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Public hospital funding

CHAIR —I welcome the representatives from Barwon Health. The committee prefers all evidence to be heard in public but should you want to give any evidence in camera, you can ask to do so and the committee will give consideration to your request. We have before us your submission No. 37. Do you wish to make any alterations to the submission?

Mr Capp —No.

CHAIR —I will now ask you to make an opening statement and then field questions.

Mr Capp —Thank you very much, Senator Crowley. I thank the panel for fitting us into what must be a fairly tight schedule that you have had over the last few days. We note that there were not a lot of submissions from health care organisations such as ours. We wondered why that might be.

Senator CHRIS EVANS —That is the subject of a second inquiry!

Mr Capp —When I was preparing to come before you today, I began to realise why it might have been, as I re-read the submission and thought about what might be the subject of discussion. However, I think it is important that organisations like ours do contribute to such debates and that you hear a perspective from a relatively large, vertically integrated organisation such as Barwon Health—to put another perspective, if you will.

I will make a brief comment about Barwon Health. It was established only two years ago, in April 1998. It was certainly Victoria's largest voluntary amalgamation. I am not sure whether it is Australia's largest, but it is probably close to it. Most larger health organisations are enforced or legislated, as indeed the Melbourne health care networks have been. In Barwon Health, we decided that we wanted to pick up some of the points that were made by the Metropolitan Hospital Planning Board in their report to government some years ago which talked about integrated and coordinated systems of care, looking to be responsive to their local communities.

As five separate organisations, we went through a process of coming together into what is now Barwon Health. The Geelong Hospital, a 400-bed major teaching hospital of the University of Melbourne and, indeed, Deakin University now in nursing, is obviously a large part of Barwon Health. The Grace McKellar Centre is a rehabilitation and aged care facility with 445 beds, and is another major part of Barwon Health.

Those facilities, you would have to say, would be local icons of Geelong. Geelong Hospital has been in existence since 1852, so it is a major change for it to become part of another organisation. The thing that distinguishes ourselves from, I think, some other vertically integrated organisations, in Victoria anyway, is the integration with community health. Corio, Geelong and Surfcoast Community Health Services voluntarily joined us in walking into this sunset called Barwon Health. I suppose we should call it a new dawning rather than a sunset. So with five different organisations—

CHAIR —You could work out whether you were coming or going through the heads.

Senator CHRIS EVANS —It might be a Freudian slip.

Mr Capp —I think it was a brave move for boards of management of each of those organisations to decide to go ahead and I guess that underlines the fact that what we are interested in is moving forward in a coordinated integrated fashion to deliver better services for our community.

We are now about 3,300 staff. We have about $185 million worth of expenditure. We treat about 40,000 in-patients a year through the Geelong Hospital. We have a busy emergency service. We have some high-level specialist services particularly in radiation oncology, radiotherapy and cardiac services. We have a full range of medical surgical services, renal and obstetrics. We were one of the earlier integrated mental health service providers. We have a strong focus on community mental health teams and the whole mental health focus of the organisation is quite strong. We also have one of the largest surgical workloads in the state.

In summary, we would regard ourselves as being a good example of an integrated model of care and one that represents, I think, what the future of health care is going to be—and that is not standalone silos that deliver services independently of each other but rather more integrated services that do not have those artificial barriers that individual organisations create.

If I could just make a couple of other comments about elements of the submission, in relation to funding cuts. I think it is fair to say the last several years are not unique to Victoria. It is, I think, a national phenomenon but the last few years in Victoria have been very difficult in coping with the funding environment we have been in. Some recent data that I saw suggested that there has been a 14 per cent reduction in casemix payments if we measure that by the units of workload that we have in our casemix system since 1994-95. That is a reasonably significant reduction. At the same time, in our service we have had annualised growth rates of five per cent. Whilst the volume has increased, the volume of payment under the casemix system has increased to us to accord with that volume change, with that demand change. The price, of course, in our view has not kept up with that and so it creates ever increasing pressures on our ability to manage financially. Indeed, when the casemix system was established I think we had about five per cent of our total workload that was funded on variable rate only as opposed to the full fixed and variable rate. We now have in the order of 24 per cent of our funding on a variable rate and that in itself creates some pressures on our service.

