Health deal good for states, Roxon tells premiers

PREMIERS have arrived at Parliament House in Canberra today expressing serious reservations over Julia Gillard's proposed health deal.

PREMIERS have arrived at Parliament House in Canberra today expressing serious reservations over Julia Gillard's proposed health deal.

The Prime Minister wants the $16.4 billion agreement signed today, but all of the premiers raised concerns, saying the deal would add extra layers of bureaucracy to the health system.

The most serious objections appear to be held by Queensland Premier Anna Bligh and NSW Premier Kristina Keneally.

The official Council of Australian Governments meeting was delayed by more than an hour after a longer-than-expected working lunch.

The meeting was expected to get under way by 1pm, but the premiers and Julia Gillard didn't sit down in the cabinet room until 2.15pm.

Minders now believe negotiations could last into the evening.

Health reform was the second item on the agenda, after talks on disaster recovery arrangements.

The prime minister is desperate to strike a deal today to cement her government's reform credentials.

But Ms Bligh said there was a lot of work to be done before a deal could be signed.

“It's absolutely clear that the public hospitals of Australia are run by state governments and under this arrangement they'll continue to be run by state governments,” she said.

“That's why I want to make sure that the extra layers of bureaucracy being proposed in this model don't get in the way of delivering good outcomes and more money straight to the frontline of health.”

She said she was concerned a proposed funds-pooling arrangement, under the supervision of a new commonwealth statutory authority, would add unnecessary red tape to the system.

Ms Keneally also raised concerns about the proposed hospital funding pool.

“Is it necessary? How will it operate? How will we safeguard state funds? How do we ensure that State funds are available to the state when we need them?” she said.

The beleaguered NSW Premier said that, as the deal currently stood, there was “certainly a risk that we could have more bureaucrats in place to provide more paperwork and increase red tape”.

Under the revised offer on the table, a new independent authority would oversee the proposed national health savings pool.

Two key agencies from the original plan would also be introduced - a National Performance Authority to assess hospital outcomes; and an Independent Hospital Pricing Authority, which would determine reimbursement rates for hospitals for particular procedures.

The original health reform deal failed after objections by Liberal-held states Western Australia and Victoria.

The revamped proposal removes the biggest sticking point - that the states hand over a third of their GST in return for a 60 per cent commonwealth contribution to hospitals.

WA Premier Colin Barnett said he would be happy to sign the deal if that was all that had changed, but there were other key differences.

“The concept of a federal authority being involved in day-to-day (hospital) management I think is just untenable,” Mr Barnett said.

Victorian Premier Ted Baillieu said he was prepared to be constructive but voiced concerns about the funds pooling model and governance arrangements.

“We've had concerns about the proposed pooling model. We want to make sure the governance arrangements are appropriate, that Victoria is a part of this, an active part of it, and that there are no blank cheques in either direction,” he said.

Tasmanian Premier Lara Giddings said she was also concerned about duplication in the system.

“What we want to assure is that we have a lot more efficient health system - one that doesn't have any wastage in it, and I don't think another layer of bureaucracy is going to deliver that,” she said.

South Australian Premier Mike Rann appeared the most supportive of the proposal.

“I'm happy to sign up to something provided there's not a single dollar less for South Australia,” he said.

Earlier, Health Minister Nicola Roxon urged premiers to sign onto the new proposal, saying it offered exactly the same benefits as the old deal without forcing them to hand over GST revenues.

“I can assure each and every one of those premiers that every dollar that was in the deal that was offered in April last year is being offered and is there available in this deal today without the complicated financing arrangements of the GST that was part of the previous deal,” Ms Roxon told the Nine Network.

“I know Julia is determined to make sure that patients get a good deal and that we don't lose the momentum for health reform, and I hope that that's the attitude the premiers will have at the top of their mind too.”

Opposition frontbencher Christopher Pyne said the states would agree because the federal government had caved to their demands.

“Of course the states are signing up to it because they have effectively forced a capitulation by the federal Labor government, he told the Ten Network.

“Julia Gillard is so desperate to have any kind of win that she is prepared to abandon reform of the health sector just so that she can get something off the agenda.”