Mr BARTLETT (7:08 PM) —The Health Legislation Amendment (Health Care Agreements) Bill 1998 provides the basis for future agreements between the Commonwealth and state governments for the provision of acute health care services to public patients—clearly a matter of intrinsic, crucial importance. But, unfortunately, it is also a matter of significant political posturing—as we have seen here this afternoon. In his introduction to his valiant effort we saw the member for Dobell (Mr Lee) nitpicking on the name of the legislation, very upset that the name was not what he wanted it to be. He then proceeded to spend the rest of his time in political point scoring. We saw the ridiculous claim by the member for Lyons (Mr Adams) that 44 Medicare offices were closing in rural areas. Nothing could be further from the truth. In fact, many rural areas have seen an increase in access to Medicare services. The member for Mallee (Mr Forrest) informed me that in his electorate alone there have been 13 extra Medicare outlets provided—an indication of the commitment of this government to providing further access to Medicare services. Then we have heard the broken record of the member for Jagajaga (Ms Macklin) on supposed funding cuts.

What are the essential features of this bill? Firstly, it embodies the government's unequivocal commitment to Medicare. It is imperative that all Australians, regardless of means, regardless of circumstances, can have access to quality acute health care. That is what this bill sets out to guarantee. It is essential that we continue to uphold the principle of treatment according to need, not according to means. This is a feature which places the Australian health system ahead of most of the world. Further, this agreement will provide for enhanced and potential growth funding according to the needs of the public hospital system.

Secondly, the legislation provides for greater flexibility in the provision of health care services so that they are more readily able to meet the changing needs of the community. The establishment of a national health development assistance program will assist in re-engineering the acute care system to improve its efficiency and effectiveness in the delivery of health services and in improving patient outcomes. The development of a public patients charter will help disseminate information about the health system and provide the means by which complaints about the health system can be made and followed up.

Thirdly, and very significantly, this bill shores up the integrity and viability of funding arrangements by tackling the question of cost shifting. For years the state governments have happily taken the funding offered by the federal government and then proceeded to shift the cost of their responsibilities back onto the federal government. I am sad to say that my own state of New South Wales is the master of the process of cost shifting. This really does highlight the hypocrisy of Dr Refshauge—who is already being offered extra Commonwealth funding—who systematically shifts the cost of some of his own government's responsibilities back onto the Commonwealth and then proceeds to complain that they want still more money.

Examples abound of the process by which the New South Wales government has shifted onto Medicare—onto taxpayers—the cost of running its hospital system that it has already been funded to run. These include the old trick of reclassifying outpatients to private status and then having them bulk-billed for services such as pathology and radiology as has been reported, for instance, at St George Hospital. Or the advice reportedly being given to outpatients at Port Macquarie Hospital to attend their private doctors rather than outpatient departments, even if they have been previously treated as public inpatients. Or Royal North Shore's system, the `self insurance scheme', whereby patients are treated as private patients for the first two days of their stay. Patients meet the accommodation charge of $213 per day plus doctors' fees—all chargeable against Medicare. Thereafter, the patients revert to public status. Or Milton Ulladulla's proposal for medical staff to lease a section of the hospital and run a privatised service so that selected patients presenting to casualty would be seen by the medical staff in a private capacity and then have their services bulk-billed to Medicare. Or a report that a Fairfield Hospital staff member is given prescriptions for inpatients written by hospital doctors and then instructed to take them to a local pharmacy to be filled—again, so that Medicare and the PBS carry the bill. Or John Hunter Hospital's practice of reclassifying public day only patients—for instance, for gastroscopies and colonoscopies—as private outpatients and, again, bulk-billing Medicare. The practice of cost shifting is endemic in the New South Wales health system.

In other words, the state governments want the federal government to again fund the services they have already paid for. They want taxpayers to pay twice. This is not fair to the taxpayer and furthermore it is detrimental to the long-term health of the Medicare system. The proposed health care agreements—by establishing a health care information commissioner as a statutory authority—will provide for the collection, analysis and dissemination of data from the Commonwealth and states so that cost shifting can be identified and overcome. This will enable the government to more accurately target its health care funding.

While the New South Wales hospital system has received increased funding in recent years, it has not been used well. For instance, in 1993-94 New South Wales recorded a cost per casemix adjusted separation of approximately one per cent above the national average; by 1995-96, this had risen to almost 14 per cent above the national average. In 1993-94, New South Wales costs were 6.3 per cent above the most efficient state—South Australia—but by 1995-96 this had blown out to 27.2 per cent above the most efficient state.

