Australia's next health system

Last year, the Productivity Commission’s research report, the Economic Implications of an Ageing Australia, made a significant contribution to the debate on the inter-relationship between health care spending, health reform and the ageing of Australia’s population.

The Productivity Commission’s report presented a clearer picture on the links between the ageing of the population and expenditure on health care than that in Peter Costello’s 2002-03 Intergenerational Report. It placed greater emphasis on the uncertainty of non-demographic factors and tells us that small variations in productivity will have large impacts on future projections.

The commission makes it very clear that more importance should be given to determining the ageing population’s real contribution to future health spending. This is crucial because it has implications for how future health spending is projected, and how to design the best responses to the policy challenges we face.

Letting it break - the Howard Government squanders the chance for reform

In 1998 and in 2003 the Howard Government squandered two major opportunities for health reform. Much of the shape of our health system and particularly the way in which our public hospitals work is dealt with in five-yearly agreements between the Federal and State Governments. But the Howard Government has failed to use either the 1998 Health Care Agreements or the 2003 Agreements to deliver reform.

The lost opportunity of 2003 was particularly egregious, coming after expectations had been raised and working parties in nine different areas had developed reform proposals.

But in the end, the Howard Government was interested only in ripping $1 billion out of the agreements, and then getting them out of the way.

Indeed, the current Minister for Health, Tony Abbott, denies the need for reform.

In a speech last August entitled The Trouble with Reform, the Minister famously gave the Treasurer heart palpitations when he stated that “the syllogism ‘health costs are rising, we can never afford to spend 15 per cent of GDP on health, therefore health must be reformed’ is just wrong - especially if the reform in question is more trouble than it’s worth”.

This absence of reform zeal is inexcusable in the face of the pressures our health system faces, but also inexcusable given the opportunity that the strong economy has given us for reform.

It is in the good times - time of high growth - that provision should be made for the future.

This is not just a squandering of opportunities but a level of gross negligence which wastes a once-in-a-generation opportunity to strengthen the key social contracts that are part of what it means to be Australian.

Turning the page - the next health care agreements

Minister Abbott has signalled that renegotiating public hospital funding arrangements with the states will be a focus of a fifth term Howard Government. These five-yearly agreements determine the funding and administrative arrangements for our public hospital system.