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Monday, 28 February 2011
Page: 1779


Mr GEORGANAS (7:10 PM) —I thank the member for Barker for raising this very substantial issue. The members for Barker, Gray and Boothby are extremely good members who are very caring in their electorates, and I would not expect anything less of them than to speak on a motion about regional hospital funding.

This is a substantial issue and it is such a good case for the government’s policy on national health funding. It is not all that often that we hear opposition members make statements in such close keeping with the stated policy of this federal Labor government. So I thank the member for his gesture, his demonstrated goodwill, cooperation and support for this federal Labor government’s approach to regional health funding.

As the member demonstrates through this motion, the propensity for one level of government to blame another level of government for health funding problems, insufficient resources and poor allocation of resources has been acute. It has been the one certainty in Australian politics over the last decade that one level of government will blame the other level of government for the state of our health system, problems with our system, and externalise responsibility for improving our system, whether it be in the regions or in the cities.

The member has penned a courageous motion in which he calls for federal government responsibility for direct funding of three private hospitals which happen to be regional. Direct funding from the Commonwealth to the regions is great, but the fact that they are private hospitals does complicate the issue somewhat.

The government’s health funding policy has further matured over recent weeks, as we have seen, and it is timely to remind the House where we are at at the moment. The government has long expressed the view and emphatically stated that we need to stop the blame game. We need to stop governments blaming each other—state governments blaming the federal government and federal governments blaming state governments—for sub-par health investments and outcomes. So we have advanced the concept of federal and state funding in accordance with a prescribed formula and being pooled and then targeted towards the need of local hospital networks, with health services on the ground run for the benefit of and in accordance with the needs of their region.

There has been debate as to how to fund this change and, in particular, how to fund the increase in funds required into the future to pay for a superior health system and health service across our nation. This has now been resolved. The Council of Australian Governments meeting on 13 February produced the heads of government agreement on national health reform. The communique in part read:

The parties agree to contribute funding for hospitals into a single national pool which will be administered by an independent national funding body, distinct from Commonwealth and State Departments, to be operational from 1 July 2012.

…            …            …

The national funding pool would also pay directly to State governments, into discrete State managed funds:

a.         block funding amounts (including base and efficient growth funding) for services better funded in that way, including relevant services in regional and rural communities;

…            …            …

The parties agree that payment arrangements from the national funding body will reinforce the States’ role as system managers, and will involve each State directing the disbursements from State accounts to LHNs in that State.

…            …            …

The parties agree that the establishment of LHNs will give local communities and clinicians a greater say in the delivery of their local health services.

…            …            …

The parties agree that devolving the control of hospital management to LHNs, and the establishment of Medicare Locals, will lead to services which are more responsive to the needs of local communities.

The states will be system managers, responsible for system-wide public hospital planning and policy. States will also be responsible for drawing up the Local Hospital Network boundaries and establishing the service agreements entered into by those local networks. Commonwealth funding will flow automatically from the national funding body to the local networks in accordance with these service agreements.

I would like to now turn to what has been happening in South Australia, specifically to the regions the member’s motion has drawn our attention to. What should be kept at the forefront of our minds when considering this member’s motion is the fact that these are private enterprises. The Australian Private Hospitals Association states that private hospitals are funded by their owners and operators. The services provided to patients treated in private hospitals are partially or fully subsidised from a variety of sources, including private health insurance funds, the Department of Veterans’ Affairs, Medicare, PBS and third-party insurers.

So the private hospitals mentioned expressed concern some weeks ago over the public subsidy paid for by the state of South Australia, which will be changed next financial year. They assume that without the particular South Australian government public subsidy in question they would not be viable and would either make a loss or close. These hospitals will continue to receive income from myriad sources, including—as the Australian Private Hospitals Association identifies—this federal government. So the Commonwealth supports private hospitals through its substantial subsidy of private health insurance in addition to Medicare, the PBS, the Department of Veterans’ Affairs and capital works projects. It also supports such service providers in the care they deliver to ageing members of the community. For example, in 2009-10 the Keith hospital received over $770,000 in aged-care funding, and in 2009 it also received $500,000 to build the new Hill wing.

The aged-care funding component includes an ongoing viability supplement in recognition of the difficulties smaller scale regional aged-care providers face. The hospital in Keith, for one, would also continue to receive some $300,000 per year from the South Australian government in recognition of the emergency services it provides in the region.

So let us understand that the South Australian government had every expectation that they would continue to receive public funds from both state and federal governments and provide public services for those funds. I understand that the South Australian department of health has been helping these hospitals, their management and their respective boards take a fresh look at their finances and plans going forward. While they might not be receiving quite as much money next year, they have been getting some very valuable management consultancy from the department in the form of Country Health SA. I understand the consultancy work has been very valuable indeed—as, in the case of the hospital in Keith, hospital management has been able to turn around their financial projections by something like $580,000 per year, which is of course well in excess of the $370,000 state subsidy in question that will terminate as of next financial year.

Going back to my earlier statements about the national hospitals network: one of the key drivers of the Commonwealth intervention in this area in the last 12 months has been the need for increased efficiency within the system. We have had ridiculous increases in the ordinary costs for the delivery of health care over the past few years. This will continue into the future. It will be made even more dramatic by an ageing population. This will be exacerbated by a proportionately smaller population fuelling our national economy and funding our health system. We need to lift our game and we need to start now—to drive our health dollars further and make it a viable concern going forward.

I am pleased as Punch that the Keith hospital is able to see an improved future, given there is less funding going into the hospital from the South Australian government. I sincerely hope that other regional services can perform similarly in the years ahead, adopting their management plans and funding sources to remain viable and continuing to provide the high-level services well into the future.

In conclusion, while I appreciate the member’s policy direction and his support for the work that we are doing on this side of the House in health and hospital funding—and I can understand his motion and I would not expect anything less of a local member; I know the member for Barker is very committed to his area, as are the other members—I cannot support this motion for one-off deals between the Commonwealth and individual hospitals. On this side of the House, we know that we will change the whole health system and make it a better system—and a better coordinated system, as we saw in the last few weeks in the discussions that took place. Our hospital reform will provide a better health system for all Australians.