March 5th 2011

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Articles from this issue:

CANBERRA OBSERVED: Labor pounces on divisions among Liberals

HEALTH CARE: Public hopes dashed by Gillard health 'reforms'

PAID PARENTAL LEAVE: Gillard's pseudo-PPL scheme a malign charade

PUBLIC WORKS: The urgent need to build new dams

COVER STORY: Planned Parenthood's activities finally exposed

EDITORIAL: Arab political turmoil: what's cooking?

FOREIGN AFFAIRS: Obama reaps whirlwind in the Middle East

ECONOMIC AFFAIRS: Can we avoid a second global financial crisis?

NATIONAL AFFAIRS: Business leaders call for national investment fund

REPRODUCTIVE TECHNOLOGY: Children's right to know their genetic parents

REPRODUCTIVE HEALTH: Medical cover-up of fetal pain perception

TASMANIA: Euthanasia and assisted suicide back on the agenda

RELIGIOUS FREEDOM: Bible banned at citizenship ceremonies

OPINION: The failure of multiculturalism

Brisbane dams fiasco 1 (letter)

Brisbane dams fiasco 2 (letter)

Legalising abortion (letter)

BOOK REVIEW: THE TROUBLE WITH CANADA... STILL! A Citizen Speaks Out, by William D. Gairdner

BOOK REVIEW: WHERE MEN WIN GLORY: The Odyssey of Pat Tillman, by Jon Krakauer

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Public hopes dashed by Gillard health 'reforms'

by Stephen Milgate

News Weekly, March 5, 2011
As the noise generated by Julia Gillard's re-form of the Kevin Rudd health "reform" (promoted as the greatest change since Medicare) dies down, it's time to analyse the play.

What happened, and what does it mean? To answer this question, it's necessary to restate the rules of the game.

Politicians jostling for the political high ground in the contentious area of health have leveraged considerable advantage by promising the Australian population unlimited high quality health care for the cost of the Medicare levy.

Shortfalls in the health budget are then made up through general taxation revenue. Australian governments are spending record amounts of taxpayer money on health care (AUD$78.6 billion in 2008-09 from a total health spend of $112.8 billion, according to a media release of the Australian Institute of Health and Welfare, of December 14, 2010). This equates to $3,622.62 per person in government spending alone.

Despite this, the reality is that without a price mechanism, the only way to meet the public expectation of unlimited availability of health care, given the limited supply of health dollars, is by "rationing".

Rationing is a word rarely spoken in political debate over health care, and for good reason. Since politics is a competitive business, anything that makes the focus-group worm turn down is to be strictly avoided.

Yet despite record state and federal government spending in the name of health, the consequences of health care rationing in our public hospital system are clearly evident: long waiting-lists for elective surgery; bulging accident and emergency departments; cost-shifting through privatisation of public hospital out-patient clinics; the removal or downgrading of public hospital facilities for the mentally ill; and the progressive decline in rural, remote and smaller metropolitan hospitals.

Perhaps the most striking evidence is the degrading of traditional public hospital administration and the employment of "managers" whose job consists of slowing the output of our public hospitals through ward and theatre closures to meet budget constraints, whilst minimising the political damage.

The trick for politicians is to be seen to be "doing something" new and exciting about health services delivery when their role is primarily organising finance through tax transfers. Repeated use of the word "reform", which implies a change for the better, is very effective in successfully pulling off this charade.

So too are taxpayer-funded "programs" and manoeuvres that hold out the prospect (however false) of relieving pressure on the public hospitals. This includes borrowing failed concepts such as the Darzi PolyClinics and the now defunct Primary Health Care Trusts from the UK and re-badging them as GP Super Clinics and Medicare Locals respectively, without any public analysis or justification other than an occasional media release.

Given that we have allowed our public hospital system to take on the worst aspects of both an open-ended government charity and a government department, is there any real reform that could alleviate the blights of a rationed health care system?

The Australian Doctors' Fund (ADF), in its 2004 report to the Tasmanian Parliament, entitled Towards a More Positive Approach for Tasmanian (Australian) Public Hospitals (available from its website, listed below), pointed out the need for parliamentarians to acknowledge the existence of Gammon's Law in regard to health care and public hospital funding.

Dr Max Gammon was a British physician who studied the British National Health Service in the 1960s, trying to work out why increases in funding were resulting in bed closures and, in some cases, hospital closures. His conclusion was simple but powerful: "In a bureaucratised system, as government funding increases, productivity declines."

Dr Gammon highlighted the fact that when government money comes through the back door in the form of block grants, it is easily diverted to purposes other than direct patient care, a process he described as bureaucratic displacement. Much less of the new money reaches the patient, while non-patient-centred activities and projects grow substantially (closing beds to open desks).

In promoting real change for the better in our public hospital system, it is going to be necessary to ensure that a substantial amount of public health care financing comes through the front door with the patient, while not neglecting the important role of public hospitals in teaching and research, a role that has also been eroded due to rationing.

The ADF proposes that a form of taxpayer-funded patient hospital insurance, for those who cannot afford private health cover, could be one way of overcoming the problems of the current system. A publicly-funded hospital health card or voucher which could be used at any hospital, public or private, would see hospitals with real front-door income, better able to work towards improving patient care and spending less time managing rationing issues.

But this change on its own would not be sufficient.

Independent hospital boards consisting of community representatives would breathe some fresh air into public hospital administration. Granting these boards the right to hire their own CEO and negotiate workable arrangements for hospital staff - and thereby boosting morale - could usher in a new era of community ownership of our most important public health assets.

Sadly, no such reform is contemplated under the latest Gillard Government agreement. This is because the essence of the latest agreement was more about "re-form" than reform. It's about political management of public expectations, a topic close to the heart of all politicians.

The bottom line is that in order to stay politically competitive, both state and federal politicians need to deflect the inevitable blame arising from the rationed health care system we have voted for. Kevin Rudd's loop-the-loop, "I pay with your money" so-called "reform" did nothing but confuse the issue for all players.

Julia Gillard and the states have agreed to split the political blame for health care rationing 50/50.

The other "seen to be doing something" schemes, namely Super Clinics and Medicare Locals, are to continue as new black holes competing for the limited health dollar.

There is to be no examination of the maze of government-sponsored programs, organisations and agencies funded in the name of health that have no direct bearing on the delivery of health care or medical research.

Re-form is not reform and, in the words of the late and great Professor Fred Hollows, "semblance is not substance". Sadly, in the name of health, government spending on semblance is part of the game.

Stephen Milgate is executive director of the Australian Doctors' Fund, which was established in 1989 and is chaired by Dr Bruce Shepherd AM. Its website is:

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