Apart from price, we are obviously faced with other competing objectives. The classic case you would have heard about in your travels is the competing demands of emergency versus elective operating. In this state we have incentives to not have any delays in treatment in the emergency department and incentives not to cancel any elective operating.

CHAIR —Mr Capp, we have not had very much on just that, so if you had a couple of lines you want to put in there about the competition between the needs of emergency versus elective, we would be assisted.

Mr Capp —Yes, I am happy if Dr Gallichio wishes to do that. Would you like him to do that now?

Dr Gallichio —There is no doubt that there has been an escalation in emergency workload of approximately five to six per cent per annum over at least the last four to five years. A predominance of that is not only in emergency surgical work but also in medical admissions. By that I mean patients with a whole range of respiratory, cardiac and other associated medical conditions as opposed to procedural conditions.

Within a fixed number of beds that are available from time to time, that places enormous strain on our ability to continue with our elective surgical workload. I think the point Mr Capp was making is that, although our primary focus has to be the emergency and urgent area of patient care, we also have penalties or non-payment of bonuses, in that sense, in relation to our elective surgery workload that we have to meet. That becomes particularly focused during the winter months with the escalation of respiratory illness, especially where that affects the more elderly members of our community, and especially where, as we expect this winter, there is the potential for a major flu epidemic.

CHAIR —Thank you.

Mr Capp —In the context of having a capped amount of funding, the only area of discretion that we have is in the area of elective workload. Non-elective emergency, by definition, needs to come through the doors and be admitted, and the discretionary area is elective surgery. We have the non-payment of significant bonuses if we do not meet those targets, and that presents us with some challenges.

On the other matters of funding, the Australian Health Care Agreement funding that we have had in the last year or two has been welcomed by us as it has provided us with some certainty about funding. However, we are concerned that at the moment there seems to be some dispute about the indexation of that funding which is causing consequential effects. The consequential effects are being flagged as to what that might mean to us in our coming budgets. That is a concern to us. The other positive which I would like to comment upon is the proposed changes to the Pharmaceutical Benefits Scheme. They will allow organisations like ours to participate and are a positive move forward.

One of your particular terms of reference is looking at cost shifting. We could confidently say that in our organisation that has been minimal. If anything, when we have established new services we have tended to rely on Commonwealth funding through the Health Insurance Commission and Medicare. It is not a fact that we have privatised outpatients, as has happened in other organisations. A decision was taken some years ago not to do that. Those sorts of things have been tidied up pretty well over the last three years since the state received a hit from the Commonwealth of $70 million for cost shifting.

There are a number of systems now in the state that look at the VAC system, the ambulatory care system, which is a much more equitable way of funding outpatient services in this state which the state government has picked up, which we think is much fairer in its approach. We do have new services. For example, in pain management and hepatitis clinics, these services are unable to be funded under the existing funding formula so what we tend to do is work out how we can develop these services by using the revenues achievable through Medicare.

In relation to funding, if there is one issue that we would like to see addressed it is elimination of the silo funding or the program funding which really does tend to complicate the way in which we carry on our business. That is not just a Commonwealth phenomenon; it is probably, essentially, a state phenomenon as well. We have something like 64 different lines of funding just in our community health program alone that come through different channels of funding, whether that is through the Commonwealth, the state or through separate programs or special initiatives funding. Indeed, I am required to acquit things as low as $6,500 back to the government for a special funding arrangement that was given.

Senator CHRIS EVANS —What you are saying is that your share of that special program was $6,500?

Mr Capp —Yes. There is a whole range of bureaucratic processes to be gone through.

Senator CHRIS EVANS —It probably cost you $2,000 to acquit it, in management time and resources!

Mr Capp —Yes, if one were to cost that I suppose that is right; that is a sort of elastic time frame, isn't it? The funding silos are the sorts of things that we in Barwon Health are trying to eliminate internally as well. We have come from an aged care and rehabilitation sector; from an acute health sector, to a community health sector, to a mental health sector. We are trying to eliminate all those within our organisation—and we understand the difficulties associated with all of that—to provide a seamless service and seamless method of funding. At some time there is going to have to be some catch-up in the way in which organisations like ours are funded to enable some efficiencies to occur.

