Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I rise to add my contribution to the National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011. Australian communities, whether large or small, are sustainable only if their citizens have access to affordable, skilled and timely health services. This is the same whether we are talking about a small outback community or part of metropolitan Australia. The Australian Constitution does not decisively assign responsibility for the managing and funding of Australia's health sector, so for generations there has been a need to engage federally and with our states and territories as to who pays, who makes the policies, how we coordinate all of that and how we make sure that Australia—as a developed wealthy nation—keeps up with access to the best medical technologies, medicines and therapies to keep its population well.

I am very concerned that this government is in an era where we are seeing mounting costs. We are seeing skills shortages across the health service sector. We are seeing growing waiting lists for both essential surgery and elective practice or surgery. We are seeing a growing divide between the sort of health service that a person in a country community can expect versus someone who is on the tram tracks in a metropolitan centre like Melbourne. I am very concerned that this bill ushers in another part of the new architecture that the federal government has designed under its banner of national new health reforms, but it does not give me or the people that I work with in my rural electorate any great joy in the sense that there will be more efficiency, less red tape, more coordination between the states and access to more funds for the delivery of services on the ground. This bill in fact establishes the Independent Hospital Pricing Authority, the IHPA. It is an integral part of the new National Health Reform Agreement signed by COAG on 2 August 2011. This is the third statutory authority which will be part of the new health reform architecture. We already have the Commission on Safety and Quality in Health Care and the National Health Performance Authority, and now we have the Independent Hospital Pricing Authority, which is the subject of this bill's discussion today.

The IHPA will decide which hospitals will be funded solely by activities based funding and which will continue to be provided with block funding. Those decisions, presumably, will be based on whether the hospitals are small and regional or large and metropolitan. Some states like Victoria and South Australia already have this mix of types of funding. Other states have some elements of activities based funding and block funding.

It is an extremely complex matter for a central agency to determine the number of patients, what level of skills in staff should be represented and what the cost or price should be for a whole range of different health service providers across the country. I am also somewhat concerned to find that in this new activity based funding or block funding, advice is not going to be binding on the state governments. They will be free to make payments to hospitals at their discretion. This just continues the uncertainty of who pays and when, and the ongoing debates and endless argument across the nation in the foreseeable future. This is a very concerning element.

As the member for Murray on the border regions of New South Wales and Victoria, I am particularly concerned about rural and regional Australia. Our health services are only two and three hours from a capital city, Melbourne, but we have difficulty in finding specialists, particularly anaesthetists, surgeons and psychiatrists, or any of the other essential health service specialists that you take for granted in metropolitan areas. Those difficulties have just recently been compounded, particularly in the Shepparton area, which has been designated as no longer an area of workforce shortage. So, on top of these changes that we will have to take on board, we are now faced with the fact that if a newly arrived overseas trained doctor—or, indeed, a well-established medical practitioner from a metropolitan area—wants to come and practise in the Goulburn Valley, or particularly in the Shepparton or Mooroopna area, they will not have the additional Medicare benefits and the clinic they work with will be financially worse off if it employs these people. I have an enormous concern that the way that calculation was done simply does not take on board the realities on the ground.

I repeat, the lack of specialists is a real problem. We have to wait six to nine months for an adolescent in a desperate situation to get an appointment, for example, with a psychiatrist. We have others having to wait many months for access to dermatologists. We have many people forced to travel to Melbourne regularly for treatments because they just cannot wait for the treatment to be available through visiting specialists or physicians in our region. Yet we have now been designated as not an area of workforce shortage. I am begging the minister to review the situation.

The whole business of the Independent Hospital Pricing Authority must take on board the enormous differences in types of hospitals that have evolved historically in Australia. In the new part of my Murray electorate, the Strathbogie Shire, there are three hospitals or community health centres, one at Nagambie, one at Violet Town and one at Euroa. Both Euroa and Nagambie take in in-patients for acute and other care; however, throughout the entire Strathbogie Shire there is not a single public hospital bed. If you are not privately insured and you have your heart attack in Euroa, you will be waiting for the ambulance to be called and then be transferred—ideally perhaps—to Shepparton or maybe to Wangaratta. The whole process will take well over an hour and sometimes two hours, and obviously the health of that person is severely compromised. That is because there is no public hospital bed in the Strathbogie Shire.

This is a rural based shire and the reason that there are no public hospital beds is that Euroa and Nagambie health centres have evolved out of bush nursing hospitals. Bush nursing hospitals are an unusual species in the hospital lexicon. They were private hospitals, that is true, but community not-for-profit, very much volunteer-supported hospitals that evolved out of the needs of country areas to have their own health services locally. These bush nursing hospitals have now been converted to health centres, but they may not have access to these publicly funded beds. It is a serious problem. Again, I am begging our federal health minister to have an understanding of the needs of such a population and the distances they have to travel to get alternative services because they are not privately health insured. Ours is a low socioeconomic population in the electorate of Murray, with less than 30 per cent having private health insurance. So you can understand that this is a very real dilemma.

