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Address to the Australian Financial Review: 8th Annual Health Congress, Sydney: 1 March 2006.

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TRANSCRIPT Minister for Health and Ageing Leader of the House of Representatives

Tony Abbott MHR

Australian Financial Review - 8th Annual Health Congress Sheraton Four Points Hotel, Sydney Wednesday, 1 March 2006


He’s a man that does stand on family, he’s practical, hard-working and

straight-talking, and not afraid of controversy.

May I present the Honourable Tony Abbott.



Thanks very much, Penny. Thanks ladies and gentlemen for your welcome. I

would like to congratulate the organisers of this conference, because over the

next three days you have a veritable who’s who of senior policy makers and

senior officials in this sector talking to you, and I’m sure it’s going to be a very

stimulating experience for all the participants.

I’m sorry that I can’t stay for a great length of time today, but given the quality

of the speakers, and the quality of the people attending the conference, I

thought it was the least I could do to drag myself away from the parliamentary

ruckus for a morning to come up and say my few words to you.

You’ve probably found it hard to escape the attention but it is the tenth

anniversary of the election of the Howard Government, and while the Howard

Government does not believe in triumphalism or patting itself on the back, it

probably is worth just reflecting for a moment on some of the things that have

happened in health over the last 10 years.

It was assumed, when this government took office, that we were generally

hostile to the Medicare system, but I think the boast that I have from time to

time made in the Parliament that the Howard Government is the best friend

that Medicare’s ever had, have been borne out by what this government has


Since 1996, federal health spending has risen from $20 billion a year to about

$45 billion a year. The percentage of the federal Budget consumed by health

and ageing has risen from 15 to 20 per cent. Federal health spending has

risen from 4.7 to 9.3 per cent of our gross domestic product.

Some of the features of the Howard Government’s time, which I would

particularly like to draw to your attention: the stabilisation of the medical

indemnity system, the introduction of the MedicarePlus safety net, which I

think was one of the most significant architectural changes to Medicare since

its introduction in 1984. The private health insurance rebate and other

changes which have lifted the percentage of the population with private health

cover from about 30 per cent to about 43 per cent. And this is very important if

we are going to have a strong public sector. I think we need a strong private

sector as its complement.

The restoration of bulk-billing rates, now at 75 per cent of GP consultations.

Bulk-billing is important; it should be widely available. It’s not the be-all and

the end-all of Medicare, but nevertheless the government is very pleased to

see that for childhood, for elderly people and for country people, bulk-billing is

out to near all-time record levels.

And one feature of this government’s term, which is not often remarked but

which, in terms of public health, is probably as important as anything, has

been the restoration of immunisation rates from about 50 per cent in the early

1990s to over 90 per cent for children now. Our standing on vaccines has

risen from a measly $13 million in 1996 to about $250 million in the last

financial year. And, in terms of ensuring that people don’t get debilitating or

critical illnesses, this is absolutely essential. If we believe that prevention is

better than cure, well, immunisation is a very, very important part of an

effective health system.

But people are not interested in what you’ve done; they're only interested in

what you might do. Yesterday is gone. Today and tomorrow are what counts.

And, notwithstanding all the achievements of the last decade, notwithstanding

all the investment of the last decade, there are obviously significant problems

that the health system is currently grappling with.

The first is obviously workforce. We read constantly, we hear constantly from

the health professionals we mix with, that they are under enormous pressure

and I have no doubt that some of the policy orientations of the ‘80s and ‘90s,

with the wisdom of hindsight, could have been better directed. But it also

applies that the conventional wisdom of the ‘80s or ‘90s, that the more health

professionals you’ve got, the more demand for health services you produced,

the more expensive the system became and I have no doubt that

conventional wisdom was not entirely correct, and we may have significant, in

some cases critical shortages of various health professionals.

Well, there’s no simple answer to this, but I do believe that the government is

doing all that it reasonably can to address the problem. We have increased

medical student numbers by over 30 per cent since 2000. The number of

graduating doctors will increase from 1300 last year to 2100 in 2011, and,

most importantly, we will try to break down the demarcations between health

professionals and we will try to ensure that we'll make better use of our

existing current workforce.

So I'm particularly pleased at the spread of workers into general practice

because there is a vast range of general practice activity traditionally done by

a doctor which could readily be done by a nurse. I’m very pleased that allied

health professionals are now part of the Medicare system for the enhanced

primary care program.

I’m delighted that we are able to send people to psychologists rather than

psychiatrists under Medicare. That we can send people to dieticians rather

than give them drugs under our Medicare system. And the latest (indistinct),

which was an announcement made earlier in the year that there would be

ante-natal health check items under Medicare for people in country areas,

extends to midwives, a Medicare rebate, on a for and on-behalf-of basis for

the first time.

So although workforce issues will be with us for a very considerable time, I do

think there are some promising developments, thanks to the actions of the

government over the last few years.

