Rudd delays hospital takeover decision

The prime minister has put off a decision on the takeover of the nation’s hospitals for at least six months, saying he won’t make such a fundamental reform lightly.


Before the last election, Kevin Rudd promised to fix the health system by the middle of this year or he would move to take control of hospitals.

After releasing the final recommendations of the National Health and Hospitals Reforms Commission on Monday, Mr Rudd still insisted the buck would stop with him, just not yet.

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“Fundamental decisions about the entire system must not be taken lightly and we don’t intend to do so,” Mr Rudd said.

The commission’s recommendations were the most significant since the introduction of Medicare and had “massive implications” for all Australians, he said.

The commission suggests the commonwealth fund and run all primary health care, basic dental care and aged care, as well as indigenous health services.

Healthcare funding centralised

Under its plan, Canberra would also fund 100 per cent of the “efficient” cost of each outpatient service in hospitals, and 40 per cent of other admissions.

This could increase to 100 per cent of all hospital costs over time.

The reforms would cost between $2.8 billion and $5.7 billion each year, with a capital investment over five years of up to $7.3 billion.

But the commission says savings of $4 billion a year could be found by 2032-33, through increased efficiencies and a focus on preventative health.

A meeting of commonwealth, state and territory leaders in late 2009 will now examine the health system, before the federal government puts its preferred reform plan to premiers and chief ministers in early 2010.

Referendum on takeover

“If there’s no agreement to a comprehensive reform plan, the commonwealth will proceed to seek a mandate from the Australian people for the proper reform of our health system,” Mr Rudd said.

That will be through a plebiscite or referendum.

Opposition Leader Malcolm Turnbull says the prime minister has broken his election promise to fix the health system or take charge.

“Things have gone backwards and he hasn’t taken it over,” Mr Turnbull said.

Opposition health spokesman Peter Dutton suggested Labor was simply putting off any decision until after the next election.

“He’s now saying he’s going to conduct six months of consultation,” he said. “What on earth has the commission being doing for the last 16 months?”

Discussions with doctors

The prime minister will start his talking tour with Health Minister Nicola Roxon at Sydney’s North Shore Hospital on Tuesday, the first of 25 consultations with major hospitals.

Commission chair Christine Bennett rejected suggestions the government was failing to act on her report.

“Action is starting tomorrow with the continuing of the conversation with the Australian people and taking our proposals to people working at the front line for their response,” Dr Bennett said.

Most health professionals have welcomed the new emphasis on primary health care and preventative measures.

But Tasmanian Health Minister Lara Giddings pointed out a potential problem.

Electronic health records

“The commission’s suggested approach to split the health system will not end the pressure on our hospitals or the state-commonwealth blame game,” Ms Giddings said in a statement.

“In fact it could worsen it, as potentially hospitals discharging patients back into the community could be accused of trying to cost-shift to the commonwealth-funded primary health system.”

Another key recommendation would see every Australian given an electronic health record to improve continuity of care.

New laws would protect the privacy of each individual’s e-health record, which they would control.

Ms Roxon said while there would be debate about the recommendations, the report made one thing clear.

“Business as usual is not going to be sustainable in the coming years and decades,” she said. “We simply won’t have the resources to keep doing things the way we are doing them in the future.”