Hospital reform: Your questions answered
The Federal Government has branded it “historic” and “a major achievement”, but big questions hang over Julia Gillard’s multi-billion dollar hospital reform deal.
Here are the answers to some of the most likely questions:
HOW DOES IT WORK?
The deal turns on two key things from the Commonwealth: money, and national control. More of one, less of the other.
Julia Gillard replicated what she called the “funding envelope” put forward by then PM Kevin Rudd last year, offering $16.4 billion over ten years, to meet on a 50/50 basis with the states, all new expenses for a growing health system.
However, unlike Mr Rudd, she withdrew the objective of the Commonwealth becoming the dominant funder, and therefore the predominant manager, and the attendant requirement that the states agree to hand back a third of their GST revenue.
Instead, Ms Gillard’s plan calls for a “single national pool” for funding which she says, will allow vastly improved transparency in a bid to drive greater value for money.
WHERE DOES THE $16.4 BILLION COME FROM?
In brief, it comes from you. The $16.4 billion is new Commonwealth government money raised as general revenue, and pre-allocated to health growth funding to meet growing demand and escalating costs.
There is also another parcel of money, some $3.4 billion, allocated to the states over the decade. It will be paid to states to meet new elective surgery guidelines and to achieve improvements including getting waiting times in emergency departments down to a maximum four hours.
HOW DOES THE SINGLE NATIONAL POOL WORK?
A question many will be asking. This is the central reform pillar from Julia Gillard’s perspective. Having abandoned the majority funder/controller objective and the odious stipulation - resisted to the death by WA - to hand back a huge wedge of GST revenue, Ms Gillard has opted for transparency. The Single National Pool is designed to remove the long-standing practice of cost-shifting between the two levels of government.
After agreeing on total expenditure, all monies, state and federal, would be “tipped” into the pool. Managed by an independent statutory body, it would disburse funds to Local Hospital Networks via state accounts which would in turn pay the hospitals. The advantage according to Ms Gillard is that it would be open, plain, and observable. But critics say it may amount to another layer of bureaucracy. Many details remain to be worked out.
IS IT A DONE DEAL?
No. In fact, it is arguable that Ms Gillard, in her eagerness for a deal, has made a tactical error by getting in-principle agreement and then announcing a deal. She is now in a weaker situation because with so many critical details yet to be worked out, it could all fall over on numerous aspects of fine print. It could yet sink in the Single National Pool alone.
State premiers are already equivocating ever-so-slightly. And they could walk away entirely arguing they were standing up for their state. Ms Gillard on the other hand, has a lot more to lose if the deal collapses - especially after all the fanfare. She will be lucky indeed if she gets them all across the line, signed sealed, and delivered, without making further concessions.
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