What we have, and what we have alluded to in our submission, are the opportunities in a place like Geelong, which has a catchment population of about 230,000 and a reasonably geographically identifiable area, one that lends itself to some piloting. We are having some discussions at the moment about how we might develop some programs in our area which perhaps enable some experimentation about funding of health services. I personally would like to see a system whereby we were able to be given some sort of capitation model of funding and asked to go about that, and then asked to report, in very precise terms, upon the outcomes of our funding. Our size, like our geography, lends itself to pursuing those sorts of options. Thank you, Senator.

CHAIR —We are pressed a bit for time and we would like to get the opportunity for questions. If there is something that you really want to put on the record at the end of the time, please feel free to ask and we will see if we can fit it in.

Senator LEES —I want to run through how you are structured. You have pooled all your state funding and Commonwealth funding into one pool. You then have a board, representative presumably of all the various parts of your new organisation, that then decides how to spend that money. But the inhibitor is that some of that money has actually got tags on it, that you are forced to spend in particular ways that for you, now you are joined together, may not be what you would like to spend it on or how you would like to allocate it. Is that right?

Mr Capp —In fact, I would have thought 99 per cent of it was tagged in that way. There is very little substitutability between one area and the other. I will give you an example. The area of subacute care and the area of acute care is a case in point, whereby if we were able to substitute some of the acute funds into the subacute areas, which would free up the activity in the acute area and enable us to do other things there, then that would be a very beneficial process. We have actually been successful in doing that this year in an informal sort of way. But you are right: if we had our druthers, if we had it as you have described, a total pooling of $185 billion, and we said, `What are the priorities that we have in allocating that?' then you would find that we may allocate it slightly differently from the ways in which they are streamed in to us.

Senator LEES —What do we need to do—set new goals and targets, set specific performance outcomes?

Mr Capp —Yes. Outcome measurement is something that other people can talk to better than I, but I think there are some particular areas that we could focus on that are very important. The national health priorities set up the six or seven areas that are actually very important in terms of the major risk factors in our community, and they are reasonably well developed in assessing current status and assessing change. It strikes me that if we are able to set some targets in those areas, that would be a very useful way to focus in on the most critical areas of health care that we have in our society.

Senator LEES —Just two quick questions because I note time is a problem. Who is not part of this? I take it that your GPs are outside this. Are there any other organisations in the Geelong region that are not part of it?

Mr Capp —The GPs are certainly one group we try and collaborate with very closely. In terms of government funded agencies, if I can restrict it to that, the Bellarine Peninsula Community Health Service, which is a provider further down around the Queenscliff, Point Lonsdale, Portarlington area—if you know that area—were one of the parties that worked together to develop Barwon Health. They chose, for their own reasons, not to be part of that. They are the only omission from it.

Senator LEES —Are there other aged care services?

Mr Capp —They do conduct some aged care services there. There are private aged care services, not-for-profits, in Geelong that are not part of us, but that would be pretty normal.

Senator LEES —Finally, just looking at evaluation, how are you actually evaluating the success or otherwise of this new structure?

Mr Capp —That is a good question, because just at the moment we are finalising our staffing questionnaire. One of the things we tried to do when we established Barwon Health was to use the staff's expertise and knowledge about how we might put all these things together. Our first method of evaluation is asking the staff to respond to how we have met their expectations and what we have achieved in that sense. The other very important thing which we are involved with is doing a community survey of the community's priorities and expectations about their public health care system. I do not believe such a survey has been done before in Australia. We have just completed the focus groups attached to that and we will have a major survey in July. Out of that we are getting a lot of data about what the community feels are the advantages, disadvantages of our organisation and, indeed, the broader health care system. That is a pretty important thing for us to do.

Senator CHRIS EVANS —I will be a bit provocative but it seems to me that really what you have said to us is that the advantages that should come from your amalgamation actually do not flow because of the way they are funded. I am playing the devil's advocate, if you like, to try and tease this out. Essentially, what you have said is that we have got all these coordinated services but the funding is still linked to each specific event in the system. I am not sure what you are saying to us is the advantage of the way you have organised yourselves, given that we have not changed the funding. I understand the logic, if you like, if we then move the funding to a pooled funding and set targets and outcomes. I am not sure what you are saying is the advantage. It is a bit like being half pregnant at the moment. You have made those sorts of changes but because you cannot allocate the funds as you would wish and prioritise and redirect, you do not actually get where you want to go.

