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Ian Hickie and Paul Gross discuss COAG -

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Health experts, Professor Ian Hickie and Doctor Paul Gross join Kerry O'Brien to discuss the
outcomes from today's COAG meeting.


KERRY O'BRIEN, PRESENTER: When Kevin Rudd early last month announced his plan to boost access and
standards to 700-plus public hospitals around Australia by establishing a new local hospitals
network and taking majority control via a new funding system, we sought then an independent
assessment of its merits from three senior health professionals.

Tonight, two of those experts are back to try to make sense of what's really going on in Canberra
today and make an educated guess as to what we're likely to end up with.

Professor Ian Hickie is a pre-eminent psychiatrist and an executive director of the Brain & Mind
Research Institute at Sydney University. Paul Gross is a respected veteran health bureaucrat, now
global consultant at the Institute of Health, Economics & Technology Assessment.

They're in our Sydney studio.

First of all, Paul Gross, what are your informed impressions, if I could put it that way, from the
lead up of today's meeting and your understanding of what's actually happened behind closed doors

forward for a Prime Minister holding the line. I am very glad to see he did not relent in the face
of pressure from the Premiers. He told them quite clearly that for this money that we are now
putting into the health system, you will have to do something for it. That is different in the

I'm glad he did not back away on the GST.

Secondly, it is quite clear to me that late in the day, with the addition of the $1.2 billion for
elective surgery, emergency rooms and for subacute care for the mentally ill, he plugged three of
the remaining four holes that were left from all his previous announcements and I have to say,
after blasting on about this for a long while, this was a very, very good move.

KERRY O'BRIEN: Do you understand why he has played it this way, why he's released these other
elements of the plan in dribs and drabs? What's behind that?

PAUL GROSS: I can only assume that lurking somewhere behind all the financing is the message from
the Henry report, which has not been released and won't be released I would expect for another two

But somewhere in there is a bit of fiscal reality, and that is, somebody's going to have to pay for
these promises that have been made over the last three or four months.

If, in fact, he's uncertain about what is going to happen in the future because of the economic
downturn - if, in fact, he's unsure about GST take - I can understand why Treasury might be telling
him "Eke this thing out in dribs and drabs". But the consequence of that has been, for people like
me who are used to seeing bits of the puzzle come together in some sort of logical policy, I've had
to figure out what's coming next and the bit that is still missing is one of the most important
bits and that is the absence of any investment at all in the information technology that is going
to link up primary care doctors, specialists, community care centres and hospitals and for that, I
still can't understand why the delay is occurring.

KERRY O'BRIEN: Ian Hickie, what's your understanding of what's gone on today and where it's headed?

PROFESSOR IAN HICKIE, BRAIN & MIND RESEARCH INSTITUTE: I think as your introduction showed, we're
down to an argument now about tax and we've got off the central issue, which is health reform.

I agree with Paul, what the Prime Minister is championing is health reform, but we need to end up
with a national health plan, not just a national hospital plan and it seems the solution at the
moment is to keep throwing more money at emergency departments and elective surgery, when the big
areas - and they're on page 92 of the Prime Minister's most recent report - mental health, dental
health, prevention, Alcohol and Drug Services and Paul's favourite area, E-Health and information
technology, are all put aside.

And Paul's fiscal reality is the reality. We need to invest in that whole health system and in
part, the Premiers are saying that. They can't see what the whole plan is. They want to see more
money, but we all need to see the whole plan so at the end of the day we're absolutely convinced
that the Prime Minister is taking us where we want to go: national health reform.

It's important to say, taxation wise, "It's all our money". Whether it's controlled by the States
or the Commonwealth, and it only pays 70 per cent of the whole health system. You pay the other 30
per cent out of your pocket and it leaves big areas not funded, like mental health, where only 40
per cent of the population gets any service.

And other big areas like Indigenous health remain sadly neglected. So I think the Prime Minister's
on the right track. We've got to get a commitment to national health reform, but it has to be so
much more than just national hospital reform.

KERRY O'BRIEN: Paul Gross, can you just explain from your perspective why it has to involve the
Commonwealth taking back 30 per cent of the States' GST?

PAUL GROSS: Because I would guess, Kerry, that from the rest of the tax system there's not enough
money to fund the promises of an ageing population with more chronic illness and secondly, it's
very important to restate what the Prime Minister has said time and time again. If the Feds are
going to take over this bundle of 60 per cent of the funding, they've got to have some control over
how that funding is used.

So the one other thing that is missing from this afternoon's announcements are, who is going to
control a pool of funding if the Prime Minister and the Premiers still insist on having State-
having pools of funding at the Federal and State level and where the States are arguing that they
ought to control it?

