Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the amendment on sheet 7178 moved by Senator Fierravanti-Wells be agreed to.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Before the break I was speaking on this amendment and the parliamentary secretary was making comments in relation to the current Leader of the Opposition during his time as Minister for Health and Ageing. She made some misleading comments and I want to correct the record. She was clearly reading from a script that had been written for her by Minister Roxon in what I can only describe as the usual spiteful and vitriolic diatribe we know Minister Roxon for. I will correct and refute the misleading comments that those opposite keep parroting about Tony Abbott's record when he was health minister.

The claim that funding for public hospitals decreased by $1 billion under the coalition government is false. It is wrong, it is misleading and it is a lie. The Australian government's funding for health, including public hospitals, increased significantly under the coalition government. According to the Australian Institute of Health and Welfare, Australian government expenditure on public hospitals increased every year, from approximately $5.2 billion in 1995-96 to over $12 billion in 2007-08. Annual spending on health and aged care by the Australian government more than doubled, from $19.5 billion in 1995-96 to $51.8 billion in 2007-08. Australian government funding to the states under the Australian Health Care Agreements was $42 billion between 2003 and 2008 compared to $31.7 billion between 1998 and 2003, and $23.4 billion between 1993 and 1998. The 2003-08 Australian Health Care Agreements provided a 17 per cent real increase in funding compared to the previous agreement.

The constant misrepresentation of this point by the Australian Labor Party is the sort of thing one expects from a government with a Prime Minister who went to the last election saying to the Australian public, 'There will be no carbon tax under a government I lead.' That was an outright lie to the Australian public, so what else would one expect from this sort of government? It is not surprising that the parliamentary secretary was parroting misleading and wrong information. The government's claims are untrue.

In 2003, the coalition government provided an extra $10 billion for public hospitals in the Australian Health Care Agreements. Funding for public hospitals from 2003 was 83 per cent higher than under the previous Keating Labor government. A change in the growth rate of the Australian Health Care Agreements due to higher private health insurance coverage and other demographic changes was reflected in the forward estimates of 2003. However, public hospital expenditure continued to increase by 17 per cent in real terms in the 2003-08 Australian Health Care Agreements, contrary to the constant false accusations made by this government.

In relation to this, Parliamentary Secretary, I am correcting the record with respect to your misleading comments about Mr Abbott's record. If the parliamentary secretary does not believe what has been put on the record, I refer her to the statistics provided by the Australian Institute of Health and Welfare to me and to other senators during the estimates process both at additional estimates in 2009 and on 10 February 2010. I particularly refer the parliamentary secretary to question E10-407, which provided information to me which I have already put on the record, and question E10-408, whereby documents in relation to this data were provided to me. Those documents have also been put on the record.

I really thought I should correct this situation, because it is typical of this government to constantly trumpet false and misleading information in relation to the time when Mr Abbott was health minister. Parliamentary Secretary, if you are going to come in here and give us this sort of diatribe, get your facts right. Your facts are drawn from what your government has put on the record and they are as I have stated—that is, your claims are absolutely and totally false, misleading and wrong, and it is a lie that funding for public hospitals decreased by $1 billion under the coalition government.

I now return to the coalition's amendment. I was talking about some of the evidence that Catholic Health Australia provided in relation to this. In his evidence to the committee, Mr Laverty pointed out issues pertinent to non-government owned providers of public hospital services and he stated:

... we have to account for capital, depreciation, insurances, council rates, long-service leave and information technology, even down to whether or not a Microsoft licence per user is applied to each cost of patient admission. Different states and territories use different accounting systems, which affects whether or not these various components will ultimately make their way into what is an efficient price. For an NGO provider of hospital services, all of these form the component of what is the price or the cost of delivering a service. Some states and territories account for these things differently; indeed, within states different areas at present can account for them differently.

Coalition senators believe that this experience and perspective should be reflected in the pricing authority legislation. In further evidence to the committee, Mr Laverty stated:

... we argue that the governance of this new authority should allow for the appointment to its board of someone who has experience in the delivery of NGO hospital services.

Just as clause 144 of the bill requires that at least one member of the authority has substantial knowledge or experience in the provision of health care in regional or rural areas, coalition senators support the submission of Catholic Health Australia that non-government hospitals should also be guaranteed representation.

