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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Gillard's art of compromise « Previous | |Next »
February 15, 2011

In the Sydney Morning Herald Geoff Gallop argues that Gillard is a facilitator who works to build consensus for change. With reference to health reform he says:

Gillard had a decision to make – should she plough ahead with the initial plan [that proposed that states and territories give up a portion of the GST] or should she start again? By starting again she was able to get Western Australia and the new government in Victoria into the tent. She listened and they responded.. Leadership is not just strength in the face of conflict but also agility in the face of difference. This requires emotional intelligence as well as political awareness. In other words it is about judgement as well as strength. It is about knowing when to push forward, when to hold your ground and when to take a backward step.

Gillard did this. Gallop says that the Heads of Agreement on National Health Reform signed between the federal government and the states and territories on Sunday represents a significant achievement for Prime Minister Julia Gillard. She managed the traditional Commonwealth versus States/Territory COAG conflict and it was a win for the Prime Minister.

Is it a significant achievement in terms of health reform?

Gallop is right about Gillard's negotiating skills: she is skilled in the art of negotiation and compromise. However, these skills are only useful if they can be deployed to achieve reform to make things better. Therein lies the problem: it is a very small step on the slow road to change.

What was delivered was not health reform. Gillard backed down on the federal government be the dominant funder; backed down on federal funding of 100 per cent of primary care; did not explicitly address the insufficient focus on prevention and primary care in the health system; and did not address the fragmentation that exists at present between hospitals and primary care services.

The emphasis in the new reform plan is about hospital funding.The Commonwealth has accepted the states should retain control over hospitals and that the Commonwealth will have ''no role, directly or indirectly'' in the negotiations by state governments to establish local hospital network services. The states continue to run the hospitals with the federal government guaranteeing to pay 45 per cent of the increase in public hospital costs from 2014, then 50 per cent from 2017.

The states and the commonwealth basically argue that the big problem is the health system is running out of money when the real problem, as Tim Woodruff points out, is that there is no system:

Patients are faced with the nightmare of negotiating the public hospital system, the publicly subsidised private hospital system, the general practitioner system, the community care system, the publicly funded private allied health system, the mental health system, the publicly subsidised private dental system, the public dental system, the aged care system, the private specialist system, the public specialist outpatient system, and a myriad of other poorly connected pieces.

Structural reform to integrate these systems is required, but is not suggested in this plan. What we have is relatively powerless regional organisations---Medicare Locals--- being charged with co-ordinating this maze of primary care services. the Commonwealth's backdown on taking over all primary care funding means that an added barrier to co-ordination will be a continuation of different sources of funding.

The reform of hospital services that are designed to make them more efficient and so better for patients are:

(1) local hospital networks made up of small groups of local hospitals that collaborate to deliver patient care, manage their own budget and are held directly accountable for their performance. This will avoid the fragmentation and duplication that would come from individual hospitals operating independently from other hospitals in their area,

(2) a four-hour waiting time target for emergency department patients. This involves providing $500 million in funding from 1 July 2010 to ensure patients are admitted, referred or discharged within four hours of arriving at an emergency department, where clinically appropriate.

(3) an elective surgery access guarantee designed to reduce the numbers of patients kept dangling on lists, in some cases for well over a year coupled to providing $650 million to fast-track elective surgery patients who have been waiting longer than clinically recommended;

(4) activity-based funding, or casemix, which will work by assigning a notional "efficient price" to each operation and service hospitals provide.

I'm not sure that these will necessarily lead to better patient care in hospitals--though they are steps in the right direction. Activity -based funding, for instance, does mean the government is starting to pay hospitals for what they do deliver.

The old model of block government funding meant that an increase in patient numbers was bad news for hospitals because they had to eke out their budgets further to treat them all.Their response was get patients out of hospital quickly and shifting the costs on to the non-hospital sector.

| Posted by Gary Sauer-Thompson at 11:25 AM | | Comments (8)


The nationally agreed transparent criteria for allocating funding will make it harder for state and territory governments to hide inefficiencies and poor management practices within their jurisdictions.

However, the additional funding of $16.4 billion for public hospitals is over 10 years and equates to $1.6 billion per year, across all states and territories.

As Jennifer Doggett points out at Unleashed:

The Commonwealth subsidies to the private health sector: not only do the private health insurance rebate schemes costs taxpayers approximately $4.5 billion per year, but because the subsidies are uncapped they can be predicted to grow faster than capped funding allocations to the public hospital sector.

Sobering isn't it.

At last!
Last week, the best we could come up on this topic was that ridiculous "talking head" photo op involving Kenneally, Gillard and Bligh, representative of a sort of latter day Mariolatry for election purposes, greeted deliriously by some who should have known better almost as a Second Coming.
I wondered a couple of days ago at Quiggin what the actuality of the thing was and no thoughts were forthcoming.
Once again, it is the "quiet man", Gary Sauer Thompson, who renders the thing toward comprehensibility.
Again, GST, thanks.

What do you know.
Articles on the health "reforms" are suddenly up and running, all over the place.
Over at OLP, from one Luke Slawomirski, "health care reform" that examines a couple of similar themes to those identified by by GST.

This Labor Party has shed of lot of social democracy . Gillard says in her recent speech to the Australian Workers Union conference dinner at Jupiters Casino on the Gold Coast:

I do not believe that the Labor Party has ever forgotten its purpose. I am crystal clear as Labor Party leader what the purpose of our political party is. The purpose of our political party is to ensure that every Australian, no matter the circumstances of their birth, enjoys opportunity. A fair nation does not unfairly deny a child access to opportunity. This is what we have fought for over all of these long years - opportunity and social mobility - because the trade union movement has been built by working people who have done some amazing and courageous things, fuelled by the ambition and belief that their sons and daughters would live a better life than they have: a more materially prosperous life; a life of greater opportunity.

How is that different from the Liberal Party? Joe Hockey could have said that.

You can why disenchanted Labor voters are going to straight to the Coalition. And they are choosing to stay there given that the differences between the two major parties are minimal.

if the lens of the CoAG health agreement is federalism, then the shift in the health package is from the Commonwealth being the dominant funder (Rudd's model) to being an equal partner with the states.(Gillard's model). Rudd continued to argue for Commonwealth dominance.

All states and territories have signed to the latter. It is clear that a federal model where the states run the hospitals and Canberra provides most of the funds doesn't work. Rudd overreached re GST and state rights.

Rudd also argued that Canberra should retain funding and policy responsibility for primary care to maximise prospects for patient treatment outside hospitals.

His argument is that the best way to reduce Australia's excessively high hospitalisation rate is by running a more efficient primary care model outside hospitals.

With Gillard we are back to incremental change.