Brave move on health but more restructure turmoil – April 2010


Kevin Rudd is brave and right to take responsibility for funding the lions share of the public health system but yet another restructure at the coalface is good reason for trepidation.

The Federal Government’s National Health Reform Plan (see p.24) is politics on a big canvas. It is up there with the introduction of Medicare.

As with anything on this scale we need to hold off on rushing to judgement, all the more so when there is a lot of detail yet to be announced.

The plan’s broad brush strokes have merit, particularly the commitment by the Federal Government to fund 60% of public health expenditure. Over the years, the percentage of funding coming from the Commonwealth had shrunk to 35% and this has underpinned the chronic underfunding of the system.

There is now some well-needed clarity about where responsibility for funding lies.

When it comes to detail there are many questions to be answered and concerns to be dispelled.
The Federal Government’s mantra for its reform is ‘funded nationally, run locally’ – a very catchy and appealing slogan. At the heart of its plan are local health networks, which bring together small groups of hospitals in a local area that are run by local professionals with local knowledge.
All fine in theory.

Our concern is that there will not be the economies of scale and efficiencies that come with a fully integrated health system. That is not to defend the current area health services, which are obviously too big and remote from community needs. But we are yet to be convinced that these small networks will be able to deliver the necessary breadth of service provision.

A key ingredient of the reform is how the funding is distributed through an ‘efficient price’ for the provision of services. The efficient price is a mechanism of accountability to ensure that Commonwealth money is spent on health care in an efficient and quantifiable way.
The calculation of this efficient price will be critical to the success or failure of the whole health reform.

Patients stay in hospital because they need nursing care. Nurses are by far the largest part of the hospital workforce and wages budget. The inclusion of the true cost of nursing care, including appropriate numbers and skill mix, into the efficient price will be absolutely vital if this plan is to succeed.

Kevin Rudd’s plan is as yet light on detail on how industrial issues and bargaining will fit into the new structure.

The states still retain responsibility for enterprise bargaining. While there is more clarity about overall funding it gets a bit murkier when it comes to the funding of wages.
Our fear is that we will have a similar situation to aged care where the Federal Government says there is adequate funding for fair wages, and the employers say there isn’t. In other words, another form of the blame game.

Whatever the merits or pitfalls of the plan, it does mean we are in for another restructure and that is a daunting thought. There are many nurses out there in the public system who will be going through their third or fourth restructure. They are entitled to feel a certain sense of restructure fatigue.

Our campaign for staffing numbers and skill mix is linked to reform
Kevin Rudd’s massive reform gives context and urgency to our campaign to win mandated minimum staffing numbers.

How patient safety and the cost of nursing are factored into the ‘efficient price’ is a big unknown. The existence of enforceable staffing numbers and skill mix could be a bottom line in calculating the cost of nursing in any ‘efficient price’ of service provision.

I believe it will also be necessary to have a nursing presence on the commission that sets the efficient price to ensure that the cost of nursing is factored in.