Chronic disease - how are we going to manage chronic disease in an ageing

population? We have been remarkably successful at tackling acute health

problems and … but how do we deal with the explosion of diabetes? How do

we deal with the problem of cardiovascular disease in an older population?

How do we cope with a much heavier, dare I say obese, population in the

years ahead?

Well, health cultures don’t change easily, but the government is trying to

promote a system which deals with wellness as much as it treats sickness.

I'm pleased that we already have comprehensive health checks available to

Indigenous people over 15. Later in the year those health checks will be

available to all Indigenous people and, as many of you would have noticed,

one of the outcomes of the recent Council of Australian Governments meeting

was the announcement of a mid-life health check for Australians with risk

factors such as diabetes, obesity and so on.

Those are small steps perhaps, but they are nevertheless significant steps

because, as I said earlier, prevention is better than cure if it can be managed.

The next big challenge is the continuing growth in health costs. Now I think it’s

important to see this in perspective. There is much talk - much loose talk, if I

may say so - of unsustainability when we consider health costs.

Now, it’s true that health costs have grown significantly in this and every other

advanced economy over the last 40 or 50 years. Back in 1960, we spent less

than 5 per cent of our GDP on health; today, we spend almost 10 per cent of

our GDP on health.

But this isn’t just money down the drain. This isn’t just padding out doctors’

incomes or contributing to pharmaceutical companies’ profits, or leading to an

explosion in health over-servicing. Far from it. As a result of the additional

health investment, life expectancy in Australia has risen from about 70 years

to over 80 years in that period. And healthy life expectancy has risen by even


So that additional spending should be (indistinct) as a cost, but you could also

see it as an investment in building a more productive society. The big

difference between Australia of 1960 and Australia today is that we do not

lose vast numbers of our people in middle age to cancer and heart disease in

the way we used to.

Now you could say, look at the increase in costs and the worry about

sustainability - and it would be right, as it’s always right to worry about the

economics of change. But I think it would be very hard to say that extra health

spending has not been a very good investment in every sense.

And as well as any additional health spending is subject to rigorous cost-effectiveness testing, and that certainly is applied in the best way the

government can to additional spending under the Pharmaceutical Benefits

Scheme, and additional spending under the Medicare Benefits Schedule, as

well as that rigorous cost-effectiveness testing is applied. I think we can be

confident that cost increases in the future will have more than commensurate

health outcomes.

The third and final issue that I wish to deal with under the general rubric of

problems is this whole question of governance in our health system. I’ve, from

time to time, talked about the dog’s breakfast of divided responsibilities in our

health system. As any of you who have been involved in the health system

would know, it’s quite easy to bounce from federally-funded to privately-provided health programs into federally-funded but state-run health programs,

into federally-funded but privately-run programs, into federally-funded but

community-run programs several times in a single day.

For argument’s sake, we might go from a doctor in the community to a public

hospital, to a public hospital diagnostic service into some kind of residential

7care facility. And, inevitably, where you have different levels of government

responsible for funding different parts of the system, you have decisions

made, not on the basis of what’s best, but on a basis of who pays.

This is most acute in the public-hospital system. As all of you would know, the

most serious health problems eventually end up in our public hospitals.

Because our public hospitals have to deal with very sick people, from time to

time, disasters happen; from time to time, with the best will in the world - even

with the best systems in the world - mistakes will be made. And the inevitable

temptation is for people to look for someone else to blame. And one of the

most (indistinct) issues for people in the system is dying with this constant

argy-bargy between different people trying to shovel responsibility off on to

other people.

As a federal health minister, it annoys the hell out of me to find state public

hospital problems blamed on an alleged lack of sufficient federal funding.

Well, in fairness to my state counterparts, I suppose I can understand why

they are always looking for more money, and I suppose that when their state

treasurers won’t give them more money, it’s very easy to say, well, perhaps

the federal Treasurer should cough up.

But I do believe that it would be a better system if at least that kind of buck-passing and blame-shifting was removed.

There’s no easy way to do that. Certainly we’re stuck with it, at least for the

duration of the current Health Care Agreements. But I don’t think people

should assume that the next round of Health Care Agreements should

resemble the current round.

Certainly, I remember Stanley Baldwin’s denunciation of the Press. Am I

allowed at an Australian Financial Review conference to remind people of

Stanley Baldwin’s denunciation of the Press power without responsibility, the

prerogative of the harlot throughout the ages, he said one day in the House of

Commons, in response to some particularly irksome question. Well, as the

federal Health Minister, when it comes to public hospitals, I have responsibility

without power, the prerogative of the eunuch throughout the ages. And it’s

not at all a happy position to be in, I can tell you.

And as I said, I would be very, very surprised if the next lot of health care

agreements resemble the current lot.