It also affects, of course, the viability of the Nagambie and Euroa hospitals if they are forever calling up alternative hospitals to transfer patients whom they could otherwise have quite well served had those patients had private health insurance. I stress that this is part of the complexity of Australia's hospital landscape and I am hoping that this new Independent Hospital Pricing Authority will have sufficient expertise to understand the need to take on board all of those differences. When so-called case management funding was introduced in Victoria nearly 20 years ago now, it immediately came up against these sorts of complexities, and I certainly hope that we do not have to reinvent the wheel and go through a lot of pain and inefficient funding while this Commonwealth government's new authority, the IHPA, works out what it really means on the ground. I am also very concerned that we are going to spend a lot of time and effort via these national health reforms doing things like establishing MyHospitals web access. We are told we have a wonderful opportunity to learn about our local hospitals by going to this new interactive website that will be called MyHospitals. On that you will be able to read about your hospital profile, the services offered, the number of admissions, waiting times for emergency departments and elective surgery, safety and quality. Well, that is terrific in theory; it could be a useful thing. But, if it follows at all the My School website outcomes, this is a seriously retrograde step in terms of 'name and blame' or 'name and shame'. The data can be manipulated so it looks good on a website when the reality on the ground is very different. In terms of the connection between NAPLAN and the My School website—and we are told to anticipate salary bonuses for teachers as a consequence of the My School website—all we can say is that is leading to great despair and inefficiency in the education sector, and now we are told we are going to see that followed by MyHospitals.

I wish this government would, instead of these tricks and window-dressing, actually look at the realities on the ground. Euroa and Nagambie, for example, have no public hospital beds, and Nagambie has no ambulance—it depends on CERT teams. These are volunteers who have trained and now literally save lives when they are called out to deal with, for example, a boating accident where someone has lost a leg or a car accident where a family is trapped and have to have their lives sustained while the fire brigade and, hopefully, an ambulance get there. These CERT teams are now taking the place of professionals because these small local health services are so underfunded and do not have the adequate services that you would expect for communities of such a size.

Some of these are state issues; I acknowledge that. But where is the description of the coordination between the three new agencies that have been announced: the amazing new Commission on Safety and Quality in Health Care, the National Health Performance Authority and, now, the Independent Hospital Pricing Authority? How are they going to coordinate in turn with the states? How are we going to see better outcomes? Or are we simply going to see, as a consequence, higher costs of running for these authorities, greater red tape and a further squeeze on things like our PBS, our Pharmaceutical Benefits Scheme?

I am shocked and ashamed that our country—a modern, developed nation that has survived the global meltdown, the GFC, better than most—is one of the few nations in the world which are no longer going to contemplate putting new medicines and new pharmaceuticals on the PBS list because of the cost. So there may be a fabulous new cure found for some fatal condition that your child or grandchild has, but this government has simply taken away any opportunity for that pharmaceutical therapy or medicine to be put on the PBS. If you cannot afford that medicine and you do not have a house to sell to pay for it, then heaven help you. That is a shocking retrograde step. It is an indication of the fact that the whole health sector is not being properly managed. We are scrambling around, introducing a new website as a panacea. Waiting lists for elective surgery are growing and we are told that we can look at MyHospitals to find out what, for example, Nagambie's hospital profile is, when we might just live around the corner. That is just a nonsense response, and you have to wonder who is in charge of the sinking ship here.

Let me mention another area of despair for country people. We had, as you know, divisions of general practice right across the country. The whole country was divided into regions, with funding for various activities, from research to allied health professional service delivery. We are now told they are going to be converted to Medicare Locals—with new lines on the map, the staff thrown up into the air with the new configuration of who works where, and much bigger regions.

Yarrawonga, a big region on the Murray River, are being told they will now be in a region different to Wangaratta hospital, where they get most of their networking, liaising, cooperating and coordinated services. They will no longer be able to work with the same division of GPs in Wangaratta. They will be transferred into a new region where, instead, the major hospital will be Shepparton. That is not a hospital that they have traditionally interacted with, because Wangaratta is of course a much closer option. This is an example of the nonsense that is going on—new lines on maps, more bureaucracy, more red tape and less funding for hospital services on the ground. That is a shame. (Time expired)

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011. The purpose of this bill is to establish the Independent Hospital Pricing Authority as a statutory body under the Financial Management and Accountability Act 1997. The functions of the pricing authority are to determine the national efficient price for healthcare services provided by public hospitals; develop and maintain costing and classification specifications; determine data standards and requirements for public hospitals data to be provided by states and territories; and provide assessments or recommendations in relation to cost-shifting and cross-border disputes The pricing authority, subject to certain restrictions, will also be required to publish information for the purpose of informing decision makers in relation to the funding of public hospitals.