Mr Capp —I am not going to continue the metaphor but I think that we have made some significant progress despite the funding processes that I have alluded to. I think either Jill or John could talk about some examples of where—

Senator CHRIS EVANS —I would be interested in those real examples.

Ms Linklater —Part of it is about the benefits of what we are trying to do at the patient level. For the patient, they can actually move through different levels of care much easier if we remove some of the organisational barriers in a more integrated organisation. But we, in an administrative way, still have to deal with the streams and the silos of funding that go into that. That causes an extra lot of work and a whole lot of other issues. What we are trying to do is try to remove some of that so that the patient can move through from acute care, subacute care, aged care, community services, and not have to be going from one different organisation to another. That is what we have been focusing on and that is what is happening. We are having to cope with the other funding mechanisms in the way that it is currently funded.

Senator CHRIS EVANS —Does that deliver your cost savings as you do that?

Ms Linklater —Probably not because of the funding streams. There are the administrative things that you have to go into to evaluate and to document and to send in reports to the different departments for different components of the funding. That still costs us in terms of how we manage that.

Dr Gallichio —There are a few examples in the clinical management structures that we have introduced. For example, rather than having separate structures for a dietetic service with chief dietitians and various departments, we have established a health service-wide dietetic service that can improve not only the communication lines between community health, aged care and the acute hospital but also between the health professionals who are looking after those patients.

Another example would be the extensive work over the first 12 months that Barwon Health went into in looking at the development of an integrated stroke management service. Although only a component of that has been established; the groundwork has been done. Subject to some additional funding, early intervention would greatly improve the management of patients with acute stroke and also provide a very structured and detailed rehabilitation process for those patients.

Senator CHRIS EVANS —Really what you are arguing for is an extension of the coordinated care trials to an area health model?

Mr Capp —I think that is essentially it in a nutshell.

Senator CHRIS EVANS —The problem you will face is that there will still be key players outside. The most obvious are the GPs and their linkages with the hospitals, which is the one of the major problems, particularly with the treatment of the aged.

Dr Gallichio —Even though the GPs are not part of the hospital in an administrative sense or funding sense, they certainly have an extremely loud voice in the way the hospital runs and are represented on virtually every clinical planning committee that we have going on at any time. We have a whole range of conjoint projects which allow clinical assistance and also training of GPs to occur in the health service.

Senator CHRIS EVANS —Your stuff about funding silos is obviously very relevant to our inquiry. You also mention the multipurpose service model for rural health services. Have you attempted that within your area? Because you have got a large public hospital is that not—

Mr Capp —It is not relevant to Barwon Health, but a multipurpose service is now looking like taking shape around the Lorne-Hesse (Winchelsea) area, which is part of our close catchment area, and I think we can see the benefits of that model already coming to play in that area.

Senator CHRIS EVANS —I want to ask you about the co-location. You make the point that there is no inherent cost difference necessarily between the private and public ownership, but I am interested in how the co-location proposal works. For instance, we have had evidence again today that, I think, 25 per cent of privately insured patients in Victoria are still accessing public hospitals for procedures. What is the situation with your co-location thing? Do you have special measures in place that, if you like, encourage, force or coerce people to use the private hospital if they have got private health insurance?

Mr Capp —As you know, Senator, that would be purely the patient's choice as to whether they took those options.

Senator CHRIS EVANS —I have never found patient choice to be a big determinant of the health system in Australia.

Mr Capp —You ought to come to Geelong then.

Senator CHRIS EVANS —There are usually big signs up telling you what to do.

CHAIR —What sorts of things do you do to steer patient choice?

Mr Capp —If I could put it in some context, the Geelong Hospital traditionally has had a very high percentage of private patients. I think it might have been in the order of 30 per cent only a few short years ago.

Senator CHRIS EVANS —Is that through an absence of private facilities?

Mr Capp —In part, but again it has been a part of the breadth of services that have been provided and I think a very strong local medical hospital benefits association that promoted private insurance. I would have to say that the arrangements were such that private care was more accessible than public care, even at a public hospital. In the last four years, that has been a matter of extraordinary attention on my part, and we have shifted that to quite the other extreme. We are now in a situation where, in order to provide I think better access for patients wanting to be public patients, we had to look at some broader options for private patients in Geelong in addition to that which is already there. That is where the co-located private hospital became relevant.

