Mr McDOUGALL (5:31 PM) —The great wonder of our health system is that it does work. Throughout this nation, millions of Australians receive medical care of the highest standard every day. Millions more benefit and will benefit in the future from the ongoing study and advances in medical health and technology. Our medical professionals are amongst the finest in the world. In fact, our medical and hospital standards are the envy of so many other countries.

I have nothing but praise for the medical professionals at hospitals such as Greenslopes Private Hospital, which is used by so many of the electors in my electorate. In fact, the health system seems to run remarkably well in Queensland, which is due in no small part to the dedication of the health professionals in my electorate who work at those hospitals and clinics. Yet all will agree there are glitches—serious glitches—which need to be resolved if we are to continue to maintain this system which ensures free medical treatment for all Australians.

This Health Legislation Amendment (Health Care Agreements) Bill 1998 addresses several of the major flaws which lie in the agreements between the Commonwealth and the states and territories, particularly in the area which affects every taxpayer, every Australian who contributes their hard earned dollars to our free health system.

The government has been aware that there has been an alarming increase by the states of double dipping on those taxpayer funds. This is simply a case of taking the Commonwealth funds, which have just been increased from $26 billion to $30 billion, and charging yet again for services which have already been paid for by the Commonwealth. This is called cost shifting, but that is just a nice safe bur-

eaucratic phrase for charging the taxpayer twice for the same service.

My concern is for the people in my electorate of Griffith. Each and every one of them is affected by inefficiencies in the system, no matter where they occur in Australia. It was not hard for me to find examples of this. I wish to draw the attention of the House to some of those examples which take place in Victoria.

Victoria is a state that was sent to the financial wall first by Labor's Cain government and then it was finished off by the Socialist Left led government of Mrs Kirner. With no money left, not even in the State Bank, the people of Victoria had no choice but to dismiss Labor before the entire state was sold off to the lowest bidder. The current Premier hit every ratepayer with an annual levy and set about dragging the bankrupt state back into the black. On the one hand, he is to be congratulated for achieving the success he has but, on the other, one questions his call on the Commonwealth for even more health dollars when Victoria is a master at the art of cost shifting taxpayers' health funds.

Not only does this state government double charge the nation's taxpayers for many medical services but it has reduced funding to its health facilities by 18 per cent. In the meantime, the Commonwealth government has increased health funding to Victoria by 19 per cent. Madam Deputy Speaker, I seek leave to have incorporated in Hansard these figures and also a graph which compares the cumulative increase in funding of hospital services by the state of Victoria over the period of the current Medicare agreements with that of the Commonwealth.

Leave granted.

The documents read as follows—

State Source: Data provided by the CGC, compiled on the same basis as 2% Review (1996) Attachment 4.3 States' Own Expenditure for Hospital Services (CGC Data).

Commonwealth Source: 2% Review (1996) Attachment 4.1 Commonwealth Outlays on Health and General Revenue Assistance

Mr McDOUGALL —As you will see by this graph, Victoria has dramatically decreased its level of funding to health, by 18 per cent, to lower than it was in 1992-93. This decrease was a direct reaction to the Commonwealth's substantial increase in the level of base funding from the previous 1988 to 1993 Medicare agreements of a real 13 per cent. The effect of this has been dramatic. In 1993-94, the last year of the current Medicare agreements, Victoria achieved a cost per casemix adjustment separation approximately one per cent lower than the national average. But by 1995-96 this had decreased further to almost 11 per cent lower than the national average. Their answer to this is to demand that the Commonwealth supply more and more funds.

But do they spend them well and wisely? Not according to evidence I have before me of cost shifting in almost every aspect of health care spread across the entire state. According to the Victorian health minister, Victoria does not sneak extra funds from the nation's taxpayers, and that includes the constituents of my electorate.

Here are a few examples of taking the Commonwealth's funds with one hand and then sending patients out to bill the Commonwealth yet again with the other. The Royal Melbourne Hospital quite blatantly instructs doctors to refer outpatients to GPs for prescriptions. The hospital even generated an internal memo to that effect. This same hospital also issued instructions to psychiatrists to issue prescriptions for public mental health patients, in particular for olanzapine and risperidone. These are only two of the examples of Victorian health officials shifting services from the public hospitals that they fund onto the Medicare and pharmaceutical benefits payments that the Commonwealth funds. In the meantime, the Victorian Office of Corrections charges the Commonwealth, via the Medicare benefits schedule, for urine tests and related pathology for prisoners.

At Bacchus Marsh, a hospital which services the large regional area of north-west Melbourne, the pattern is to reclassify patients from same day in-patients to private outpatients with all the associated Medicare benefits schedule charges. The list goes on.

Take Geelong, the large regional centre south of Melbourne. Here it is common for outpatients to be referred to GPs for prescriptions. Cost shifting has been officially recorded at Geelong in a memo from the Medical Services Director, who instructed medical staff to reclassify patients who require the drug taxol to private status so they are billed for medical services at 75 per cent of the schedule fee. Taxol is then charged to the Commonwealth's pharmaceutical benefits program. These all look minor, but they add up to millions of dollars nationwide.

Bulk-billing has become a quick and efficient way to charge the nation's taxpayers for medical services, even when those services are designated to be paid from funds already paid to the states. This is done publicly, despite claims by the Victorian health minister that it does not happen. The Appollo Bay and District Memorial Hospital, for example, is known to be unwilling to employ doctors without provider numbers. The obvious reason is that, without provider numbers, they are unable to bulk-bill for outpatient services. In Leongatha, the billing of outpatient services is carried out in the name of the Leongatha Medical Group—a public hospital by another name.

The flicking of public outpatients into the Commonwealth Medicare benefits schedule is so common in Victoria that it has been the subject of the ABC's 7.30 Report. This program revealed that at Korumburra bulk-billing is regularly carried out for outpatients and accident and emergency services. A media report also showed that the same thing is happening at Rosebud. Melbourne's large Austin Hospital has been reported as privatising outpatient services which result in referrals to GPs, who in turn bill Medicare.

It is patently obvious that some of the states are trying to erode Medicare. Premier Kennett has made it quite clear that it is his agenda. Last week on radio station 3AW he said:

If I had my way at the moment, I would say to the people of Australia, we are going to abolish Medicare, everyone has got to take out a private insurance, those who can't—means tested—will have it paid for by the Government.

Let me say that this is not the agenda of this coalition government. At the time of the 1996 election, our Prime Minister (Mr Howard) promised to maintain Medicare. He has kept his promise. I stand by this government's intention and desire to maintain all the principles that underpin Medicare. The major principle of Medicare is that any Australian can go into a public hospital and be treated at no charge to the patient—not just those with health insurance, not just those with the means to pay, but all Australians. This intention, this goal, cannot be maintained if the states continue to demand a 40 per cent increase in Commonwealth funding, particularly when at the same time they are refusing to reduce their own spending. I believe it would be a good idea if the states at least tidied up their own book work and stopped charging the taxpayer twice.

The amendments contained in this bill put in place a new health care agreement between the Commonwealth and the states and territories, to apply from 1 July. It provides that financial assistance will be conditional on adherence to the health care agreement principles. It also provides for this government to establish the position of a health care information commissioner. The commissioner's role will be to identify the movement of services around the health system and report how these services are funded. Before the opposition starts ringing alarm bells, might I say that the commissioner's reports will be made available to all parties.

Labor ignored the needs of the health system for 13 years, and it has taken this government to put it back into perspective. The states have clear responsibilities to manage the Commonwealth's funds rationally and effectively. These funds are provided by the taxpayers of Australia, including all those taxpayers in my electorate. I support this bill.