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Wednesday, 4 November 1992
Page: 2584


Mr HOWE (Minister for Health, Housing and Community Services) (5.05 p.m.) —I move:

  That the Bill be now read a second time.

I am pleased to be able to move the introduction of an important piece of legislation that amends the Health Insurance Act 1973 and will build upon the foundations of the best health care system Australia has ever seen. Medicare was established by this Government in 1984 and fulfils three major functions:

—Medicare guarantees access to public hospital services provided by the States and Territories to all eligible Australians;

—Medicare guarantees access to services provided by medical practitioners and optometrists;

—and the pharmaceutical benefits scheme which is the third leg of Medicare provides access to essential pharmaceuticals.

This Bill is concerned with the first of these health care functions; that is, continued provision of public hospital and other public health services to Australian residents. While a solid health care foundation has been laid, this Government is not content to stand still. We want to ensure that there is some national policy consistency and momentum on important issues such as improving public patient access to hospital services and improving the planning, efficiency and delivery of public hospital services. The national health strategy has set the direction for reform and identified the challenges we have to face. We know that the projected population change will mean increased demand for health services into the next century and that technological change often brings more expensive medical interventions. The national health strategy has also identified the impressive efficiency gains our public hospital system has achieved over the last 10 years and ways to improve those gains by developing better waiting list management, through better hospital budgeting by identifying and comparing treatment costs and through improved integration of community and hospital care.

  This Bill is the vehicle for maintaining the impetus for hospital reform. It will establish the framework for the Commonwealth-State Medicare agreements and provide a special appropriation to guarantee funding certainty to State and Territory governments over the next five years. The money to be provided under the agreements will fund hospital reform initiatives across Australia in co-operation with the States and Territories. According to the financial impact statement in the explanatory memorandum, over the five years an additional $1.307 billion more is to be provided other than if the current agreement were continued.

  This Bill, and through it, the Medicare agreements, offer scope to make public hospital services stronger, to tie in assured funding for five years and to provide incentive money to kick-start reform pilots in all aspects of hospital planning, management and service delivery. The Commonwealth has two objectives for the legislation. First, we intend to provide a funding guarantee to the States and Territories for the five-year life of the Medicare agreement from 1 July 1993 to 30 June 1998. Secondly, our objective is to enshrine the Medicare principles and associated commitments in Commonwealth legislation. The principles and commitments have been developed in consultation with the States and the wording reflects State suggestions. While the principles focus on the provision of public hospital services to eligible persons, it is acknowledged that they operate in an environment where eligible people have the right to choose private health care in public and private hospitals supported by private health insurance.

  Nonetheless, the principles are centred on public hospital provision for public patients, since their purpose is to articulate the reasons for Commonwealth funding of State hospital services. The principles are:

Principle 1: Eligible persons must be given the choice to receive public hospital services free of charge as public patients.

Principle 2: Access to public hospital services is to be on the basis of clinical need.

Principle 3: To the maximum practicable extent, a State will ensure the provision of public hospital services equitably to all eligible persons, regardless of their geographical location.

The principles articulate the concepts of choice, equity and access in public hospital service delivery. They give expression to the security that every Australian resident is looking for in the public hospital system and are the reason that our health system is so much better than those of other nations.

  The Bill also outlines the broad conditions for funding that will apply in the Medicare agreements. The most fundamental of these is that receipt of funds is conditional upon signature of the Medicare agreements. These conditions include taking steps towards passage of State and Territory legislation that is complementary to the Commonwealth Bill and which enshrine the Medicare principles and commitments. Under the Medicare agreement both levels of government will undertake to implement the principles and commitments.

  The Commonwealth does not expect the States to implement the principles and commitments alone, but to recognise that both levels of government have an interest and duty to maintain our public hospital services and to ensure that public patients get the most comprehensive and fairest health service possible. Part of this provision involves the delivery of information to eligible public patients. This is reflected in commitment one which requires the joint Commonwealth and State development of a public patients' hospital charter. The Commonwealth's vision for such a charter is that it will be a `plain English' guide to what Australian residents can reasonably expect as a public hospital patient.

  The Commonwealth does recognise that immediate passage of complementary State and Territory legislation may not be possible in some States, despite the best endeavours of governments. It is for this reason that the Bill allows some scope for definition in the agreements of what constitutes reasonable efforts towards adoption of the principles and commitments in legislation.

  Commitment two encompasses efficiency and quality in public hospital service delivery. This is one of the priorities of the Bill and Medicare agreements and will be supported by the incentive package reforms. These reforms include continuing the development and implementation of casemix systems in hospital service delivery, ensuring elective surgery for public patients is organised efficiently and fairly, and investigating with the States and Territories better ways of developing capital strategic plans for hospitals and providing hospital services that meet local area needs.

  We will not achieve this level of reform without the States and Territories. Improvement in our public hospital services involves Commonwealth, State and Territory commitment of effort and money. The Commonwealth is providing a funding increase of approximately 7 per cent over the base hospital funding grants to make our public hospital services more efficient and effective. This legislation will demonstrate to the Australian public that both levels of government are committed to excellence in health care.

  At the same time, we recognise that circumstances differ in each State, and in the bilateral negotiations taking place, the outcome of which will be reflected in the agreements, we are responding positively to the particular circumstances of each State, within the overall framework of the principles and commitments. The Bill provides for this flexibility. It allows for flexibility and consultation on the agreement and it allows for consultation with the States and Territories on the timetable for implementing components of the Bill. I commend the Bill to the House and I present the explanatory memorandum to this Bill.

  Debate (on motion by Mr Downer) adjourned.