We went into an arrangement with Health Care of Australia. We have increased the number of private hospital beds by 120 in Geelong, thereby increasing the number of options available for patients who wanted to take up private care. People are given options. For example, in the emergency department if a person comes in with private health insurance, they have got the option of being transferred immediately across through the tunnel into the co-located hospital or remaining with the public system. Some take up that option and some do not. I think what we have been successful in doing is shifting the emphasis of our facilities onto what I believe they are there for—that is, the proper care of public patients. That has had an enormous impact on our ability to admit public patients, to reduce our waiting list and to increase the turnover of elective work.

Mr Linke —In terms of treatment of public patients, the co-located hospital has been very important. There have been many occasions over the last 18 months where, for patients that we have had difficulties admitting in an acceptable time frame, we have actually contracted with a co-located hospital to treat those patients.

Senator CHRIS EVANS —This is a fee-for-service arrangement?

Mr Linke —Yes. On many other occasions where we have been faced with cancelling major surgery, we have been able to buy intensive care beds from a co-located hospital and then bring the patients back as quickly as we can. It has been an arrangement where it has certainly assisted us in coping with peak workload pressures, and it has obviously been of assistance to them in smoothing out their workload. There are many other cases where we work to mutual advantage. They were able to access our specialised medical staff and also our specialised facilities.

Senator CHRIS EVANS —On a fee-for-service basis?

Mr Linke —Yes. We have approximately 18 to 20 pricing agreements for services that we have between us. It has certainly worked to our mutual advantage in a whole range of ways for us.

Senator TCHEN —Can I also play the devil's advocate on cost shifting, although probably of a different hue from you, Senator Evans. What you have done in Barwon Health in your experiments is develop a regime where you can actually cost shift as part of the actual internal management structure because you can shift costs from one area to another legitimately.

Mr Linke —We would regard the definition of cost shifting as something which was previously financed by the state and where we are also either moving out to the Commonwealth or accessing dual funding. That certainly has not been the case at Barwon Health. It is true, as Mr Capp said earlier, that we have commenced some services financed from Medicare where there were no other options. They are ambulatory services where we believe it was quite appropriate to access the Medicare system. It is true, until about three years ago, before the outpatient funding system which we call VAC was reformed by the state Department of Human Services, that some of our hospitals were accessing funding both from the state and from Medicare for the same services. However, those arrangements have been tightened up very substantially over the last three years and there were rigorous audit programs to make sure that we are not accessing dual funding. In my experience, the cost shifting issue is a much smaller issue than what it was and, in our case, I cannot remember any example where we have converted or continued to access dual funding. We would not regard that as cost shifting.

Senator TCHEN —I understand that, but you probably have less need of that because you have an integrated continuing care type of structure.

Mr Linke —Our reply goes back prior to Barwon Health, and I am reflecting on the Geelong Hospital here. I do not believe we have cost shifting. We certainly know of examples where that did happen more than three years ago, but I believe that that is now not a current issue of any substance.

Senator TCHEN —Yes, because of the change in administration. Certainly the model you have developed is very innovative. In fact, a lot of people have come to us and said they need to do things like this but they cannot see a way of doing it, but you have actually achieved it. Following on from that, you have almost a unique situation because in Geelong you have this infrastructure in place and you probably have a tradition of working fairly closely together already. Do you think your model can be applied to other places across the state, across the nation?

Mr Capp —There is currently a review of the Melbourne metropolitan network which I am involved with. It would not be appropriate for me to comment upon that in a direct sense. I think there has been enough said publicly about the model that we have. It is not totally unique. The Peninsula Health Care Network is looking at the same sorts of issues as we do, and I think this state government would see some benefit in trying to move the concepts that have been successful in both of our networks into more numerous networks throughout Melbourne.

Senator TCHEN —Thank you. On funding, you made some comments about how sustained the budget cuts are. Perhaps we cannot continue to look forward to that. But you also said the improvement potential system had bottomed out in the absence of a more fundamental structure and funding reform. In the current funding system, the Commonwealth is committed to increase not only on a per capita basis but also on an additional component of cost base. Do you consider that sort of funding model adequate for your needs, quite apart from the fact that more money is always better?