The authority will be comprised of nine members, with the chair appointed by the Commonwealth and other members appointed by the Commonwealth in consultation with the states and territories. I understand that an Interim Independent Hospital Pricing Authority was established on 1 September 2011 as an executive agency under the Public Service 1999 and as a prescribed agency under the Financial Management and Accountability Act 1997.

This bill arises from the agreement reached with all Australian states and territories on 2 August 2011 as part of the federal government's national health and hospitals reform, a reform process that began when Labor was elected in 2007, in response to the crisis in health services across Australia which the government inherited from the Howard government. It is a reform process which the coalition has either opposed or criticised every step of the way. A key part of the agreement with the states and territories is the introduction of activity based funding, which will be introduced from 1 July 2012. From 1 July 2014, the Commonwealth will pay 45 per cent of the efficient cost of growth in hospital costs and, from 1 July 2017, this will increase to 50 per cent.

Activity based funding is expected to make hospital funding more transparent and more efficient. Transparency is a key to efficiency, as is activity based funding. Transparency and activity based funding will lead to greater accountability by hospitals than is presently the case under the existing block funding arrangements. I do note, and I am pleased to see, that block funding for smaller regional and rural hospitals will continue, thereby ensuring that they will not be disadvantaged.

Australia today has one of the best health services in the world—but that does not mean that it could not be better. When people need health services it becomes a priority for them, and understandably so. Health issues can lead to life or death situations or a complete change to life. The reality, however, is that national health costs continue to rise both in real terms and as a percentage of total government expenditure, having risen from 13 per cent to 16 per cent of the federal government's total budget expenditure over the last 20 years. That ratio is probably more steep with respect to the state government budgets and I know that, with respect to the South Australian state government over the last 10 years, health expenditure has risen from $2.1 billion to $4.5 billion. It is also estimated that, in 35 years time, health spending across the country will exceed the entire revenue collected by all state governments.

The rate of increase of health costs to the public purse is simply not sustainable unless the system is made more efficient. There is scope for efficiency measures to be brought in and to stop wastage. The e-health initiative is an excellent example of that. Regrettably, the opposition has opposed that initiative and would have cut it had they been elected in the 2010 election. The government's national health and hospitals reform proposal, of which the measures in this bill are a part, is all about delivering better health services more efficiently. It is also about accountability.

A concern frequently raised with me by people in my community is the difference in fees charged between one GP and another GP or between one medical specialist and another for exactly the same service. Questions are asked as to why one GP charges a different gap from another GP for the same service, why there is a difference in the fees charged for a private hospital patient and for a public hospital patient for the same service, and what controls there are on health professionals who charge what appear to be exorbitant fees. These are reasonable questions. On the last point, shopping around for health services is not always possible and in most cases is not a practical option. When emergency or urgent health services are needed, the cost is of low importance and rarely a consideration at the time.

With respect to exorbitant fees, I note the investigations presently underway relating to what appears to be rorting of the chronic disease dental scheme. Since the inception of the scheme, $19.97 million has been identified as being incorrectly claimed from Medicare by dentists. I understand that some of those allegations relate to amounts of hundreds of thousands of dollars. According to Medicare's last annual report in 2010-11, Medicare Australia initiated action to recover more than $28 million in incorrect payments. Whenever there is public funding made available, there will always be some who will seek to exploit the opportunity, but some of the allegations relating to the chronic disease dental scheme are indeed of serious concern. This is another example of why there needs to be greater accountability over the payment of public funds.

This bill fulfils another of the necessary steps to implement the government's national health and hospital reforms—reforms which have seen an extra $19.8 billion invested in the nation's public hospitals. This $19.8 billion will deliver over 1,300 hospital beds across Australia, 5,500 more doctors, 680 more specialists and more local decision making by clinicians, hospital staff, and the community. Of the $19.8 billion, $3.4 billion will go to hospital emergency departments, elective surgery and sub-acute beds. We have also seen $2.2 billion invested in mental health services. That is an additional $1.5 billion on the previous year's allocation. There has been $650 million allocated for 64 GP superclinics across the country and $466.7 million to build an electronic health record system. Another $621 million will be spent over the next five years to support and expand telehealth services, funding for 975 places for junior doctors each year and for more nurses. That is particularly important for rural and regional hospitals and health services. There will be 1,000 extra clinical placement scholarships for allied health students, and 425 upgrades to general practices, primary care and community health services have already been committed to. We have also seen the establishment of Medicare locals.

