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September 10, 2007
A recent Age poll shows that health is one of the core election issues with many people, who are discontented with how the "system" is run by state and commonwealth governments. Both are to blame for the poor services because the current federal division of funding and service provision responsibilities means that the state and territory governments are responsible for hospital services, whilst the federal government is responsible for funding GPs and aged care services.
How are the commentators interpreting this concern? Is there a health debate forming in the media? Does the ALP own the health issue?
Fiona Armstrong in this op-ed in On Line Opinion points to the concerns about the sustainability of resources in the health sector. She says:
our ageing population puts pressure on a diminishing and ageing workforce. Ballooning costs associated with rising demand, as well as unprecedented use of technology, are placing huge pressure on health care budgets, while workforce shortages are creating unsustainable workloads for those delivering services. Given the quantum of funds involved (about $80 billion annually) and the inescapable pressures on the health budget, it is vital to ensure funding is delivered by the most effective, cost effective, and equitable means.
Armstrong argues that the separation of funding streams between state and commonwealth governments is a big problem and that it needs addressing as part of the reform of the health "system".
The reason given by Armstrong is that the separation of funding streams leads to:
cost-shifting, fragmentation of services, duplication of services and massive investments in administration in an effort to try to co-ordinate it all, much of which could be reduced and quality of care improved if the system was reformed.
The reform favoured by Armstrong involves shifting to the creation of a single fundholder responsible for financing all of the health services provided to a patient. She says that:
The arguments for a single funder are that it would have the effect of reducing much of the administrative inefficiency, making services more cost-effective, and ensuring a seamless transition between all of the services provided to a single individual. (A single funder does not mean a single supplier - services are generally best provided closest to the patient.)
Mentioned as advocates of this view are John Menadue of New Matilda and the Centre for Policy Development; and Jeff Richardson, economist at the Monash Centre of Health Economics and former chair of the recent review into the Tasmanian health system
Presumably, this single fundholder position implies that the commonwealth is the single funder, as explicitly advocated by Andrew Podger, who favours a full Commonwealth takeover of the financial responsibility of the health system. This is not likely to happen in a federal system of governance. Co-operative federalism is more likely politically speaking, and that would mean some sort of pooled funding arrangement. How would this happen? What steps are required to bring about a single funder? What sort of strategy needs to be developed? Who would do that?
My judgement is that funding is a big issue that no one really wants to tackle as it involves federalism. It has to be tackled around the edges.
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Gary
The Age polls says that:
So the dissatisfaction is with the hospitals, that are run by the states.