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Monday, 21 November 2011
Page: 8983


Senator FIERRAVANTI-WELLS (New South Wales) (13:45): 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.