This list is not exhaustive. There are other initiatives that the government has committed to since coming to office in 2007, so it is disappointing to hear members opposite come into this place—as they have done, one speaker after another—and criticise the state of the current health system and lay the blame on this government. If the government had not made this kind of expenditure and these kinds of commitments, what kind of health system would be operating in this country right now? What we inherited was a crisis. This government has methodically worked through the issues and problems relating to the provision of appropriate health services for people of this country, and the changes, commitments and investments made by this government are making a difference. I see it in my own community and I hear it from people when I speak to them in other parts of the country. The commitments made are certainly well intentioned and very well targeted, but with all levels of change time will be required for those changes to truly take effect. We cannot train doctors and nurses overnight and, if we cannot train them overnight, we cannot make them available to communities. That process is underway and we are seeing more doctors and nurses being trained, and at the end of their training they will be available to serve in communities around the country.

Those kinds of commitments should have been initiated a decade ago, not just three or four years ago. I have to say that this government has committed to all of those changes and I am pleased to see those reforms taking place. They are indeed significant investments and significant reforms to health services across Australia. They are necessary reforms because when Labor came to office in 2007 the Howard government—and, in particular, the present Leader of the Opposition as Minister for Health and Ageing in the Howard government—not only had failed to invest and reform health services within Australia but also had cut, I understand, over $1 billion from the health budget. Members opposite fail to mention that and fail to mention that many of the matters that the government is trying to address and rectify were in existence 10 years ago or even longer. They failed to act but they come into the chamber one after the other trying to point to holes in the current range of services. I say to them that this is a government that has been committed to health reform in this country. It is a government that not only has been committed in rhetoric but has matched that rhetoric with real dollars and real changes to the system. It is a government that understands that without those changes our health system in the future would only continue to deteriorate.

Finally, I take this opportunity to commend the Minister for Health and Ageing, who I see in the chamber, for driving these reforms and for delivering them to the Australian people. I believe that she has been instrumental not only in driving the reforms but also in negotiating the agreements with the states and territories as required and in ensuring that the objective of this government to deliver on these reforms is met. It has not been an easy road, but it is a job that the health minister has done admirably and I commend her for it.

Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Link to this | Hansard source

I will be short in my summing-up comments on the National Health Reform Amendment (Independent Hospital Pricing Authority) Bill. I thank the member for Makin for his kind comments and all members for their contributions to the debate. The bill does represent a very critical part of the government's national health reforms and our focus on improving efficiency and transparency of the nation's public health system. All states and territories have joined with the Commonwealth to implement this national system of activity based funding. This legislation is an important part of that in creating the Independent Hospital Pricing Authority.

The authority, as many members have noted, not only will determine the prices for hospital services across the country but also will take into account important factors such as safety and quality and the cost of services in regional hospitals. While most services will be provided and funded through this system, block funding will be provided for some hospitals, particularly those in the smaller regional communities. Importantly, the authority will have strong independence from all governments and will provide the health system with robust decision making similar to that provided by the Reserve Bank for our financial system. In addition, the pricing authority will publish this and other information for the purpose of informing decision makers in the funding of hospitals.

Since this bill was first presented to the parliament the Senate Finance and Public Administration Legislation Committee has conducted an inquiry and I am pleased to inform the House that the committee has recommended that the bill be passed in its current form. So I am hoping if the bill passes the House today that it will be handled promptly in the Senate in the coming sitting period. The government has also taken action to establish the interim Independent Hospital Pricing Authority, which was part of our commitment under the Health Reform Agreement. The interim authority has taken over the important activity based funding work from the Department of Health and Ageing, which will then transfer to the permanent authority after the passage of this legislation.

I thank again the members who have contributed to this debate. I acknowledge that the opposition have said that they will not be opposing the passage of this bill, as they should not since it implements reforms that have been supported on a number of occasions by the Leader of the Opposition. Of course, that has not stopped the opposition before, such as when they opposed our other health reform bills in this House. In fact, one of the bills they opposed was to make permanent a critical safety and quality body that was created temporarily by the Leader of the Opposition. Yet, despite this announced support, what we have actually seen in debate is the opposition members sniping and criticising at the edges of this historic reform of the health system. There might not be other opportunities for the opposition to do that. Since they do not have a policy of their own, they have not been able to talk about any positive action that they would take in health care. I suspect that the opposition are going to continue to avert the public's attention away from health, desperate to avoid scrutiny of the Leader of the Opposition's rather inauspicious record as the Minister for Health and Ageing. In contrast, the establishment of the Independent Hospital Pricing Authority is clear evidence of the government's ongoing drive to deliver for all Australians the best quality health care possible and to ensure the future sustainability of the health system. I commend the bill to the House.

Question agreed to.

Bill read a second time.