Radio National with Fran Kelly - 20 April 2010

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PDF printable version of Radio National with Fran Kelly - 20 April 2010 (PDF 23 KB)

20 April 2010

E & OE –

Subjects: COAG, health reform

Kelly: Your Health Minister Nicola Roxon has been in the COAG talks for some of yesterday. She’ll be back around the table and thereabouts with the Prime Minister and the Premiers later this morning. Things are moving at such a pace we need to go to her straight away, ahead of Warwick Headfield and his sport report. Minister, good morning, thanks for joining us.

Roxon: Good morning, thankyou.

Kelly: Nicola Roxon, day two yet to start. Is this proving harder than you thought it would be?

Roxon: We always knew that health reform was going to be incredibly difficult, but COAG does have an opportunity today to grasp the nettle of health reform. We can deliver more health and hospital services, more support for our doctors and nurses - if this agreement is reached today - but it does require a retention of the GST so that it can be dedicated to health and I think that is shaping up as the sticking point for some of the states and territories.

Kelly: I think that’s an understatement, I mean the Victorian Premier John Brumby couldn’t be clearer and he’s the Premier of your state, perhaps you’ve spoken to him privately, he says there’s no way Victorians will hand over 30% of their GST to the Commonwealth.

Roxon: Well, I think there are lots of negotiations that are underway, I have indeed spoken to Premier Brumby as I have to many of the Premiers and we are working closely to try and see if there is a way the issues can be resolved. That’s what’s going to be the focus of much of today’s discussions. But we have put on the table not just extensive reforms, but extensive additional investments into the system and we’re not prepared to put that extra money into the system if we can’t be confident about the structural reforms we’re seeking and they do involve the GST. Obviously that will be the issue that everybody will be doing their darndest to try and get an agreement on today, but I can’t underline how difficult it will be and we always knew it would be difficult, but it’s worth doing.

Kelly: Why is it so important that the Commonwealth gets to withhold the 30% slice of the GST from the states when the states are in fact designed to stand it anyway, offering to basically put a ring around that same amount of money and put it into a pooled pot, they just want it to come to them first. What difference does that make?

Roxon: Well, there’s a couple of very important differences that it makes. One is that the Commonwealth is putting its hand up to shoulder the burden of the growth in health costs into the future. If we’re going to do that and we’ve made a guarantee that we will meet those extra costs, that’s this 15.6 billion dollars, we need to be able to be confident that we have the share of the GST that at least partially enables us to do that. The other thing that is often not focused on is we want to be the dominant funder of hospital services. This retention of the GST allows us to be the dominant funder of services across the whole of the health spectrum. It means we get rid of the perverse incentives of some things being fully state funded, some being Commonwealth funded, patients falling between the gaps or being shunted between them and that’s a key part of our reform. If we can’t deliver the removal of those gaps, which do depend quite significantly on the financing, then our reform will not be able to be as successful as we would like. And then lastly, probably the third reason is, we want to make sure that we are able to pay this money directly to local hospital networks for the activity that they’re undertaking. The GST is a part of that package, but I think those first two reasons are the key reasons that this is so important. We’re obviously prepared to work with the States and Territories but there are some bottom lines for us, as there no doubt will be for the Premiers, that we just have to see if there’s a way that we can reach an agreement on.

Kelly: So just to clarify that, it seems to me the kicker in there is that we want to be the dominant funder of services, that’s what you say, it’s important, you think it will change the way the hospital system works and the degree of duplication and the blame shifting, if one side can say, the Commonwealth can say, we are the dominant funder and perhaps that equation might even make, over time, the Commonwealth might become more dominant within that.

Roxon: Well that’s obviously a possibility over time and one of the things that the Health Reform Commission recommended should be considered, over time. But let me give you a very easy example for your listeners, paying 60% of a hospital service that involves an intensive care bed, for example, or even a rehabilitation bed, compared to paying 100% of primary care services, means that the Commonwealth, will for the first time have the incentive to say well hang on, us actually providing more of those services in the community, even at 100%, costs us less than 60% of a hospital service where this patient has been stuck. So we’ll invest more in those services that are appropriate outside our hospitals and give patients actually the ability to be treated in the right setting. At the moment that discussion never happens because the States say ‘we run the hospitals and fund them’ and the Commonwealth says ‘we fund some of primary care but not all of it’ and people just fall between the gaps. We want to be able to start making sensible health decisions that are going to actually give patients better care and if we don’t have the dominant funding of the hospital services and then the rest of aged care and primary care, that we’ve put on the table, and community mental health, we don’t believe that we can actually deliver the type of health reform that’s needed.

Kelly: Ok, but just finally, we’ve got to go because we’ve got South Australian Premier Mike Rann on the line and there’s a lot of meetings going on this morning. But as you’re understanding the States have agreed in principle to the redesign of the system. The local hospital boards, the switch to the case style type pricing of procedures, that’s all agreed?

Roxon: I think there’s a large amount of agreement on that. I don’t think that it would be appropriate for me to verbal any of the Premiers to say that each and every one of them has signed on yet to each and every detail, I think for example the Premier of Victoria has expressed reservations in the past about some components of that and again, those governance and financing issues will be on the table for discussion today and we’re going to have very difficult negotiations, I think.

Kelly: If all this goes belly up today, how quickly will the Prime Minister recall Parliament to introduce legislation for a referendum?

Roxon: Well, we’ve of course taken steps to prepare for that, but our focus and energy has been on these negotiations and we will still put all of our effort and energy today into making sure we can reach an agreement, that’s our preferred approach, but ultimately we do have lines beyond which we can’t cross. So we can act quickly, that’ll be a matter for the Prime Minister and the Cabinet, for us to make a decision about whether you recall the Parliament, or how quickly we could put legislation there, but we are taking this step at a time and we’re still hopeful that COAG will take the opportunity today to agree to this health reform package, which will deliver better health and better hospital services to the community.

Kelly: How hopeful? Percentage chance of a deal in your view, today?

Roxon: Look, I don’t have a crystal ball and I’m not a betting person, but I think it will be very difficult, I think the community wants us to be able to reach an agreement and I think that is weighing heavily on all of us. The responsibility of trying to get this reform through, it is a historic opportunity and I hope that the Premiers will take it.

Kelly: Nicola Roxon, thanks very much for joining us

Roxon: Thankyou.