Transcript: Dr Pesce, Media Doorstop, 11 February 2011
Transcript: Media Doorstop
Westmead Private Hospital, Westmead, Sydney
Friday 11 February 2011
Subject: COAG health deal
ANDREW PESCE: The proposal that’s been put forward today and still needs to be approved at the COAG meeting on Sunday gives the potential to lock in the States and Commonwealth funding commitments in a way which hopefully should minimise cost and blame shifting in the future.
We welcome the commitment to the Commonwealth locking in funding for growth funding for hospitals in the future and for combining funding in a funding pool with the States. But it needs to be locked in, so no one can say that they’ve put in their money but the other side hasn’t.
We would like that funding delivered as directly as possible to the Local Hospital Networks, with a minimum interference from central bureaucrats in how it’s being spent. The detail on Medicare Locals is still quite scant and we want to make sure that the same sort of bureaucratic interference that has plagued the hospital system doesn’t become a problem for the Medicare Locals.
But as I’ve said, it’s good at least to see some forward progress and hopefully health reform can get back on track.
QUESTION: Do you believe this is a better option that’s being provided now than that that Kevin Rudd produced originally?
ANDREW PESCE: Look, I think the amount of Commonwealth funding is about the same. The GST has been excised which keeps the States happy. If this helps get an agreement and allows us to focus on moving forward with health reform, then I guess that makes it better.
QUESTION: The Prime Minister has said that the funding will have to go through the centralised pool. Does that fit in with your call for there to be a minimum of bureaucratic interference in spending?
ANDREW PESCE: Yes. The AMA believes that the best prospect of us being able to focus on health care delivery and not cost and blame shifting is to have a single funding mechanism. Now it’s plain that neither the Commonwealth nor the States are in a position to become the single funders themselves. So the next best thing is that national pool where fixed input from both the Commonwealth and States is transferred and it acts as the single funder, hopefully directly to the Local Hospital Networks. So I think it’s as close to a single fund which the AMA has been calling for that we can reasonably expect to see.
QUESTION: Do you think it goes far enough in fixing this health problem – problems in the health system?
ANDREW PESCE: Look, I think that it’s always difficult to anticipate whether the funding is going to be adequate. I think at least now it’s clear how that funding responsibility is going to be shared between the States and Commonwealth. But only time will tell. I think there are a few question marks.
The fact now the States remain responsible for funding of capital investment in the hospitals means that there may be some problems after they commit to funding clinical activity, whether there will be enough funds committed to capital investment which is very important to keep our hospitals up to date.
I think there’s also a very clear distinction between Medicare Locals and hospital networks. I think in the long run, this may hold up an integration of services across those two areas. And I think that’s a potential problem in the future again.
QUESTION: When it comes to the requirement that there needs to be new services offered, the provision of new areas of health – is that a grey area? Is that specific enough and what areas do you think you’ll start seeing?
ANDREW PESCE: Well I think it’s very, very important that if we’re going to see locally responsive provision of new services, that now the States come on board and put in the mechanisms which allow local decision-making in the hospitals and Medicare Locals. I think it’s very, very important – New South Wales is a good start.
New South Wales has legislated for the Local Governing Councils and for the Clinical Councils and Lead Clinician Groups, which will help set up these new services and advise on it. It’s very important that the other States now come on board, hopefully once we get this COAG agreement settled.
QUESTION: The actual 50/50 agreement though, that won’t actually come into place until 2017. Is that soon enough?
ANDREW PESCE: Look, it’s not really a 50/50 deal. It’s a 50/50 agreement in the future for the growth in health costs funding. The baseline is still at the current agreement, so the Commonwealth share is somewhat less than 40 per cent on that. I think it means that slowly over time the Commonwealth share increases and that the State’s share decreases. But we still don’t have a 50/50 funding split.
As I said, is it going to be enough? I think only time will tell. But given the fact that this is what’s required to get a financing deal on the table, we’ve got to start somewhere and it’s a reasonable start.
QUESTION: So is it really reform then?
ANDREW PESCE: Financing agreements are never reforms in themselves. What we need to see in health reform is the delivery of local decision-making into our hospitals and community health and primary care systems. That’s going to be real reform.
That way then, the doctors and nurses who have always worked together in the interest of patients, will hopefully have the input that’s required to really set proper health reform, structure reform in place, rather than focusing on finance reform.
QUESTION: So is that happening in that? Is the funding actually going to be paid into the local area as was suggested under the Rudd plan?
ANDREW PESCE: Well that would be the AMA preference. It remains to be seen what will come out of the COAG agreement on Sunday. But the AMA strongly supports direct funding with a minimum of interference from the funding source to where the funds need to be spent. That way, those Local Hospital Networks truly have the independence to decide how they spend their funds and that will allow them to come up with new models of care, new ways to treat patients more efficiently and more effectively and not always be under the thumb of some central planner who limits what they can do.
QUESTION: So in summary, what have you got out of today’s announcement?
ANDREW PESCE: Well what we’ve got out of today’s announcement is a template which appears to be satisfactory for an agreement between the Commonwealth and the States. And, of course, that’s been holding up the health reform process because they haven't been able to agree on the financing.
The Commonwealth certainly wanted an agreement to allow it to go forward and the States wanted to protect their GST revenue base. So this is a compromised deal, so hopefully the financing arguments are out of the way and we can go forward. As I said, the real reforms will now be able to start and that’s really a matter at each local level.
All of the States are going to have to enact the reforms in the way that hospitals are run. We need to see those reforms go through in all the other states and that’s the thing that is really going to deliver reform on the ground.
QUESTION: Thank you.
ANDREW PESCE: Thanks a lot.
11 February 2011
CONTACT: John Flannery 02 6270 5477 / 0419 494 761
Geraldine Kurukchi 02 6270 5467 / 0427 209 753