Mr Capp —You are right with that. When I made the comment about the Australian Health Care Agreements before, that was a serious comment that I think that sort of arrangement is a good arrangement for the states as long as it is complied with.

Senator TCHEN —Yes. I think that is about it, apart from again saying that I think you have come up with a very good model.

CHAIR —I have had the opportunity even to draw lines on your financial statement 1998-99. I am very interested on page 8 to see the list of government grants, which are fairly extensive. Are these are the little and big silos?

Mr Capp —Yes. That would be some of them, yes.

CHAIR —I would have to ask: how can I trust that you would be spending on all these things if the government did not require you to?

Mr Capp —I think that is where the performance management in the identification of outcomes and key performance indicators are relevant. I think what we need to be able to do is to get clever about how we identify what those key measures are that satisfy you and that do not occupy excessive amounts of time in compliance costs. I think it would be pretty simple, in some of these areas, to ask the questions, define the measure and ask us to report upon that. I think there are ways of doing it without necessarily all the other processes of the discrete funding and acquittals and so on.

CHAIR —I have grown up in the Commonwealth sector where we have been regularly abused for sending specific purpose payments to the states which are then not free to use them as they wish—though I understand that SPPs are almost a thing of the past, any day now. What price the GST? The state department has exercised effectively SPPs or little silos out to your area. You cannot spend some of that money on other than mobile podiatry, a nurse back care program or whatever. How far is your argument going with the state to allow some of that money to come across non-specified so that you can continue to do these things but have a bit of flexibility at the margin, which I presume is all you want?

Mr Capp —One of the terms of reference for the review of Melbourne metropolitan networks is to look at areas of bureaucracy and areas that can be improved upon and become more efficient. I think it would be fair to say that there are a number of people, including me, that would make submissions about this into that sort of forum.

CHAIR —I am going to be a devil's advocate now on behalf of Mr and Mrs Average out there in the community. I have been trying for six years to get an artificial limb program. It is just as well the states are making you pay for it for me. Is that not the case? I suppose I am trying to say that he community sometimes has to fight and kick and scream to get a bit of money designated for their specific problem. I think you said earlier that quite often the community are ahead of the game. They are providing the clues to where the next lot of care is needed. Do you have to fight on the community's behalf with the state or is their fight with you?

Mr Capp —That is a good question. I think one of the reasons for the research we are doing at the moment is to try to identify what those priorities are and set aside issues of priority—meaning rationing and all those sorts of things. If you put the envelope over it even bigger and say, `What are the services currently not there that you need?' I think that it is incumbent upon us to represent that view and to try and integrate that into the total funding system. I think it is part of being a community based health care organisation.

Senator CHRIS EVANS —Do you get the Commonwealth grants then to administer in the same way the various doctor retention programs or other initiatives? Do they come direct to you or through the state?

Mr Linke —They are a combination of both. Some of our Commonwealth program grants come via the state and form part of what we call our health services agreement with the state Department of Human Services. There are others where we deal directly with the Commonwealth government. In some cases there are programs that are very similar—I think carer respite would be one that comes to mind, for example. There is a federally funded carer respite program and a state funded carer respite program. So it is a mixture.

Senator CHRIS EVANS —So you would get a bucket of money from the state government for carer respite and a bucket of money from the Commonwealth with particular tied principles with each of those.

Mr Linke —Yes. Also, the way the contracts and the terms of some of the federal money is administered is inconsistent. Quite often we are operating with uncertainty. We are into the end of a three-year agreement and do not know whether it is going to be renewed and there are staff employed. Often the arrangements as to how the Commonwealth government contracted services are administered, in our view, leave a little bit to be desired.

Senator CHRIS EVANS —But conceivably, Geelong may not have a carer respite problem—I am only using it as an example—but the carer respite problem may well be in the outer suburbs of Melbourne. You get your share of the money and you have got to use it for that even if carer respite is not one of your pressing concerns. That is part of the flaw in the way it works, is it?

