Some weeks ago Victorian hospitals announced bed closures, job losses and elective surgery delays because of a dispute with the Commonwealth Government over the hospital funding formula. In an election year the issue seems to have been temporarily resolved by the Commonwealth stomping up more money.
But it highlights the continuing malaise with divided. funding and operational responsibility for health care. The commonwealth has major responsibility for the Medical Benefits Scheme, the Pharmaceutical Benefits Scheme, Veterans Health and Aged care. The states run hospitals but depend on commonwealth funding to do so. Broadly, the commonwealth provides 43% of health funding in Australia, the state and local governments 26% and non-government, including individuals, 31%.
The divided funding and responsibilities was described many times as a “dogs breakfast” by Tony Abbott when he was Minister for Health.
One important objective of a good health service must be to keep patients out of expensive and often forbidding large hospitals – a state responsibility. But the funding of health services to keep patients out of hospitals is largely in the commonwealth’s hands – particularly general practice and aged care. If all services were better organized in the community there would be much less pressure on the emergency departments of public hospitals.
Some improvements were made by the Rudd and Gillard Governments but most of it was muddling through. Kevin Rudd suggested a referendum for the commonwealth to take over state hospitals. Opinion polls suggested the public supported doing this, but Kevin Rudd backed down. My preferred option would be for the commonwealth to take over all healthcare from the states, but I canot see any prospect of this happening politically. The states remain poor but proud. Neither can I see the commonwealth abandoning the field to the states. That would be disastrous!
A practical compromise, which I proposed six years ago, would be to establish a Joint Commonwealth State Health Commission in any state where the commonwealth and the state could agree, with the commonwealth providing financial inducements for any state that would sign on.
It is envisaged that the Joint Commission would have agreed governance arrangements with dispute resolution provisions. It would have joint funding from the commonwealth and the state and would be responsible for the planning of all health services in the state. The Joint Commission would buy health services from existing suppliers – commonwealth, state, local and private.
If a political agreement with one state is achieved I am confident we would see a big improvement in the cohesion and integration in health services in that state. Once the benefits in one state are secured the model could hopefully extended to other states.
Unfortunately, last year the commonwealth passed up an opportunity for long term reform in Tasmania.The Tasmanian hospitals were in a financial and operational mess.The commonwealth declined to use its financial leverage and handed out more money without reform.
For my proposal six yeare ago go to johnmenadue.com/health/html_files/Coalition%20of%20the%20Willing.html