The Federation Reform consultation process is now underway.  Readers may remember that the health issues paper was release in December last year and the process has been seen by groups such as AHHA as a possibility to improve healthcare.

At the time a senior health policy analyst and regular Croakey contributor,  writing under the pen name “William Foggin” raised some concerns about the potential impact of reform. In this post “William” provides insight to recent consultations in Canberra.

“William Foggin” writes:

While watching the non-spill on Monday, and choking over my coffee with glee at the tongue in cheek SBS report on Julia Gillard’s admission to the Royal Prince Phillip Hospital, I was thinking about the future of the reform of the federation process.

The first of the series of consultations on the reform of the federation took place on Thursday and Friday 5th and 6th February at the Hotel Currajong in Canberra.  Others will be taking place in every state capital, Darwin, Townsville and Wagga over the next few weeks.

The Canberra meetings were attended mainly by peak bodies of various kinds, and it is quite possible that discussions in state capitals (not to mention Townsville and Wagga) will have a different flavour.

But the sense from the first set of meetings was that reform of the federation was a solution in search of a problem.  This was particularly true in the health sector:  after hearing the usual set of statistics about Australia’s middle of the road share of GDP spent on health and our very good outcomes there was a bit of a sense that the discussion could finish early.  The Public Health Association of Australia observed that we needed the least worst system, and that against that measure we were already doing pretty well.

The discussion proceeded, however, and reached some of the usual conclusions:  no one government thinks about the system as a whole, and care coordination for people with high needs is not done very well (if at all).  The Department of Prime Minister and Cabinet  (PMC) official leading the discussion asked if there were any mechanisms that could improve incentives for governments to work together.  He was promptly reminded by several participants that the Commonwealth activity based funding mechanism for public hospitals set out in the National Health Reform Agreement did provide such an incentive – and wasn’t it a pity that the government announced in the 2014 budget that it would be terminated from 2017-18…

(Digressing to the Budget for a moment:  the abolition or defunding of various advocacy groups, the Australian National Preventative Health Agency, the National Housing Supply Council, and uncertainty about funding for other groups after 30 June was a recurrent theme.  How can the government improve policy – or even identify problems – without expert advice?)

After the meeting had concluded that the main problem with the health system was the lack of proper care coordination for the 1 per cent of the population who were chronically ill “frequent flyers”, the Australian Indigenous Doctors’ Association reminded participants that Aboriginal and Torres Strait Island people who made up 3 per cent of the population had significantly worse health outcomes and worse access to services than any other population cohort.

PMC then tried to turn the discussion towards solutions, but with little success.  The AMA argued strenuously that whatever the solution was it needed to be developed in close consultation with health care providers, as they were central to the system.  The Consumers’ Health Forum then weighed in to point out that it was actually consumers who were central to the system, and policymaking needed to start with them.

As the discussion ended PMC asked for submissions to set out possible solutions, including models that were working successfully in Australia or overseas.  And they stressed that any solution should be about redistributing existing funding.

A little bit of quiet care coordination is a long way from the aspirations in the terms of reference which include:

  • reducing or, if appropriate, eliminating overlap between Local, State and Commonwealth responsibility or involvement in the delivery and funding of public programmes; [and]
  • achieving agreement between State and Commonwealth governments about their distinct and mutually exclusive responsibilities and subsequent funding sources for associated programmes;

From a political perspective, the government has not made the case for reform of the federation.  Many of my friends who work in the health profession in Canberra are unaware that the discussion process is even under way.  They are certainly not advocates for reform, and in the absence of additional funding they will not be converted.

Indeed, it is hard to think that the CHF and the National Rural Women’s Coalition were wrong when they argued that nobody cares who funds which services –  people just want to have affordable access to the right services at the right time.  To win support for any changes the government will have to present a compelling argument that changing funding streams will result in better access to better services.  It will be a hard case to make.

Will a Prime Minister with a political capital deficit matching the budget deficit wish to try? And will a new Prime Minister think the potential return is worth investing any political capital?


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