less than the 60% under the previous model, and indicates to the states, especially those led by Liberal Party Premiers, that the cost of retaining control over all their GST is that the Federal Government will commit less.
• Funding will be paid by Federal & state governments to a new Health authority, to be independent of Federal & state government interference, similar to the Reserve Bank. This is a much improved policy to the direct funding model previously proposed by Kevin Rudd.

The changes are largely politically driven to gain the approval of states which have a Liberal Party Premier, including Barry O'Farrell who is expected to be NSW Premier after the 24-March election. Politics is, after all, the art of compromise.

Liberal Opposition Leader Tony Abbott has, predictably criticised the changes, calling them "the biggest backdown since the surrender of Singapore" (in WW2). Abbott has a history of criticising absolutely everything from the Federal Government, so his comments are no surprise.

It was disappointing that no journalist, not one, asked Abbott the following questions:

• Mr Abbott is this new proposed policy 'bad policy'? [Abbott would have effectively answered 'Yes']
• If it is such bad policy, why will 2 Liberal Premiers, and one Premier-in-waiting, agree to it?

Also disappointing was that no journalist asked Ms Gillard:

• Ms Gillard wasn't the direct funding model, proposed by former PM Kevin Rudd just bad policy, because it opens the possibility of future governments funding hospitals for their own political ends, and isn't it better that state governments be given a pool of funds to allocate to hospitals through their Health Departments? [this would have been awkward, because it would require criticism of Kevin Rudd's proposals, something she was at pains to try to avoid]
• GST revenue to states will fall during some future economic downturn. How will health funding be affected by future economic downturns, given that the states use GST money to partly fund health?

  John

Political Images

Image, Image Everywhere, an' Not a Policy to See. (with apologies to Samuel Taylor Coleridge; ... and the Ancient Mariner)

This week we have had 3 political 'debates': 2 in Australia, and one in the USA. One involved (Labor) Prime Minister Kevin Rudd and Opposition (Liberal) Leader Tony Abbott. They debated Health reform in Australia, with particular emphasis on improving our hospital system. Both were dressed well, wore significant makeup, and presented the political image they and their minders planned. By all reports, Kevin Rudd won the popularity contest, and the debate. He actually has a policy he wants to implement; the Opposition is still deciding if it has one, or wants one.

In NSW, The (Labor) Premier, Kristina Keneally and Opposition (Liberal) Leader, Barry O'Farrell, debated how good/bad/indifferent is the state, and why each of them should be elected as Premier in March 2011. By all reports, Barry O'Farrell won that debate. He will probably win the NSW election in 2011.

These two debates were really all about image, style, and scoring political points in a setting other than Parliament. After all, televised Question Time does the image of politicians no good at all. I have previously written about the disgrace that it is. Not for nothing is the NSW Parliament called "the bear pit"!

The third debate occurred in the US Congress and Senate, which ultimately passed a Medicaid Bill. Reports indicate it will assist up to an extra 3 million people gain the health care they need. As an Australian, I was astounded when, during Obama's Presidential campaign, there was at least 1 free health clinic organised in rural America - for farmers and their families who could not afford health insurance, but who desperately needed health care. The then US government had abandoned them. Republicans (mostly) are those who opposed the legislation - their view is that one must have money, or an employer, to pay for health care. Everyone else, it seems to the Republicans, can go hang! What a sad indictment on a political party.

Australia, of course, is not immune to poor health policy. We desperately need good policies for Indigenous health, dental care for many, improved aged care, better funding for hospitals, ... (the list goes on)

Politicians everywhere must forget image; they should instead go for the substance of good policy. And WE must tell them so.

John

Federal-State Health Funding

On Tuesday (25-Sep), a woman had a miscarriage in a public toilet at Royal North Shore Hospital in Sydney. On Wednesday, another lady contacted the media to say she had had a similar experience 2 years ago. Both had gone to the hospital, and been waiting for more than 1.5 hours. The experience of both could only be described as shattering.

Triage sets priorities for waiting patients. Those most at risk (chest pains, breathing difficulties) are treated sooner. The process relies on assessment, and on available nurses and doctors. Both are in short supply. RNS has vacancies for over 60 registered nurses, and an unknown number of doctors. It underwent a restructure last year - presumably to reduce costs.

Health is one of the "big 3" budget items in NSW (the others are educations and police), the proportion of the budget spent on each of them is increasing. Health now uses about 26% of NSW's budget. While many call for more funding, no one disputes the need.

How to properly fund the provision of State services is a much bigger issue. States cannot reasonably borrow to pay for recurrent expenditure. ie money spent each year in running the services, the same way that we cannot relentlessly borrow to pay for food and regular household bills.

Since the Hawke-Keating years, the % of GDP provided to the states has fallen. Under John Howard and Peter Costello is is at its lowest point - just 5% of GDP. Yet the costs borne by states has risen inexorably. If the states, and NSW in particular, cannot adequately fund the required levels of service using the money we pay in GST, there are only 2 options:

1. we pay more tax - eg by increasing GST from 10% to , say 12%, or more income tax to the Federal Government
2. the Federal Government releases more money to the states, possibly as tied grants for specific service areas.

John Howard has 3 fundamental objections to increasing Federal Government grants to the states:

1. He considers the budget surplus his, to be used for the benefit of the Liberal Party, and his re-election. Last election he splurged $6 billion in voter "sweeteners": we're paying higher interest rates partly because of that largess.
2. He has a fundamental objection to helping fund Labor governments to provide services. That doesn't help him.
3. He has a fundamental objection to public services: he would much rather spend Federal money helping private companies deliver the same services, because he retains a measure of control, and he can take "credit".

States need to be have increased funding to provide the services we "demand". That money must come from our taxes, either new, increased, or existing income tax. Perhaps we really do need to look at a new Federal-State funding model. We will need a different Federal Government to do it, though.

John