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    A bureaucratic temptation: shame other bureaucrats, create new bureaucracy

    Dear Prime Minister

    Sadly, it does appear that you may need to re-think your strategy.

    Yes, it is a great idea to have a single funder of health care. Does it have to be Commonwealth though! Why not give whole funding bucket to another funder – even to States, or to the local government. They might actually have systems to deliver, and can get the job done. You wanted decision with the local community, local clinicians and Local Hospital Network, isn’t it? Why centralise the system even further.

    Yes, what a good idea to have singular responsibility for funding and policy for GP and primary health services. But, why not a singular responsibility for funding and policy for entire health care? It does make sense you know – not to keep the primary and secondary care systems fragmented. I thought you were concerned about cost shifting. Perhaps with your preoccupation with cost shifting between Commonwealth and States, you seem to have forgotten that the problem is cost shifting between primary and secondary care systems not commonwealth and states. Will it change – certainly not. Have you eliminated moral hazard – definitely not.

    You do think handing control to Local Hospital Networks will enable gains in technical efficiency and allocative efficiency. I know you have given the reason over and over again – by pointing a finger at us and saying – “Let me tell you one thing, it will, because I said so”. It is good to look around. There are many countries that have tested and tried these models, had Boards and disbanded Boards, had small health services and amalgamated these to make larger planning and funding units. Why – to eliminate waste and duplication of effort, local politicking and bickering, to minimise inconsistencies and you want to have Local Hospital Networks for each hospital.

    So, having an arrangement for commonwealth to make a 60 percent “efficient price” allocation will be an incentive for states to also limit funding Local Hospital Networks to 40 percent of “efficient price”. What a great idea! Why wouldn’t states accept it, it is such a wonderful idea. Moreover, states shouldn’t worry about carrying this risk as there is no additional risk other than what they are carrying anyway. They have been trying hard for years to make the system more efficient and control costs. How foolish – why did they not think of Kevin’s solution – Give the funding to Kevin and he will pay 60% of efficient price and you pay the rest of it, even if the system becomes more inefficient and costs of maintaining Local Hospital Networks blows out in your face. It is so simple.

    Can I suggest that if a question is asked about health reforms, you ask your staff to reiterate the following points:

    Do you know why this reform will drive major improvements in service delivery? Because, the Government will dismantle the system in the name of building a new health and hospital system for the future. The “new” health and hospital system actually does not need anything more than a new pricing and funding arrangement. These state bureaucrats sitting in central offices are fools. Quite rightly they should be sacked. Bring in the Commonwealth bureaucrats. It just needs efficient pricing and going back to local Boards and every thing will just work out for the better. Introduction of similar systems has helped curb the cost of health care in the UK. Total NHS expenditure did multiply by three times in 5 years. I guess could have been worse.

    Do you know that the National Health Reform Plan will work. Why – because Kevin says on Page 2 that the Government has already delivered. What has the Government delivered – “a record funding for public hospitals, increased number of elective surgery procedures, taking the pressure off emergency departments and a record investment in training more doctors and nurses.” Be aware, some may think it was the pricing system and changing the funding arrangement that Kevin was delivering, not “record funding”. Just need to media manage this fluffal!

    Do you know, our rates of hospital admission are much higher than that in comparable counties. What have these silly state bureaucrats been wasting all this time mapping processes, changing culture, introducing innovations in clinical practice, implementing evidence based practice, etc. Just threaten them with efficient pricing and they will start behaving. In any case, if they don’t, we can blame the Local Hospital Network. They can sack the CEO or even get rid of the network, for all I care. If that doesn’t work, we’ve got it sorted anyway. Not our problem anymore! It will be a problem that states’ and territories’ will need to sort out. After all they’ll be paying anything over and above efficient price.

    You don’t understand, as Kevin has said “without reform, these challenges will put governments around the country under increasing fiscal pressure, add to the workload of already stretched staff and lead to longer waiting times”. Clearly, we can’t put governments under fiscal pressure, definitely can’t make staff work and waiting times look really bad as that makes it look we don’t know what we are doing. Never mind the patients, they will find somewhere to go. Kevin as clearly said on Page 2 “In implementing its reform, the Government recognises the importance of continuing the role the private hospitals and other private health care providers play in delivering strong health outcomes.”

    Did you not realise, “sustaining funding model of health and hospitals – must involve reform of the nation’s finances.” That’s it. You just needed an accountant to run hospitals. You silly clinicians, don’t you understand if we haven’t got thousands of politicians and bureaucrats on Local Hospital Networks to sort out all our funding woes, a few of you won’t be able to do anything anyway.

    Lets talk about problems with our health system today. The system isn’t prepared for future challenges. You clinicians and health bureaucrats haven’t got a clue that the population is ageing, growing, there is burden of chronic diseases, new technologies are expensive, we haven’t got enough people in our workforce, system is fragmented, poorly coordinated and so on. As Kevin says on page 4 “New arrangements that fundamentally change the way hospitals are funded and run are needed to ensure additional hospital capacity, greater efficiency and better services.” Now, no one should doubt that, changing the funding arrangements, adding another layer of bureaucracy at the Local level and having local politicians rather than state politicians, is the answer. They can fight it out at local level. At least no one will be blaming commonwealth bureaucrats or politicians. As Kevin has said about a whole lot of his number one priorities, his number one priority is to pay “efficient price.” Now, don’t even try to blame him if the efficient price is not right. Blame that silly, bureaucratic independent pricing commission that set that inefficient price.

    Do you know that cost of providing health care is continuing to increase. Even Kevin has suddenly realised, in the last five years public hospital expenditure has grown at an average of close to ten percent per year. If we take the GST bucket from the states and give you exactly the same amount of funding, but now from the commonwealth, that will magically make funding sustainable. Why – because this is an election promise, that Kevin must deliver.

    Did you not know why there is so much inefficiency and waste in our health system. This is because “the Commonwealth Government currently funds states with block grants for public hospitals” and I am not blaming anyone but as Kevin said, “Part of the problem is overly centralised and bureaucratic administrative arrangements for hospitals in some states, which sap the innovation and drive of local clinicians and managers and reduce incentives to improve performance.” Again, I am not blaming anyone but do you also know that the problem is that there is not enough local or clinical engagement. Real technical efficiency will be gained not by improving our systems and processes, removing waste and double handling, duplication of care delivery between primary and secondary care systems but “by appropriate clinician and community engagement concerning service mix and delivery options.”

    Yes, Prime Minister


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