I will now highlight in general terms some other aspects of this bill. Clearly, this bill does not match the rhetoric of the health minister and the former Prime Minister from the time the Independent Hospital Pricing Authority was first mooted. Whilst this new authority is supposed to set the national efficient price for each activity conducted in hospitals, that price will only be a guide to the Commonwealth's contribution to growth funding for public hospitals. As was pointed out in one of the submissions to the Senate inquiry, the bill needs to be understood for what it does not do. It does not set a nationally agreed public hospital payment. As Catholic Health stated:

It is therefore understood that whereas the authority will determine a national efficient price, it will remain a responsibility of state and territory governments to determine the actual amounts paid for hospital services. There may not be certainty on how much the states or territories will actually contribute.

So, as far as the states are concerned, the national efficient price that will be set by the pricing authority will only be advice. It will not be binding on them. The payments that the states make to their local hospital networks could be above or below that price—it is at their discretion—which will mean that all that rhetoric about ending the blame game means absolutely nothing. Australians were told that this grand hospital reform would end the blame game, but I point the Senate to the Bills Digest which says:

It is likely that debates about the adequacy of public hospital funding by each level of government will continue for some time.

That means all the hollow rhetoric about ending the blame game means absolutely nothing.

The COAG communique of April last year also had another commitment about the pricing authority that was to end the blame game. The communique makes reference to that, not that it is unexpected—another commitment that appears to have disappeared when this bill was finally brought before the parliament. I refer to the Bills Digest's assessment on this particular point. The digest says the bill empowers the pricing authority to investigate and define cost shifting and cross-border disputes, but then the digest says:

It is silent, however, on what actions jurisdictions must take if they are found to be complicit in either cost shifting or in a cross border dispute. In the event of a cross border dispute, the IHPA may provide advice to the Commonwealth about funding adjustments to relevant jurisdictions.

It goes on to say:

The Commonwealth has limited powers with regard to the operation and management of public hospitals and is unable to compel a jurisdiction to make payments to other jurisdictions or to alter their policy settings.

As the digest correctly points out, this would appear to undermine transparency and the extent to which these disputes can be resolved.

There we have it—empty rhetoric. The blame game will continue and there is nothing that can be done in relation to price shifting. Throughout this odyssey of grand reforms under both the Rudd and Gillard governments, all these measures have been trumpeted to the public as increasing transparency, accountability and all sorts of things. It is very clear that the stakeholders do not agree with this. Throughout the submissions this perceived lack of both transparency and accountability of the pricing authority was very evident. For example, the Australian Private Hospitals Association in its submission says:

APHA believes these provisions fall a long way short of the practice of the board of the Reserve Bank of releasing its decisions and its monthly minutes publicly with no prior commitment by the executive.

So, when making the comparison with other disclosure regimes, it is very clear that this authority falls short.

The other main concern in the submissions was the burden of compliance on hospitals. The Heath Care and Hospitals Association—the peak body of public hospitals, which will be affected by the pricing authority—warned in its submission that the government must take care because the authority's decisions would have immediate and wide impacts on hospital services. In my previous comments, I mentioned duplication or even triplication. As the Australian Institute for Primary Care and Ageing stated:

There is very little integration between the statutory bodies. There is a risk of duplication or even triplication, which could create a significant burden for health services. Their isolation from each other is counterproductive.

These are comments which the coalition certainly agrees with. (Time expired)

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

I rise to speak against the coalition amendment to the National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011. The Australian Greens certainly understand the reasons for the coalition suggesting that someone of significant standing, experience or knowledge in the provision of services in non-government hospitals be included as a member of the pricing authority. We also accept that the regional and rural health community has been acknowledged as another area of expertise. In fact, there is a requirement for someone with that background to be included as a member of the pricing authority.

We are worried that with this amendment we are starting to become very prescriptive about the make-up of the pricing authority. There are a number of other groups that could potentially be included. We know that there are people with clinical expertise—surgeons, anaesthetists, nurses and so on—who would have a legitimate claim to be included to make sure that we have somebody with clinical experience as part of the pricing authority. We could go further and suggest that somebody who has significant experience in the field of health economics be included as well.

For that reason, we believe that the regional and rural health community, which has already been acknowledged, be the limit to which we prescribe the particular expertise, skills and experience on the pricing authority. It should be restricted to that group only. We certainly understand the reasons for wanting to include additional groups. It is reasonable, when determining the make-up of the authority, that consideration be given to people with experience in the non-government hospital sector, but we do not think it is the role of this bill to list those specific areas. As I said earlier, there are a number of other areas that we would also need to consider if we were going to go down that track. For that reason we have decided that we will not support the coalition's amendment.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I indicate that I will be supporting the coalition's amendment. It makes good sense to support the amendment moved by Senator Fierravanti-Wells on behalf of the coalition. I think it is quite reasonable that there should be at least one person at the pricing authority who has substantial experience and knowledge and significant standing in the private hospital system.