Mr Capp —Yes, but the biggest flaw is actually deciding that we need this multiplicity of programs rather than having an appropriate system that cares for people in a broad range of areas. If I could just give you an example—

Senator CHRIS EVANS —How would we be reassured that if we did that that you were looking after carer respite programs—I think that is where Senator Crowley was going—given that the community had applied pressure and the Commonwealth and state governments had recognised it. Just say that Barwon Health is a bit insensitive to carer respite needs because you are wanting to build a new silo or some other purpose. That is the key question then for us: how do we know that you will meet those needs?

Mr Capp —We think that gets down to the defining of what the key performance indicators are for you. Part of that may well be consumer satisfaction surveys, understanding what, in fact, the community really does think about these sorts of issues.

CHAIR —They are not really going to hop a train to Melbourne though if they are really annoyed with you, are they? They are a bit stuck down there in Geelong.

Mr Capp —Because they cannot get out of the house?

CHAIR —The likelihood of a person from Geelong going to the city, to Melbourne, to get the service that you are not providing them is not terribly likely. It depends, I suppose, but they are more likely to stay in Geelong and grumble.

Mr Capp —But, Senator, if the ask is for us to provide carer respite then that is a different thing to having a specific line of funding that requires specific accountability and specific signing off for X, Y and Z. I think they are two different issues. I think you can ask us to do those things quite reasonably and we can respond and give an indication of how we have done it rather than going through all of the other lines of bureaucracy.

CHAIR —I find this extremely useful. Very rarely have we actually been able to open a piece of paper or find operating Commonwealth ordinary grants or operating grants. The whole dog's breakfast is written down here for us and we appreciate that, thank you very much. You call it silos; I have just called it dog's breakfast, but I think we read each other loud and clear.

Mr Linke —There are many subgrant lines within each of those headings so what you see there is a summarised listing of our grants and, in some cases, they would have three and four subgroups within those.

Senator CHRIS EVANS —We really would appreciate it if you could provide that to the committee because I think part of this thing is actually coming to terms with what happens on the ground. We all support the carer respite program because it is a good thing but what we are trying to grapple with is, partly, how then that gets implemented and whether it gets implemented successfully. So we would actually appreciate a representation of that in all its detail. It would be a useful tool for us.

Mr Capp —We would be very happy to do that.

Dr Gallichio —The issue of accountability that you have raised in terms of the use of funds is a very interesting one and obviously very important in terms of fiscal responsibility. In terms of the responsiveness to the community, the clinicians who look after the patients that come through the health service at all levels—nursing, medical, allied health, et cetera—the local political representation and, dare I say it, even patients and their carers and partners themselves provide the feedback we need that allows us to structure our services as well. So I think, yes, the strings attached to those funding programs can be extremely tight but we need to be aware also that those pressures on the organisation come from a whole range of directions, not purely from funding.

CHAIR —I do not know whether I can ask the question—it is a mess in my head—but it seems to me that if you did not have this kind of line itemising of a number of the programs you would probably have to create it. So I am not sure to what extent the accountability that is there is all nuisance or whether, to some extent, it is very beneficial.

Mr Capp —When we prepare the documentation that Senator Evans asked for, I think you will get a better understanding. When you look at the dimensions of the dollars and the requirements, it puts it in a different perspective.

Senator CHRIS EVANS —But your point is not just that you have to have your statement of how you have accounted for the money, it is the question of what you then have to do in terms of proving up—

Senator LEES —Are you going to be able to give us both—the list of the grants and then what you are supposed to have done with it all?

Mr Capp —Yes, we can give you quite detailed information on that.

Senator LEES —Thank you.

CHAIR —We are trying to find an illustration of a case in point. It is a very important point to us because much of this debate is that the Commonwealth said, `We gave you 20 per cent more,' and states said, `No, you didn't, we gave more.' It is a Commonwealth-state brawl out there. In the meantime, Mr and Mrs Average in the community are bored, and that is a nice way of saying what they feel about it. They are much more concerned about why they can't get Aunty Maisie into a nursing home or get some home care assistance. So we have got what happens to that money when it is filtered down and we will have to pursue the steps it goes through to get filtered. We know some of it comes direct from the Commonwealth, some of it goes to the state government which goes to an area health board which goes to the Barwon whatnot; some goes directly from the states to you; some goes through another filtering system. Maybe we have the perfect system, with brakes and checks built in, or maybe we have room for more efficiencies.

