PM and premiers strike deal on health

THE premiers and the federal government have reached agreement on a health reform package.

THE premiers and the federal government have reached agreement on a health reform package.

Prime Minister Julia Gillard said a "heads of agreement" had been achieved, with final details still to be hammered out.

She said the deal delivered better treatment for patients and unprecedented transparency over health funding.

After marathon talks beginning with a working lunch this morning, a new national health funding pool had been agreed on, delivering a 50-50 contribution to health by the state and federal governments.

The bureaucratic arrangements surrounding the funding pool had been a key sticking point in negotiations with the states.

Ms Gillard said elective surgery and emergency treatment targets would be implemented under the deal, improving outcomes for patients.

"My bottom line was that we saw a better deal for patients and my colleagues agreed on that bottom line," Ms Gillard said.

"It will mean less bureaucracy, less waste and less waiting."

The agreement guarantees an extra $16.4 billion in new federal funding for health.

The Prime Minister said the deal would deliver more money, more beds, local control and more transparency over how health money was spent."

The deal provides for a 50-50 split of new health funding between the state and federal governments.

Ms Gillard, who desperately needed the deal to secure her reform credentials, said the agreement would reduce bureaucracy, bolster primary care and provide greater local control over hospital networks.    

"All in all, whilst I think this has been a very long day it has been a very successful outcome,” she said.  

“I think it’s a very major achievement”.

Victorian Premier Ted Baillieu said the deal was genuine and would benefit Victorian patients.

“We’re pleased to have signed up. I think this will be a substantial gain for Victoria and Victorian patients…. To have everybody on board is significant," he said.

As they went onto today's COAG meeting, almost all of the premiers warned of extra layers of bureacracy and red tape under the proposed deal.

West Australian Premier Colin Barnett, who had opposed the Commonwealth clawback of state GST revenue under the initial health proposal, said more details still needed to be thrashed out.

“Once the Prime Minister took the GST arrangement off the table, that did open the door for an agreement," he said.

“The work that needs to be done now is the detailed mechanics of the structure of the bodies to be established, and how the funds will flow and how the hospital system is to be managed.” 

NSW Premier Kristina Keneally praised the pact, saying it “secured the future of national health reform in Australia”.

The deal lowers the commonwealth's contribution from 60 per cent under an initial agreement struck by Kevin Rudd, but the states will no longer be compelled to hand over a third of their GST revenues.

Ms Gillard said the agreement had not been assured when state premiers arrived in Canberra this morning.

She hailed the new transparency arrangements, saying they would drive health improvements.

“If you look at this country today we spend tens of billions of dollars each year on our public hospitals, but we do not have good real time information that people can see," she said.

"And we do not a have good line of sight on dollars in and dollars out. We will now have that line of sight."

The deal included undertakings on elective surgery waiting lists and emergency treatment times.

Ms Gillard said $200 million in funding would be brought forward to improve key patient services.