Some time ago in relation to the Medicare levy surcharge—three years ago, although it seems longer—the government, as part of the negotiations for my support, agreed to a comprehensive study by the Productivity Commission on the comparative efficiencies between private and public hospitals systems. That was a very good exercise and the Productivity Commission produced a lot of useful information. It underscored where there would be unanimity in relation to that report and it underscored the importance of having both a robust public health system and a robust private health system, and the interaction between the two, to get the best possible outcome for health consumers, for the people of Australia. I note the figures given by Senator Fierravanti-Wells. Some 43 per cent of hospital beds relate to the private system. I think it would be remiss of us not to have a representative of the private hospital sector on such a pricing authority. If it is to be truly independent, truly inclusive and truly representative, this amendment ought to be supported and I do so.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

The government do not support the amendment proposed by the opposition, as we do not believe that it would enhance the provisions of the bill. Currently there is a provision for one member to have rural and regional experience with flexibility for other members agreed between the states and territories and the Commonwealth to ensure a variety of experience and expertise for the membership. The Council of Australian Governments has already announced the chair and the deputy chair of the IHPA. The chair will be Mr Shane Solomon, who gained experience in the provision of public hospital services from non-government operators when he was the group chief executive officer of Mercy Health and Aged Care Victoria.

While other appointments are under consideration by COAG, the government expects at least one other member to have the experience the opposition seeks. That has been explained to the office of the shadow health minister. While we agree with the outcome the opposition is seeking, we see no reason to diverge from the National Health Reform Agreement in this case. The way the amendment is drafted would potentially include a person with purely private hospital experience in the definition of membership, even though they are not covered by the authority and have very different pricing models from public hospitals. Private and NGO operated public hospitals will be able to and will be encouraged to direct their recommendations direct to the authority during the public consultation.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

It is very important that we recognise the need for different kinds of experienced people on this pricing authority board. We have heard already in the course of this debate that there will be somebody with regional and rural experience. People who have anything to do with medicine know that regional and rural hospitals are different kinds of places from the big metropolitan hospitals, especially the big public hospitals. If recognition has been given to the fact that there is a need for somebody with regional and rural experience on this pricing authority board, we really have to think also about the need, as the Catholic Health Australia spokesman Martin Laverty has said, for someone who has operating experience in the private hospital sector.

Private hospitals are very different from public hospitals. Public hospitals work on public money, obviously, which is not accounted for in the same way as is money in a private hospital. Martin Laverty, CEO of Catholic Health Australia, made the point that the Catholic hospital system represents about 10 per cent of hospital beds in Australia, amounting to something like 2,700 Catholic hospital beds, mostly on the east coast but very strongly represented in Western Australia where we have two St John of God hospitals which are major, very large private hospitals in the metropolitan area, one in Subiaco and a new one south of the river in Murdoch. There is also St Anne's hospital, formerly the Mercy Hospital and another big Catholic hospital. St John of God has hospitals in the major regional centres of Western Australia in Bunbury, Geraldton and Kalgoorlie. So St John of God is a major hospital provider. Its funding models and business models are quite different to those of the public hospital system, where there is obviously a bigger flow of money coming in.

Private hospitals have to account for capital depreciation, insurance, council rates, long service leave, information technology—even down to whether or not a Microsoft licence per user is applied to the cost of each patient's admission—because the private hospital system requires cost accountability, which really is not an issue in a government run system. There are very different considerations when you come to the private system and, given that, the case for having a person on the board with private hospital, private sector, experience is very hard to argue with. In the end, in the private sector every cost has to be recovered. You have to work out each individual item of cost within the whole system because in the end that cost has to be recovered in the fees charged to the patients. That requires a different approach altogether. You cannot just assume that some things will be 'given', that some services will be provided because they always are in a big government hospital. In the private system they are not. You have to think of the cost of every towel by a basin, every needle and every syringe, the cost of electricity for the use of electrical goods within a hospital—it all has to be accounted for.

The entire approach in a private sector operation is very different to that in a government sector operation, where people are less concerned about costs. They probably should be more concerned but, because it is a government operation, nobody bothers too much about the use of power or the provision of drugs, dressings and supplies, which can be done in a fairly easygoing way. The cost of the nursing staff required to support a surgeon in an operation is not taken into consideration as much, in the sense that the cost is borne by the government and it does not have to be accounted for in the same way. In the private sector, just as in any other private business, every item of cost has to be considered in terms of the ultimate unit cost to the patient. It is a very different approach.

