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Wednesday, 2 November 2011
Page: 12443


Mr ZAPPIA (Makin) (10:57): I welcome the opportunity to speak on the National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011. The purpose of this bill is to establish the Independent Hospital Pricing Authority as a statutory body under the Financial Management and Accountability Act 1997. The functions of the pricing authority are to determine the national efficient price for healthcare services provided by public hospitals; develop and maintain costing and classification specifications; determine data standards and requirements for public hospitals data to be provided by states and territories; and provide assessments or recommendations in relation to cost-shifting and cross-border disputes The pricing authority, subject to certain restrictions, will also be required to publish information for the purpose of informing decision makers in relation to the funding of public hospitals.

The authority will be comprised of nine members, with the chair appointed by the Commonwealth and other members appointed by the Commonwealth in consultation with the states and territories. I understand that an Interim Independent Hospital Pricing Authority was established on 1 September 2011 as an executive agency under the Public Service 1999 and as a prescribed agency under the Financial Management and Accountability Act 1997.

This bill arises from the agreement reached with all Australian states and territories on 2 August 2011 as part of the federal government's national health and hospitals reform, a reform process that began when Labor was elected in 2007, in response to the crisis in health services across Australia which the government inherited from the Howard government. It is a reform process which the coalition has either opposed or criticised every step of the way. A key part of the agreement with the states and territories is the introduction of activity based funding, which will be introduced from 1 July 2012. From 1 July 2014, the Commonwealth will pay 45 per cent of the efficient cost of growth in hospital costs and, from 1 July 2017, this will increase to 50 per cent.

Activity based funding is expected to make hospital funding more transparent and more efficient. Transparency is a key to efficiency, as is activity based funding. Transparency and activity based funding will lead to greater accountability by hospitals than is presently the case under the existing block funding arrangements. I do note, and I am pleased to see, that block funding for smaller regional and rural hospitals will continue, thereby ensuring that they will not be disadvantaged.

Australia today has one of the best health services in the world—but that does not mean that it could not be better. When people need health services it becomes a priority for them, and understandably so. Health issues can lead to life or death situations or a complete change to life. The reality, however, is that national health costs continue to rise both in real terms and as a percentage of total government expenditure, having risen from 13 per cent to 16 per cent of the federal government's total budget expenditure over the last 20 years. That ratio is probably more steep with respect to the state government budgets and I know that, with respect to the South Australian state government over the last 10 years, health expenditure has risen from $2.1 billion to $4.5 billion. It is also estimated that, in 35 years time, health spending across the country will exceed the entire revenue collected by all state governments.

The rate of increase of health costs to the public purse is simply not sustainable unless the system is made more efficient. There is scope for efficiency measures to be brought in and to stop wastage. The e-health initiative is an excellent example of that. Regrettably, the opposition has opposed that initiative and would have cut it had they been elected in the 2010 election. The government's national health and hospitals reform proposal, of which the measures in this bill are a part, is all about delivering better health services more efficiently. It is also about accountability.

A concern frequently raised with me by people in my community is the difference in fees charged between one GP and another GP or between one medical specialist and another for exactly the same service. Questions are asked as to why one GP charges a different gap from another GP for the same service, why there is a difference in the fees charged for a private hospital patient and for a public hospital patient for the same service, and what controls there are on health professionals who charge what appear to be exorbitant fees. These are reasonable questions. On the last point, shopping around for health services is not always possible and in most cases is not a practical option. When emergency or urgent health services are needed, the cost is of low importance and rarely a consideration at the time.

With respect to exorbitant fees, I note the investigations presently underway relating to what appears to be rorting of the chronic disease dental scheme. Since the inception of the scheme, $19.97 million has been identified as being incorrectly claimed from Medicare by dentists. I understand that some of those allegations relate to amounts of hundreds of thousands of dollars. According to Medicare's last annual report in 2010-11, Medicare Australia initiated action to recover more than $28 million in incorrect payments. Whenever there is public funding made available, there will always be some who will seek to exploit the opportunity, but some of the allegations relating to the chronic disease dental scheme are indeed of serious concern. This is another example of why there needs to be greater accountability over the payment of public funds.

This bill fulfils another of the necessary steps to implement the government's national health and hospital reforms—reforms which have seen an extra $19.8 billion invested in the nation's public hospitals. This $19.8 billion will deliver over 1,300 hospital beds across Australia, 5,500 more doctors, 680 more specialists and more local decision making by clinicians, hospital staff, and the community. Of the $19.8 billion, $3.4 billion will go to hospital emergency departments, elective surgery and sub-acute beds. We have also seen $2.2 billion invested in mental health services. That is an additional $1.5 billion on the previous year's allocation. There has been $650 million allocated for 64 GP superclinics across the country and $466.7 million to build an electronic health record system. Another $621 million will be spent over the next five years to support and expand telehealth services, funding for 975 places for junior doctors each year and for more nurses. That is particularly important for rural and regional hospitals and health services. There will be 1,000 extra clinical placement scholarships for allied health students, and 425 upgrades to general practices, primary care and community health services have already been committed to. We have also seen the establishment of Medicare locals.

This list is not exhaustive. There are other initiatives that the government has committed to since coming to office in 2007, so it is disappointing to hear members opposite come into this place—as they have done, one speaker after another—and criticise the state of the current health system and lay the blame on this government. If the government had not made this kind of expenditure and these kinds of commitments, what kind of health system would be operating in this country right now? What we inherited was a crisis. This government has methodically worked through the issues and problems relating to the provision of appropriate health services for people of this country, and the changes, commitments and investments made by this government are making a difference. I see it in my own community and I hear it from people when I speak to them in other parts of the country. The commitments made are certainly well intentioned and very well targeted, but with all levels of change time will be required for those changes to truly take effect. We cannot train doctors and nurses overnight and, if we cannot train them overnight, we cannot make them available to communities. That process is underway and we are seeing more doctors and nurses being trained, and at the end of their training they will be available to serve in communities around the country.

Those kinds of commitments should have been initiated a decade ago, not just three or four years ago. I have to say that this government has committed to all of those changes and I am pleased to see those reforms taking place. They are indeed significant investments and significant reforms to health services across Australia. They are necessary reforms because when Labor came to office in 2007 the Howard government—and, in particular, the present Leader of the Opposition as Minister for Health and Ageing in the Howard government—not only had failed to invest and reform health services within Australia but also had cut, I understand, over $1 billion from the health budget. Members opposite fail to mention that and fail to mention that many of the matters that the government is trying to address and rectify were in existence 10 years ago or even longer. They failed to act but they come into the chamber one after the other trying to point to holes in the current range of services. I say to them that this is a government that has been committed to health reform in this country. It is a government that not only has been committed in rhetoric but has matched that rhetoric with real dollars and real changes to the system. It is a government that understands that without those changes our health system in the future would only continue to deteriorate.

Finally, I take this opportunity to commend the Minister for Health and Ageing, who I see in the chamber, for driving these reforms and for delivering them to the Australian people. I believe that she has been instrumental not only in driving the reforms but also in negotiating the agreements with the states and territories as required and in ensuring that the objective of this government to deliver on these reforms is met. It has not been an easy road, but it is a job that the health minister has done admirably and I commend her for it.