Now, if the States control the pool of funding, any of the money that is being poured in today or
promised today will go nowhere. The States by themselves have not shown the capacity to do what
other leading-edge organisations around the world have done in the merging of funding to bring
about care that reduces our heavy dependence on the hospital bed.

And in parts of the announcement today it's just more about emergency rooms and elective surgery as
though there is nothing else in the system. We have to get off this particular preoccupation.

KERRY O'BRIEN: Ian Hickie, you've got your ear to the ground in Canberra. Why is everything so
focussed around public hospitals? Is it that's that where the public sympathy is? Is it the public
can picture and relate to public hospitals, even though the rest of health care is what mostly
affects them?

IAN HICKIE: We've all sadly been disappointed in recent years over the last few decades at the
decline in our great public hospitals.

We see that as a fundamental commitment from our taxpayer money. We all want the public hospital to
be there when we need it, but with chronic illness and ageing and recognition of many other areas,
we also want medicines we can afford, a GP we can see, mental health services, Alcohol and Drug
Services - very importantly, age care services often in our homes and in places we can use them.

So I think the Australian public in all the polls - which is clearly driving everybody here - is
saying: "We want a national health system. We do need it to be GST based. It needs to be Federal
taxation-based so we don't have state-to-state variation. We get real national programs in all of
these key areas, including performance in our hospitals and including relationships with the
private hospital sector, which does most of the surgery in this country.

So we need national programs, national taxation. The sooner we frankly get to one single funder,
the better. So I hope all this nonsense we're seeing at the moment is simply first base on the way
to where we really should be - a single-funder, national taxation that then gives us efficiencies,
but also coverage of those long-neglected areas like aged care, like mental health, like alcohol
and drugs services and particularly like Indigenous health.

KERRY O'BRIEN: Paul Gross, when John Brumby asks for a 50-50 funding in a pool, what's his point?
What's he trying to achieve and how valid is that?

PAUL GROSS: Well, I'm never sure about what Mr Brumby wants, because his last booklet on the
subject of health reform was a big wish list that had a whole lot of uncosted elements in it and
was ... it looked to me horribly like one of the most populous documents I had ever seen.

I don't query his motives, except I know they're political and when I look at somebody up for
election, I have to really ask "So they actually understand what they're spouting?"

And I would have been quite happy had he fallen into line today, argue- given way on the state pool
business, had an argument with the Prime Minister over how much GST, but between the lot of them,
if they'd done what Ian is suggesting and I've been suggesting should have been done a long time
ago, I want to see a set of national health goals with all types of care included in the armament
that we throw at health problems.

I want to see the funding clearly laid out. I want to see the paths of the funding - public and
private - channelled towards different services.

I do not want to see this compartmentalisation of budgets that we heard about today in this new
$1.2 billion. I don't want to see that sitting there, because as you have just seen, the Australian
public seems to be saying - 62 per cent of them - that they want to see some reform led by

But I wonder if they really understand what sort of reform they want.

KERRY O'BRIEN: Ian Hickie, what is it going to say about the COAG process if by the time the
Premiers and the Prime Minister get up tomorrow and walk away without a solution? What will that
say about COAG?

IAN HICKIE: It'll say it's a failure and it will say it's failed the Australian people and I think
the Prime Minister's being held principally responsible.

The Australian public's made it clear since 2007 it expects the Prime Minister to solve it.

And we in the health sector I think clearly back the Prime Minister to come up with a political
solution and then get on with the real business, because we have got to reduce our reliance on
hospitalisation through better primary care, better out-of-hospital services, better integrated
services and get a better health system that we can sustain financially but also from a personal
and infrastructure point of view into the future.

So we should end up with a world-leading health system, not one that's continuing to deteriorate in
the face of this political nonsense.

KERRY O'BRIEN: Paul Gross, one word, because we're out of time. I assume you agree with Ian Hickie
on this one?

PAUL GROSS: I do, but I go a step further. It is time for the Prime Minister to give real
leadership and that is, to drag the private health sector, the voluntary sector, the medical
profession and consumers into an overarching national council to look at health resource allocation
in exactly the same way as Germany has been doing for 15 years.

We're at the end of every annual cycle of debate. Everybody in the room knows what's going on,
whereas tonight I have to tell you, I doubt if many people outside watching there will understand a
hoot about what's gone on today.

KERRY O'BRIEN: Paul Gross and Ian Hickie thank you very much for joining us tonight.

IAN HICKIE: Thank you.

PAUL GROSS: Thank you.