For that reason the coalition's proposition that there be a person on this board who has private sector experience is one that, in terms of simple common sense, is very hard to argue against. These hospitals are major organisations incurring, day by day, very high costs, and in the end it has to be brought down to a unit cost for an individual patient for their day in the hospital. I strongly support this coalition amendment and trust that the committee will find it does as well.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

With the indulgence of the chamber, because I note that there will be a guillotine on this bill at 9.30, I need to—

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

And a whole series of other bills at the same time, without debate. It is a disgrace.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I know that. Senator Cormann should know that I am very unhappy about it as well, but if I reflect too much on Senator Cormann's—

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Xenophon, I would be pleased if you did not engage in a debate with Senator Cormann.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I will not engage in a debate, because time is incredibly short. Can I indicate that I have an amendment on file, one that has been recirculated, that I propose to move in two parts. There are two parts to the amendment. One says that the pricing authority must not report publicly unless a period of 30 days has elapsed since a report has been given to the minister or, if the report has not been given to the minister and each state and territory health minister, a period of three months has elapsed since the report was completed. I will not seek to divide on that. I understand I do not have support for it.

The other part, which I will be dividing on, says that, if a report is given to the minister, the report contains one or more recommendations and the minister does not agree to adopt one or more of the recommendations, the minister must publish on the internet his or her reasons for not adopting the recommendation or recommendations. The reason I will move this is that the minister, in the second reading speech to the bill, said:

The Authority will have strong independent powers: it will be for public hospitals what the independent Reserve Bank is for monetary policy. This is unprecedented for the public hospital system.

The result will be a thorough and rigorous determination without fear or favour to Governments. The Government is confident that the Authority will provide the health system with the stability and robustness that the Reserve Bank has provided for monetary policy for decades.

If that is the case, let it be truly independent; let it be properly transparent. If the minister does not agree with any or all of the recommendations, the minister ought to give the reasons for doing so, given that we are setting up this truly independent body akin to the Reserve Bank in its robust independence. This amendment relates to transparency. The reasons for a recommendation not being supported, not being adopted by the minister, ought to be given by the minister. I think what I am proposing is an important transparency and accountability mechanism.

I do note that both the coalition and the Australian Greens supported an amendment to the Australian National Preventive Health Agency Bill 2010 which said the CEO of that organisation:

… must cause a copy of any advice given or recommendations made in undertaking the CEO’s functions … to be published on the … web site within 12 months of providing the advice or making the recommendations.

That is not quite the same as this recommendation but is similar in spirit and similar in terms of the process of transparency and accountability. I think that if we are setting up these bodies there ought to be some transparency and accountability. The minister of the day ought to give reasons why any recommendations are not followed through. That is why I urge my colleagues to seriously consider this amendment. It is consistent with the amendment supported by the coalition and the Greens on 17 November 2010, just over a year ago.

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for the consideration of the remaining stages of the National Health Reform Amendment (Independent Hospital Pricing Authority) Bill 2011 has expired. The question is that amendment (1) on sheet 7178 moved by Senator Fierravanti-Wells be agreed to.

The committee divided. [21:34]

(The Chairman—Senator Parry)

Question negatived.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I seek leave to have the question put for the amendment on revised sheet 7180 standing in my name and, further, I ask that the question be put separately in relation to subsection (2) of the amendment.

Leave not granted.

That is a bit cruel, Mr Chairman!

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

But leave is not granted, cruel or otherwise, Senator Xenophon.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

It is cruel and unusual, Mr Chairman. Nevertheless, I move the amendment standing in my name:

(1) Schedule 1, item 21, page 47 (lines 1 to 8), omit section 211, substitute:

  211 Conditions to be met before public reporting

  (1) The Pricing Authority must not report publicly (whether on the internet or otherwise) unless:

     (a) if the report has been given to the Minister and each State/Territory Health Minister—a period of 30 days has elapsed since the report was so given; or

     (b) if the report has not been given to the Minister and each State/Territory Health Minister—a period of 3 months has elapsed since the report was completed.

  (2) If:

     (a) a report is given to the Minister and each State/Territory Health Minister under paragraph (1)(a); and

     (b) the report contains one or more recommendations; and

     (c) the Minister or a State/Territory Health Minister does not agree to adopt one or more of the recommendations;

the Minister or State/Territory Health Minister must publish on the internet his or her reasons for not adopting the recommendation or recommendations.

  (3) Subsection (1) does not apply in relation to a report under section 212.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

The question is that the amendment circulated by Senator Xenophon on sheet 7180 be agreed to.

The committee divided. [21:40]

(The Chairman—Senator Parry)

Question negatived.

Bill agreed to.

Bill reported without amendments; report adopted.