CANBERRA OBSERVED: by national correspondentNews Weekly
Rudd gambles all on hospital reform
, May 1, 2010
Is Kevin Rudd's hospital reform genuine or just another grandiose effort in spin over substance?
That is the question which must be asked after the two-day Canberra spend-fest during which the PM put $5 billion of sweeteners on the table in order to convince reluctant Victorian and New South Wales governments to come to the party of his new halfway-house funding system.
Mr Rudd was desperate for a deal. In the end he got something to crow about, but at huge cost compared to his original proposal — and without the support of Western Australia.
It needs to be recalled that 2009 was the year Mr Rudd was supposed to deliver a world-beating climate-change reform, which would help convince China and India and everyone else to cut their greenhouse gas emissions following Australia's great example.Torrents of words
Instead, despite torrents of words on the subject, it all got too hard. The "great moral issue of our time" was quietly set aside, and the policy itself apparently mothballed. It hasn't been mentioned by the PM for four months, and staff at the Department of Climate Change are looking for work elsewhere.
So 2010 suddenly became the year of "health reform".
Emulating the efforts of US President Barack Obama to push through changes to US health insurance, Mr Rudd has devoted all his energies to finding a means of ending the Australian "blame game" between state and federal governments over where the failures are in the delivery of hospital care.
As part of this exercise there has been a media blitz with Mr Rudd visiting dozens of hospitals, and making mandatory stops at each one, for the regional television news, to sit on a bed to talk to patients about hospital care.
Clearly, with Labor's historic superior record on health, Mr Rudd felt he had nothing to lose by going all out on hospital reform during an election year.
However, the Rudd plan smacked of something which was cobbled together on the basis of expediency rather than something serious and structurally significant.
The truth is that Mr Rudd opted for a 60-40 arrangement, stopping short of a full takeover because he did not want the blame-game problem to be sheeted home solely to the Commonwealth Government.
After a serious deadlock the PM was forced to make huge and humiliating concessions to the states and territories so that the new funding arrangement (which will be shared 60 per cent by the federal government and 40 per cent by the states) will now be pooled into one fund.
While toady state Labor premiers such as South Australia's Mike Rann were prepared to accept anything at all put forward by federal Labor, Victoria's John Brumby held out for a better and a more cohesive deal, and one that retained the crucial role of the states in the delivery of the system.
In the end, the Western Australian Liberal Government still refused to sign the deal because the new arrangements will take away 30 per cent of the states' entitlement to GST revenue.
The state governments will continue to be the ones which distribute the money, which will then be supervised by a new layer of bureaucracy run by regional boards.
After grandiosely claiming a successful and "historic" outcome and one rivalling the beginning of Medicare, Mr Rudd simply ignored his fundamental failure to bring the whole of the nation on side.
He has also abandoned a much-trumpeted threat to hold a referendum on the issue.
The first philosophical problem with Mr Rudd's "historic deal", and the one which so irks the WA Government, is that it reneges on the landmark federal-state tax-sharing arrangement, which is not quite 10 years old, dating from the introduction of the GST.
That agreement meant that the states would wind up a number of states taxes, duties and charges but would receive instead revenue from the new tax.
Now, because the GST is a genuine growth tax, the Federal Government is grabbing back 30 per cent of it, setting a bad precedent and a possible invitation for the states to introduce new taxes further down the track.
The second flaw in the Rudd semi-takeover proposal is that it fails to address some of the real structural problems in the system.
First, there is the interaction between aged care places and hospital beds. The Federal Government funds aged care, so all sorts of non-aged sick people, including drug addicts, who should be cared for elsewhere, are being parked in nursing-home beds in a cost-saving exercise for the states.No-man's land
Then there is the problem of the mentally ill whom hospitals reject, but who end up there anyway; they are left in no-man's land while remaining a constant burden on the system.
And, finally, there is the question of the health system itself, and whether the focus should be on primary care rather than on hospitals?
The whole Rudd exercise is about reducing waiting-lists and increasing the number of hospital beds.
The aim of the health system, however, should be in keeping people out of the hospitals as much as possible or having their stays as short as possible. This means concentrating efforts on training more doctors and nurses, on preventative medicine, on acute care and on outpatient care.
Mr Rudd, Australia's pre-eminent bureaucrat, may yet achieve his new administrative arrangements; but he is most unlikely to achieve his stated goal of ending the blame game.