Well, Labor finally fell over the line on health and hospitals reform. Four years after opposition leader Kevin Rudd threatened a referendum on a Commonwealth takeover of health, and just over two years after the Health and Hospitals Reform Commission tabled its massive report, we have a completed, fully-agreed reform package.

Australia already has both an efficient and effective healthcare system by OECD standards. Health reform started life amidst the Howard government’s inability to withstand media pressure to Do Something about hospitals, and Labor’s opportunistic exploitation of the issue. The phrase “end the blame game” became a staple of political discourse. When asked to consider the real priorities of health reform, the HHRC headed by Christine Bennett took a slightly different view — the priorities on equity grounds were indigenous health, mental health, rural and remote health, dental health (the only area where Australia has gone backwards in OECD comparisons in recent years), and then improving timely access to quality care in public hospitals. Amid a range of other priorities like preventative health, the Commission also recommended activity-based funding and greater performance reporting.

Later, when Rudd made health reform a pre-election priority to cover his retreat on climate change, the focus switched to workforce participation and addressing the looming fiscal impact of an ageing population. His comprehensive win over Tony Abbott when he debated the opposition leader on health was a rare bright spot in an otherwise dismal year for the then-prime minister.

Julia Gillard has made much less of the issue. She’s only made the occasional hospital tour, unlike her predecessor, who spent much of autumn 2010 wandering the corridors of hospitals across the land. The phrase “underpromise and overdeliver” has been kept in mind and the rhetoric — which under Rudd tended to suggest a revolution in the the federation itself — toned down. Now the package has been “landed” as part of the government’s “year of decision and delivery”.

I observed back in the middle of the Rudd government that it was good at “5% reforms” — the small reforms that would yield low-level but ongoing economic benefits, like OH&S harmonisation — but none too flash at the big stuff, Stephen Conroy honourably excepted.

The health reform package is somewhere in between. It’s not the historic reform package promised by Rudd either before he became prime minister or even at the beginning of 2010, but in the absence of a complete removal of state governments from health management, it retains the key reforms of activity-based funding and greater performance monitoring. It’s significant that one of the main objections this year from the states has been to an overly-independent process of performance monitoring, which they rightly fear will expose underperforming states and facilities to public scrutiny.

The real benefits of the reforms will not be easily observed. Health expenditure will still continue to rise remorselessly as our population ages. But greater efficiency from activity-based funding and performance reporting should make for a lower rise than would otherwise be the case, reducing the fiscal impact.

The real beneficiaries will be the taxpayers of the next three decades, not urban Australians who want free high-quality healthcare treatment in emergency departments and don’t want to wait for it.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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