Having talked about the kind of buck-passing and blame-gaming which goes

on in the system at the moment, I would be wrong to neglect the quite serious

and significant cooperation which does also take place. Whatever arguments

might go on before the cameras, at doorstops between prime ministers and

premiers, between state health ministers and federal health ministers, anyone

who was involved in the day-to-day administration of health systems

appreciates the difficulties that everyone else labours under.

Certainly my officials generally get on extremely well with state officials. I have

generally constructive and cooperative relationships with my state health

counterparts. And some of the very useful outcomes of the recent COAG,

such as the commitment to a national health call centre, are an indication that

for all of the political argy-bargy, there’s also a considerable degree of

goodwill and a substantial consensus about some of the issues that we need

to grapple with.

Finally, I just want to leave you with some thoughts about the kind of issues

that the federal government is keen to move forward with over the next few

months. I have little enthusiasm for getting further involved with problems over

which I have very little control. But I have tremendous enthusiasm for trying to

solve problems that are amenable to challenges that the federal Health

Minister might make.

As I said earlier, it is the strong view of the Howard Government that you

cannot have a healthy Medicare system without a strong, complementary

private health system, and that requires an effective private health insurance


I think it is a great achievement that we have almost nine million people

covered by private health insurance, including more than one million earning

less than $20,000 a year. I am pleased that almost 60 per cent of procedures

now take place in private hospitals, taking great pressure off our public

hospital systems.

I am also conscious of the fact that the legislation governing private health

funds was last revived in a period where the parliamentary majority was not

especially sympathetic to the concept of private health.

I am looking forward to bringing legislation into Parliament, probably early in

the second half of this year, to try to make private health insurance a more

effective product. In particular, to try to ensure that the private funds are able

to promote life, as well manage sickness, are able to deal with those problems

in the most cost-effective way, which may well be in the community as well as

in hospitals.

Another very important issue for the private health sector is the question of

medical gaps. As I may have told this conference on previous occasions, I

have been a patient as well as a health minister over the last couple of years,

and one of the most aggravating experiences in the work of the usual

outstanding health care that Australians invariably receive is the absolute

multitude of bills which come in, many of which are not well covered by

Medicare and the private fund.

Now, I don’t believe in medical price control. I think that private doctors are

entitled to charge a private fee. But at the very least we need to ensure that

informed financial consent is a reality. For some time now, the AMA has been

strongly urging doctors to ensure that their patients are in a position to provide

informed financial consent. But it’s far from clear to me that the theory has

become the general practice. Certainly, my own experience suggests that

informed financial consent is the exception rather than the rule. And while I

am very pleased to see further dialogue between the AMA and the funds and

the hospitals about this issue - and I look forward to being able to make some

announcements about this in the not-too-distant future - I have to say that if

the profession cannot bring this about itself, it will be important for the

government to ensure that it happens.

Another issue I just want to touch on briefly - I know some of your other

speakers will be dealing with this in much greater depth - is the importance of

e-health. Now, the first scripted speech I made as Health Minister was on the

use of IT in our health systems. And it frustrates me that health professionals,

who are amongst the brightest and most committed people in our country, and

health organisations, which are some of the most sophisticated groups in our

country, cannot bring to the administrative side of health practice the same

degree of technological sophistication that they will clearly bring to clinical

health practice.

I think it is a great disappointment, to say the least, that every doctor’s surgery

is not, in effect, a Medicare claims office. It is a great disappointment that the

vast majority of health professionals still do not have their health records on

an IT-based system. And I am determined, as Health Minister, to try to ensure

that within a very few years, this is finally rectified. The objective ought to be

that every health record is copied to a secure database, appropriately sorted

and filed, and then accessible under appropriate security arrangements by the

patient, and by other authorised health professionals.

The technology is not really a problem; I think privacy issues can be dealt

with. What has been missing is the (indistinct) to make it happen. And I

believe that with the creation of the National E-Health Transitional Authority

under Ian Reineke, with the renewed commitment of state and federal

ministers to this task, we do have the opportunity to really make a difference

over the next few years.

But the final thing I want to say before sitting down is to say that health is a bit

different. This is not just another sector of our economy. And the people who

are in health are a bit different from the people who are in other parts of our

workforce. There are very few people working in the health system for whom

their work is just a job. For all of us, everyone, there is a sense of vocation; a

sense of calling. And that is very important.

Yes, remuneration is significant; yes, a lack of remuneration is often a

problem; yes, government funding is very important, and getting more money

into the system is very important; but in the end, I do not want to do anything

as Health Minister which undermines that sense of idealism and that sense of

calling which people bring to their job in health, because people in health are

dealing with life and death in a way that most people never do.

And that is the ethos of our health professionals; that helps to explain the

mystique surrounding their work; that helps to sustain the extraordinary

dedication that they bring to their tasks; and that should be appropriately

respected, and, indeed, frequently saluted by people such as myself.

So Penny, thanks very much indeed for the chance to say a few words to the