Can you also provide for us how much your donations and bequests amount to? I have been checking through who I know who has given—and I will be speaking to a few people to find out why their name is not on this list! Do not tell me now, but how much does it add up to? We had a very interesting piece of information from another state. They are actually thinking of amalgamating area health boards, but they have large community support fundraising attachments to different hospitals and if they amalgamated them all into one fund or one area, people would cease barracking for their own hospital in the way they did.

Mr Capp —This was one of the challenges we had when we were created. When I talk about the Grace McKellar Centre and the Geelong Hospital being icons of Geelong, they are icons in more ways than one. One is that they are very big recipients of the community's philanthropy. Not only that—we also have volunteer groups, we have people who are the lifeblood of our organisations who were worried that, when we created Barwon Health, all that would just dissipate and we would have this huge new bureaucracy that was nearly government—and we know what that means. There were a lot of fears about that. We had to very aggressively protect not only the volunteer groups but also any donations, so we have very strict protocols in terms of specific purpose donations and protecting them to areas. That seems to have worked.

Senator CHRIS EVANS —The WA government learned that lesson very recently when they wanted to privatise the Armadale Hospital. They were going well until the bloke who organised the chook raffles that bought the land came out, and then they started losing the argument. The community had paid for that by running chook raffles and fetes. They said, `Hang on, it is not the government's hospital, it is our hospital.'

Senator TCHEN —Mr Capp, can I ask you and your colleagues, when you provide the information to us, to also draw on your experience to give us some descriptions of what indicators you think could be workable? I understand your idea is that the money should come in from different sources, but you are accountable to various indicators.

Mr Capp —Okay. We can do that in a particular area, perhaps, as an example.

Senator TCHEN —Thank you.

CHAIR —I can see what you mean in terms of messiness. I also think it has some distinct virtues. I would be interested in your comment about that. I would also like to say that I find it fascinating to see listed the legislative changes for the year that affect you. I want to give you a big tick, on the record, and also for the research and awards. I might find later that this is a snow job from hell, that none of us know what we are talking about, but I do not believe that at all.

Presumably, these research awards and grants are things that have been done by the people involved, either in the community or through the hospital. It is fantastic. I think it is extremely comprehensive—the impact of the legislation as it affects you. If I were Mr and Mrs Average in the Barwon area, I could look at this and say, `I want to know what they have done for dentist fees, fire brigade or fund raising,' or whatever. There is a possibility that I might find it listed here. I think it is extremely helpful having regard to the real world data that this committee, I believe, must look at, as well as the top end of town. I have two very quick questions. The first relates to the non-payment of bonuses. Dr Gallichio, I think you used that expression. What does that mean?

Dr Gallichio —With respect to the performance indicators that we have, we raised as examples emergency department performance indicators—in other words, triage categories 1 to 5 in terms of waiting time from the most urgent to the least urgent. Parameters are set by the Victorian Department of Human Services that we have to meet. Bonus payments are made on our ability to reach those—

CHAIR —From whom?

Dr Gallichio —From the Department of Human Services.

CHAIR —If you can send in your annual tick-off that you actually came in under whatever—

Dr Gallichio —Yes, we can.

CHAIR —then you will get a special allocation from the government.

Dr Gallichio —That is correct. If you do not reach those targets, you do not receive the bonuses.

CHAIR —How big are the bonuses? Perhaps we can ask you to put that on notice.

Mr Capp —Yes.

CHAIR —Thank you. The other thing I thought you referred to, Mr Capp, was something like $70 million from the Commonwealth as part of a cost shifting adjustment. When? Again, would you like to take it on notice?

Mr Capp —Yes. I think it was within the last five years.

CHAIR —That was paid by the Commonwealth to Victoria?

Mr Capp —The other way. It was an adjustment to the Medicare payments for that particular year to compensate the Commonwealth for alleged cost shifting that had occurred in the states.

Senator LEES —People are still arguing about whether it was identified, and if it was identified, what it was and where it was. The battle still goes on.

CHAIR —And the Victorian government paid $70 million?

Senator CHRIS EVANS —They lost it—

Senator LEES —It was docked off their—

Mr Capp —We did not quite get it in the first place.

CHAIR —We are running a bit over time, but many thanks indeed for a very useful contribution.

[2.36 p.m.]