• James Gillespie

05 March 2010Kevin Rudd’s hospital plan kicks off what looks like being a long battle, writes James Gillespie in Inside Story

ELECTED with sweeping promises to fix the ailing health system, Kevin Rudd’s announcement of plans for a National Health and Hospitals Network is the first instalment of major structural change. While short on detail, the National Health Reform Plan focuses on the funding and governance of public hospitals. It proposes a sweeping increase in Commonwealth financial responsibilities – but far short of a complete takeover. It calls for a fundamental change in the way most hospitals are paid, increased scrutiny of the quality of the services they deliver, and a radical decentralisation of management and accountability. The Commonwealth currently funds most primary care through Medicare; under the plan it would assume financial responsibility for other primary care services such as hospital outpatient clinics and community nursing. These transfers of some state funding responsibilities would require a claw back of a third of the GST revenues currently guaranteed to the states.

The outcome of the deliberations of the National Health and Hospitals Reform Commission and the hundred-odd public consultations which followed, the plan makes large claims about setting in train a revolution in health care management, declaring that it will end “blame games,” set hospital finances on a sustainable footing and relax the centralism that has undermined accountability, morale and some of the public trust in public hospitals.

Few of its measures are bolts from the blue...

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Photo: Department of the Prime Minister & Cabinet