Fed: Reformer wants commonwealth to take over health funding

AAP General News (Australia)
04-11-2006
Fed: Reformer wants commonwealth to take over health funding

By Paul Osborne

CANBERRA, April 11 AAP - A key government adviser has reignited debate over a commonwealth
takeover of health funding from the states.

Former head of the federal health department Andrew Podger, who was chosen by Prime
Minister John Howard after the 2004 election to examine options for reform, told a forum
today he remained convinced the system would be better under a single funding system.

Mr Podger said such a move would take up to five years and would be risky and costly
initially, but the benefits outweighed those factors.

"Just doing it isn't going to give certainty that the whole system is going to be a
lot better," Mr Podger told a Melbourne Institute function in Canberra today.

"To be a lot better, you are going to have to do a number of things associated with
the commonwealth being a single funder.

"In particular, we are going to need to do better in primary care, we are going to
have to do something about the relationship between aged care and hospital care.

"We are going to have to set up system of regional budgeting, which is a key area for
trying to get better financial incentives and better purchasing arrangements at that level
and better information systems to support it.

"But I still think, very firmly, that that system could achieve a lot more in terms
of gains than any other way of proceeding."

Health Minister Tony Abbott canvassed the idea of a commonwealth takeover of hospitals
before the last federal election but eventually cooled on the idea.

Mr Podger said one of the key obstacles to changing the system was the need to renegotiate
the GST agreement with the states, which provides $35 billion a year for services such
as hospitals.

About one-third of the funding would need to be returned to the commonwealth.

Under the Podger plan, the commonwealth would provide the funds, set policy and purchase
health services through up to 30 regional bodies nationwide.

Mr Podger said it appeared the federal government was interested in reform, but in
an incremental way, like the mental health package released last week.

Professor Tony Scott, who has studied health-care reforms in Britain, told the forum
a single funder was crucial to reform.

"It helps to coordinate and to generally take the steps necessary to have an efficient
health-care system," he said.

"In terms of implementation in the UK of the reforms that are happening now ... (a
single funder) has really been a crucial factor."

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KEYWORD: PODGER

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