Thursday, April 22, 2010

Rudd health care reforms - another note

I didn't realise until this morning that I managed to post the same post twice yesterday. Now corrected.

I have listened to some of the discussion on the Rudd Government health care changes with interest, if sometimes with a degree of bemusement. One of the reasons that I wrote Unpacking the Rudd Government health care changes was to get some understanding of the structures and principles involved. Without this, it is very hard to get a feel for issues likely to arise in application.

Power of the States

One thing that bemused me in the discussion was the suggestion that the states had somehow retained a degree of real control over health. I can't see that beyond the short term.

The care with which Mr Rudd keeps stating that the Commonwealth will have full control over primary health care and aged services provides part of the clue here. A second clue lies in his emphasis on standards, transparency and accountability. When you look at the detail, the states are going to be so tied up as to have very little discretion indeed.

I do stand to be corrected here. One of the hot issues is mental health. Listening to discussion, it wasn't clear to me whether we were dealing with a current or structural issue. By current, I mean immediate funding and arrangements. By structural, whether the area was in or out in the long term.

As I interpret Mr Rudd's wording, mental health as it relates to primary health care is now a Commonwealth responsibility.  

Systemic Complexity and associated Delivery Problems

The Rudd Government is paying a price for its implementation failures in other areas: as I write, there are newspaper reports that the home insulation scheme is finally to be axed; the school building program is being audited; the university sector is expressing concerns about the difficulties and complexities involved with the Government's approach to funding and regulation there. I had to laugh. One academic commented that the Government was trying to do to health what it had done to universities.

All this means that commentary is focusing on the question of systemic complexity and associated delivery issues. I am not sure that any of this matters at this point. What it does mean is that there is going to be far greater scrutiny of and less tolerance for the inevitable implementation problems.

Local Hospital Networks

One of the differences between the Rudd Government proposals and those put forward by earlier by Mr Abbott lies in governance and structure arrangements: local hospital networks vs individual hospital boards. Some commentators have suggested that the networks might end up looking like a smaller versions of the current NSW Area Health Services.

A post on my New England, Australia blog, Implications for New England from health reforms, looked at on-ground issues from the perspective of Bellingen Hospital. We simply don't know enough yet to make any real judgements as to how these things will pan out. What we can be sure is that the changes will play out at local and regional level across Australia.


On of the big issues that has yet to receive much attention in discussion lies in integration, integration within the health system, integration between the health system and other policy areas.

Medical training is an example of the need for integration within the health system. This depends heavily upon hospitals.

One of the reasons why I think that Mr Rudd was right in saying that the COAG Agreement was in fact an improvement on his previous proposals lies in the higher involvement of the states. In practical terms, this will aid integration.

Integration between health and other sectors has so far, to my knowledge, not been discussed at all.

Take mental health or aged care as examples. Housing is central here.

Take the HASI (Housing and Accommodation Support Inititiative) as an example. HASI  is a partnership program funded by the New South Wales Government that ensures stable housing linked to specialist support for people with mental illness.

By all accounts, this program has been a considerable success, although a friend involved in the area bewailed the fact that it is just too small given the scale of need. Where does HASI now belong?

If I interpret the new arrangements correctly, the current position will continue for the present. However, in the longer term, and assuming that my structural interpretation is correct, the Commonwealth will need to accept a degree of responsibility for the mental health side.

Similar issues arise with aged care services.


I think that I have gone as far as I can in analysing the new arrangements. I will continue to watch with interest.


Winton Bates said...

I have been thinking that when governments throw everything up in the air in an area like hospital funding there is often no guarantee that after the dust settles we will end up with a better outcome. With these so called reforms, however, I suspect that the case-mix innovation in Commonwealth funding might be an important move in the right direction.
If we are going to have the federal government acting as some kind of monster insurance firm paying for services provided in public hospitals, then it must be a good idea for it to have a system in place to make payments that are related to services provided.
At the same time, even if I am right, we will still be are a long way from the Swiss model of hospital funding - which is probably what we should have introduced in the 1970s.

Jim Belshaw said...

Hi Winton. How does the Swiss model work? This is a gap in my knowledge.

Winton Bates said...

The Swiss system provides for compulsory insurance, with the patient still paying for a proportion of the cost of treatment. I get the impression that it retains much of the economic efficiency benefits of a fee-for-service system while providing universal cover (help for people unable to afford insurance). There is a description on Wikepedia: .

Jim Belshaw said...

Thanks, Winton. I will follow up.