Rudd must change his health reform plan quickly

Comments on Peter van Onselen “Prelude to more blame “, 6/03/2010, http://www.theaustralian.com.au/politics/opinion/prelude-to-more-blame/story-e6frgd0x-1225837497106

First, the holding up of the Henry taxation review report from public consumption and discussion is extremely arrogant of the government and a clear insult on the public's intelligence.

Second, the Rudd health reform proposal so far is nothing short of disgrace and disappointing – a half cooked product, a grab of money from the States but would still leave them with more than 40% funding for public hospitals due to the idea of so called efficient funding, but strip off their say from managing public hospitals and monopoly power to Canberra.

Clearly the proposal at its current form will not end the blame game between the federal and State governments. Rather, now there will be another layer in the chain that increases the chances of more blames between the three of them.

Third, a better funding formula is for the federal government to assume all funding responsibilities for national public hospitals and transfer all responsibilities of funding and operational to one layer of government and force that government to be accountable for the outcomes of national public hospitals.

The federal government can reach agreement with the State governments to reduce the GST payments to them at the current funding levels by the States. There should not be a need for referendum. The federal government can start with any States that agree to hand over the responsibility of operation and funding of public hospitals. For those States that don’t agree, their funding of GST will not include the parts for public hospitals and primary health care.

Fourth, yes, that government can sign contracts with boards of some hospitals or groups of hospitals or some new regional bodies. The Productivity Commission, in conjunction with the Commonwealth Grants Commission as well as representatives from those boards or even from the State government, can form an independent body to assess the funding needs of each board in terms of their responsibilities and expected outcomes.

The boards should be made of health professionals, local representatives and State representatives, but should not include federal representatives, so they operate at arm’s length from the funding source. The federal government should generally not interfere with the making of board members.

If a particular board is ineffective in running their hospitals, it should be refelected in the pays of its board members. In addition, the federal can intervene in the making of the board.

Fifth, while the Productivity Commission has been assessing the performance of State government in many areas, its assessment is fairly superficial and lack of details. The Grants Commission, in its capacity to determine funding for States through the allocation of the GST, has particular expertise in making detailed assessment of State operation costs taking into many factors into account.

Lastly but not leastly, the federal government needs to put more funding into the national health system, at least for those States that hand over the funding and servicing responsibilities, starting from year 1.