Commonwealth health budget bulletin - November 2008

27 Nov 2008

The Rudd government has two stated goals in health policy: to end the cost shifting and the blame game between the Commonwealth and the states and territories, and an increased focus on prevention and primary care in order to address the predicted impact of a growing burden of preventable chronic illness on acute care costs and resources. Good health policy is seen as part of good economic policy. The aim is to see measurable improvements in a range of health, economic and budget indicators over time. While it is too early to judge how successful the new government has been in meeting these outcomes, it is possible to assess their actions and funding commitments to this point against the stated policy.

The Mid-year Economic and Fiscal Outlook shows that the government has clearly set out the new structures and formulas for payments to the states and territories for the delivery of acute care services through public hospitals and the provision of a range of public health services. However in the prevailing economic climate and the absence of final reports and recommendations from advisory groups on policy reform, there is little to suggest that the new Australian Health Care Agreements, due for signing before the end of 2008, will drive significant changes in the delivery and funding of health care services. In particular, MYEFO does not indicate any possible changes in responsibilities for areas such as preventive health, mental health and aged care and disability services.

While allowance should be made for consultative and review processes currently in train and the current restrictive budgetary climate, lack of action in these important areas calls into question the government’s commitments to: make mental health and prevention central aspects of health care; the ability to sustain planned reforms in the acute care sector; and support for equity in the delivery of health care services.

January 2009: Macroecomomics has provided an addendum (0) to this document that considers the policy and budgetary implications arising from the COAG meeting on 28 November 2008 which reformed the Special Purpose Payments framework, including payments for health.

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