Transcript of Doorstop - Dr Kerryn Phelps, AMA President, Sydney - AMA's response to the Federal Government's announcement on the future of the Australian Health Care Agreements

PHELPS: The Prime Minister today has made an important announcement about the future of the Australian Health Care Agreements which are due to be signed in July, this year.

The announcement that $42 billion will be going into the health care agreements with the states for public hospital funding over the next five years is an important one. The AMA has had a chance to have a look at these figures and we think that that increase is in the right ballpark. It amounts to about 5.67% over the life of the agreement per annum. About 1% of this is for population growth, 4.67% for ageing and for increases in costs.

The incentives for the states to match that indexation formula is now evident and also for the states to provide financial accountability which is something that the AMA has been calling for, for quite some time.

What we need to do now is to look beyond just the funding issues to what else the Australian Health Care Agreements can achieve and that is to look at improvements in areas such as mental health, aged care and the links between primary care, acute care and post-hospital care, to make sure that the health system works as efficiently as it possibly can. Any questions?

QUESTION: I think it's a 17% increase in essential funding. Do you think it would be another shot in the arm for public hospitals?

PHELPS: It actually amounts to a figure of 5.67% per annum and it is definitely a shot in the arm for public hospitals. Very importantly, there is no clawing back of the amount that the Federal Government could claw back because of the increases in private health insurance and that might just give the public hospitals a chance to catch up because they have been falling behind because of inadequate funding for quite some time.

QUESTION: Have the, I suppose, public versus private hospitals in the sense that I suppose private hospitals have received a lot more federal funding in the past so is this sort of bringing them into a sort of a parallel with the private hospitals?

PHELPS: We're not seeing the same levels of funding per bed per day for the public hospitals as we are for the private hospitals and that, I think, remains to be negotiated but the important thing here is that the plight of the public hospitals has been recognised. There is a recognition that they have been underfunded.

We want to now see what the states are prepared to do in terms of financial accountability and in terms of matching the indexation that the Commonwealth has put forward. We also want to see the Commonwealth and the states sit down together and talk about more than funding, to talk about standards and benchmarks and to talk about the things that are really important to the Australian public and that is a healthy public hospital sector.

QUESTION: So it's important that the states put their hands in their pocket as well?

PHELPS: It's very important that the states now respond to the Commonwealth's position and that they announce what their indexation formula is going to be and how they're going to go about responding to this request for financial accountability, to say what the states are actually going to be spending on their public hospitals.

QUESTION: On the face of it, it looks like a generous offer from the Federal Government.

PHELPS: We think that this position by the Commonwealth is an appropriate position. It amounts to a 5.67% increase per year. Now, about 1% of that will be for population growth. The other 4.67% will be for ageing and for increases in costs.

We know that the public hospitals have been underfunded and really struggling for quite a number of years so there are two very important features to this. One is that there will be some real increase in funding to the public hospitals and the second is that the Commonwealth will not be clawing back any amount of money that they could do as a result of the increases in numbers of people who are privately insured. So this may well give the public hospitals a chance to do some catching up in terms of providing services, in terms of investing in capital equipment, in providing services to their populations.

The challenge is now before the state governments to put forward their position in terms of indexation and in terms of financial accountability, to actually say to the taxpayers in each state, this is the amount of money that we're spending in the health area and this is what we're spending it on.

But this is about a lot more than funding and what we need to do now is to encourage the state and...

What we need to do now is to encourage the state and territory health ministers to sit down with the Commonwealth and to say we are going to talk about more than just the funding formula.

We're going to talk about the things that have been discussed in the lead-up to this agreement, things like a better deal for mental health, what's going to happen with aged care, better linkages between primary care, acute care and the hospital sector and to look at greater efficiencies in the health care system.

QUESTION: So, it's a start but there's still quite a long way to go.

PHELPS: I think the Commonwealth has now laid its position on the table. It's said how much money it's going to put forward in the next five years. Forty-two billion dollars sounds like a lot of money and it is but public hospitals cost a lot of money to run and it's very important that we have a public hospital system that is up there with the best in the world because our population deserves the best care.

Now, what we do need to see is accountability for the funding that is going to the states, we want to see the state governments agree to match that indexation formula that the Commonwealth has put forward.

QUESTION: How likely do you think it is that the states will agree?

PHELPS: I think the states have been put in a situation where they have an incentive to agree and it will really be up to them now to say how realistic it is for them to come forward with that accountability and to put forward an indexation model that will match the Commonwealth's offer but there is no question that the public hospitals have been doing it tough, they've been struggling for a very long time, we now have welcome recognition that more funding is needed and that more funding will be applied to the public hospitals so that Australians can get the care that they need.

Ends