The tragedy is that, in spite of increased Commonwealth government funding, underhanded cost shifting and the enormous workload of the personnel involved in acute health care in New South Wales, the New South Wales health care system still has a long way to go. The health care professionals in New South Wales bring to their tasks a high level of skill, experience and commitment. Yet in spite of their heroic efforts the New South Wales government has failed to adequately meet the health care needs of its citizens.

Much has been said about the offer currently on the table to the premiers. The current offer to the state governments made at last week's conference was to be the first under this new arrangement. However, although the federal government made a very fair and worthwhile offer it was clearly rejected in a piece of petulant point scoring by the state premiers. Let us look at the features of the offer. There is a five-year agreement worth $30.17 billion—in cumulative terms an increase of around 15 per cent over the next five years. This includes an increase of $2.9 billion over the forward estimates of current agreements—a cumulative increase in the base funding level of 11 per cent over five years. Furthermore, this base funding level is indexed to include the major factors affecting health care costs, that is, the growth and ageing of the population, the increasing costs of providing hospital services, the increases in underlying demand and the reductions in private health insurance levels. It also includes $500 million for mental health and palliative care, representing a much needed increase of $100 million in spending on mental health.

In addition to the increased base level funding, the offer includes some other extras—an extra $750 million over five years to provide services for veterans at full cost and an extra $500 million for projects to improve the health care system. Furthermore, an important feature of the agreement is a commitment to increase funding to the state public health system for declining levels of private health membership—in fact, $83 million for each drop of one per cent in private health insurance levels. As everyone knows, one of the greatest causes of strain on the public hospital system has been the decline in private health insurance levels, pushing more and more patients onto the public system.

When Labor came to office in 1983, 63.6 per cent of Australian citizens had private health insurance. It fell over their period in office to a low 32 per cent. This has been one of the greatest areas of neglect by the former Labor government. The rate of decline has fallen in the last year and has certainly slowed, although it has not stopped. The ideological obsession of the opposition caused them when they were in government to happily sit on their hands and watch the decline in private health insurance, despite the warnings of many, including their own one-time health minister Graham Richardson. What did they do? They stuck their heads in the sand while the resulting pressure mounted on the public health system. They are still no better. The member for Dobell repeatedly criticises this government's measures to try to stem the decline in private health membership. Perhaps he could listen to his Labor colleague the New South Wales health minister, who is at least right on this issue when he blames the decline in health fund membership for the growing pressure on the public system. It is all right for the member for Dobell to continue posturing but he offers no answer to the decline in private health insurance and he therefore offers no answer to the increasing pressure on the public health care system.

The states' rejection of this very reasonable offer by the Commonwealth government is ridiculous in the extreme. Their request for an extra $1.1 billion a year on top of the increase already made is purely and simply an ambit claim. Much of this ambit claim is back pay for inadequacies under the former agreement. For instance, they are claiming $400 million for inadequacies in the indexation arrangements in their agreement with the Keating government. Given this there is a strong chance that much of the $1.1 billion they are claiming would be siphoned off into general revenue instead of going into health care. This is exactly what happened in 1992. As a result of an increase of 12.6 per cent in Commonwealth funding for health care in the 1992 agreement, in the first two years of the agreement the states decreased their funding by 12.9 per cent. In the first two years they collectively withdrew $831 million from health care spending—simply using federal funding to prop up their own budgets.

The real reason for their ambit claim now is so that state treasurers such as Michael Egan can use Commonwealth health spending to correct their own budget disasters. There is every likelihood that it would not be Dr Refshauge who would receive the extra $262 million the New South Wales government wants; it would be Michael Egan.

By their petulant stunt, their inability to act reasonably and their refusal to accept the Commonwealth's very reasonable offer, the states have further penalised their own constituents. It is time the state governments got on with the job of managing their health care systems and addressing their own problems instead of blaming the Commonwealth government for their own failure, shifting costs to the Commonwealth government and putting out their hands for more.

In spite of its problems Australia has by any standards one of the best health care systems in the world. The coalition government is committed to maintaining and improving the quality of health care services available to all in Australia. The health care offer recently made to the states is evidence of this commitment. If given cooperation at all levels of government, the Health Legislation Amendment (Health Care Agreements) Bill 1998 provides the basis for restructuring health care funding arrangements to enhance their ability to meet the needs of our community into the twenty first century. I commend the bill to the House.