The new Victorian Liberal government, like the old Victorian Labor government, is a major player in Australia’s health reforms.
Over their first 100 days in office, the political landscape of health reform changes from one where the Western Australian government was the lone Liberal irritant, able to be sidelined in the national picture, to the new landscape where there are two Liberal governments, expected to be joined by a third (big) one in NSW. As a bonus, three state Liberal governments also brings the federal Opposition into play in a much more important role than previously.
The new landscape demands more than contrary opposition, as the Liberals will soon be running more than half the public hospitals in Australia. A coherent approach to reform between Victoria, WA and NSW is absolutely central to Australia’s health system.
The main game for the Liberal states, as for the others, is to obtain real growth in federal funding for the public hospital systems over the next decade, assuming they want to maintain the Medicare policy of universal access to comprehensive public hospital services (which is their very sensible policy position).
The main problem, often overlooked in recent health reform debates, is that the current system of capped annual global budgets for public hospitals produces waiting lists independent of the level of funding. Australia’s waiting lists — not seen in much of the OECD with similar levels of health expenditure — are an unhealthy side effect of the system of funding, not the level of funding.
Nicola Roxon’s reforms towards uncapped casemix funding are designed to fix this problem. This is crucial to the long-term sustainability and bipartisan political desirability of Medicare. Nevertheless, there is plenty of room for debate on national health reform, and a politically important opportunity for the emerging Liberal bloc to make a real contribution.
For example, the architecture and mechanics of the proposed federal takeover of primary care and community health services are far from settled. From the federal government’s point of view, the major problem is the relative isolation from the rest of the system of the general practitioners that they fund. To solve this, the Roxon proposal is to bring over the other primary health and community health services from state control to create a 100% federally funded primary health care sector.
However, from the states’ point of view, this risks breaking the functional nexus between hospital and community health services that is crucial to the care of the top 50% of their service users. A Liberal bloc alternative to this conundrum would give strength to their arm. It could emerge fairly quickly given that Victoria and WA currently have perhaps the best nexus between their hospital and community services, and so arguably have the most to lose from the Roxon approach.
As the new politics of health reform takes shape, it is important to remember that it is meshed in to two other big things.
One is the future of the taxation system, particularly the future of state revenue raising and the distribution of the federal GST revenue.
The other is the future of COAG, both its structure and its functionality. As these play out during the term of the second Gillard government, central agency (Treasuries, first ministers) concerns may be more influential on the health reform agenda than health ministries. Perhaps it was ever thus.
*Paul Dugdale is director of the ANU Centre for Health Stewardship