PM 'sidelining' states on health

JULIA Gillard's $16.4 billion deal to reform the health system is in strife.

JULIA Gillard's $16.4 billion deal to reform the health system is in strife, amid claims that proposed legislation putting it into effect does not reflect the Prime Minister's reform deal with the premiers.

Western Australian Premier Colin Barnett has accused the commonwealth of attempting to sideline states under the reformed health system, in contravention of a deal sealed in February.

While Health Minister Nicola Roxon has played down the concerns, the Australian Healthcare and Hospitals Association has backed Mr Barnett, warning that the legislation fails to recognise the role of states and territories as managers of the health system.

Opposition health spokesman Peter Dutton seized on the claims last night to accuse Ms Gillard of producing a policy disaster. "With all her other failures, Julia Gillard wanted people to believe she had brokered a deal on health," Mr Dutton said yesterday. "Instead, it's turned out to be another dud policy of Gillard Labor."

On February 13, the Council of Australian Governments agreed to a deal under which the commonwealth would boost health funding to the states by $16.4bn in exchange for their agreement to absolute transparency about how they spent federal money. Under the deal, the commonwealth would create an independent authority - the National Health Performance Authority - to monitor the performance of hospitals against objective performance criteria.

Former prime minister Kevin Rudd was unable to win support for an earlier reform package because states felt they would be sidelined under his proposal for Canberra to be the majority funder of health services and to provide funding direct to regional authorities, to be known as Local Health Networks.

According to Mr Barnett, Ms Gillard's legislation setting up the new NHPA does not reflect the COAG agreement with her. "I believe the commonwealth has gone beyond what is contemplated as the role and function of the NHPA in the heads of agreement I signed at the COAG meeting on 13 February, 2011," Mr Barnett says in a submission to a Senate committee examining the legislation. "The bill undermines the states' and territories' role as system managers with the potential to significantly disrupt and destablise the on-the-ground operations of the states' hospitals and health services."

A submission by AHHA executive director Prue Powerechoes this, arguing that the legislation fails to recognise the role of state and territory governments as majority funders and system managers of public health services. Ms Roxon said she was continuing to implement the health reforms with good co-operation from states including WA and hoped to resolve the concerns through amendments to the legislation.

"We had always said that we would be willing to consider amendments to make sure that we have an authority that will deliver the best outcomes for Australians," Ms Roxon said.

"We will ensure that the authority maintains an independent role in assessing and reporting the performance of health services."