The National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011 establishes the Independent Hospital Pricing Authority by amending the National Health Reform Act 2011. This is another one of the bureaucracies being established as part of so-called health reform. This one is supposed to exist to promote improved efficiency in and access to hospital services by providing independent advice to Commonwealth, state and territory governments about the efficient cost of services and to develop and implement systems to support activity based funding for those services. It is supposed to formulate the national efficient price for healthcare services that are provided in public hospitals and funded on an activity basis. The authority will aim to deal with the vexed issue of cost-shifting between various jurisdictions and with cross-border disputes, and will seek to make decisions about block funding for hospitals that are too small, remote or otherwise unable to be funded on an activity basis. As I said, this is another bureaucracy in the Rudd-Gillard-Roxon so-called health reforms.
The National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011 amends the National Health Reform Act 2011 to establish this pricing authority. The bill provides for functions, powers, accountabilities and liabilities of the pricing authority as well as the establishment of committees and bodies to assist the authority. On 25 August, on the recommendation of the Selection of Bills Committee, this matter was referred to a Senate committee for inquiry and report by 15 September. This pricing authority is supposed to be the linchpin of the government's so-called health reforms and will operate alongside a raft of other bureaucracies, most notably the quality and safety commission and the national performance authority.
The impact of the pricing authority on the nation's hospitals remains very unclear. An interim pricing authority commenced operations on 1 September. In the additional comments report to the Senate Finance and Public Administration Committee's inquiry into this bill, we noted:
Coalition Senators do not oppose the recommendation of the report that this bill should be passed.
However, Coalition Senators strongly believe that the Government's so-called health reform package is more about creating the political illusion of health reform than any meaningful improvement or guarantees for patients.
This is a 'reform' that represents an enormous backdown by the Prime Minister and the Minister for Health and Ageing, who are absolutely desperate to create the impression of health reform. It establishes the third bureaucracy as part of this overall framework. Of course it comes with its own price tag: $100 million over the forward estimates; $31 million this year. There has already been legislation to establish the performance authority, which is supposed to monitor and publish reports on the performance of local hospital networks, public and private hospitals, primary healthcare organisations and other healthcare organisations providing health services.
The first new bureaucracy we saw was the Australian Commission on Safety and Quality in Health Care. We may yet find ourselves suffering authority fatigue. The new bureaucracies come before the major changes in health, which are not due to be implemented until 2014-15—very conveniently long after the next election is due. Let me take the Senate back to Mr Rudd's commitment to scrap funding of 60 per cent of hospital costs, which was watered down to the Commonwealth providing 50 per cent of growth funding, and of course this will not occur before 2017.
Let me not forget to put on the record again the bypassing of mental health and aged-care reform in all these changes. The Australian Labor Party only made mental healthcare announcements in the budget because it was shamed into doing so after the coalition released more detail of its commitment to reforming mental health with an additional $432 million and the $1.5 billion already outlined before the 2010 election. Aged care continues to be the subject of discussions and conversations following the myriad reviews. People are dying of old age while reform in the sector is still stalled. Activity based funding is due to take effect from 1 July 2012 but, as we heard at Senate estimates on 19 October, the intention of the bill may not be reflected in reality. Ms Halton told us on 19 October:
Block funding will have to apply in particularly smaller country hospitals and we need the pricing authority to provide a view about that.
It is of great concern that the Department of Health and Ageing does not have a definition of a small hospital—not surprising since in previous estimates we were told that COAG still cannot make up its mind as to the definition of a 'bed'. Mr Broadhead, the acting First Assistant Secretary of the Health Reform Transition Office, told us:
We do not have a fixed definition of 'small hospital'. From our point of view, the discussions that we have had—and these are not settled—are really about the volatility of activities in hospitals.
As he explained, the process by which it would be decided is for the pricing authority to come up with what it believes are the appropriate criteria for hospitals to be block funded. Then, of course, all this has to go to COAG and COAG will agree or not agree, as it happens. Then, whatever criteria are established, the pricing authority looks at the level of funding that should be provided to these hospitals.
Is this a ringing endorsement of the process and a confidence-inspiring statement that all is on track for a 1 July start date? Hardly. The success of any reform should be on the ground and at the coalface of our hospital system. On that basis, I share with the Senate the recent AMA Public Hospital Report Card 2011, which is the AMA's analysis of Australia's public hospital system. I highlight some of the key points: only 378 new public hospital beds were opened across Australia in 2009-10 and in the previous year only 44 beds were opened. Remember Mr Rudd and the grand plan for over 1,300 hospital beds? That is certainly another broken promise from the Australian Labor Party.
Let us look at median waiting times for elective surgery—they are continuing to deteriorate. In 2009-10 the median waiting time was 35 days compared to 27 days eight years ago in 2001-02. Information about the real waiting time and demand for elective surgery is still hidden. People waiting to see a specialist to be assessed for surgery are not counted in waiting list data and over one-third of emergency patients who should be seen within 30 minutes were not seen within the recommended time. The list of inadequacies goes on. In the end, what will all these new bureaucracies do? Thus far, they are certainly not producing against the important yardstick of reform—that is, more beds in our hospital system.
As part of the coalition's proposals, I foreshadow an amendment which goes to the constitution and membership of the Pricing Authority and, most importantly, the inclusion of a representative from public hospitals. This is so typical of the Australian Labor Party. Its views on private health insurance and its ideological objection to it are well known; its views on private hospitals are no different.
In the State of our Public Hospitals June 2010report, there are 756 public hospitals in Australia, with about 56,000 available beds. But we also have in Australia 561 private hospitals—that includes day surgery facilities—and these account for 43 per cent of the available beds. While there are 2.5 public hospital beds per thousand of population, there are 1.2 private hospital beds per thousand of population. So it is vitally important that legislation does contain representation from the non-government hospital sector. Not surprisingly, this was an omission by the government. I will return to the reasons for our amendments when we propose them.
It has taken almost four years in government; an 18-month independent inquiry into the health system; a prime ministerial listening tour of the nation's hospitals, complete with Minister Roxon and then Prime Minister Rudd parading in white coats daily at our hospitals for photo opportunities; several fraught COAG meetings; and one unsuccessful attempt for the federal Labor government to finally secure some form of deal with all the states and territories. As we heard during the Senate inquiry, there are considerable concerns about the possible duplication of effort following the creation of all these new authorities. Various submissions commented that there was no legislative requirement for the new authorities to cooperate with existing agencies so as to not simply duplicate existing work. While it may seem obvious that such cooperation is necessary and beneficial, the lack of a legislative direction in this regard is a concern.
Coalition senators believe that consideration should be given to an independent review of these agencies' and authorities' operations after their initial establishment and implementation. There are still plans for a national funding organisation with a national health fund administrator and, no doubt, more administration to distribute federal and state funding to hospital networks. This was going to be yet another independent authority that Minister Roxon and then Prime Minister Rudd said would ensure transparency about where every dollar came from and went to in relation to public hospitals. It was announced last year and then, surprisingly, on 17 June 2010—
The PRESIDENT: Order! It being 2:00 pm the debate is interrupted.
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(17:58): 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. |