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Lesley Russell: How the bean counters beat the policy wonks

Dr Lesley Russell, of the Menzies Centre for Health Policy, has been analysing what the budget means for health policy and finds it lacking:

The exigencies of the global financial crisis and its consequences always meant that the 2009-10 budget was going to be more about targeted new spending and lots of budget cuts in current programs, but such times can offer a unique opportunity to refocus and recast old policies and spending to achieve better value and better outcomes.

The drive to do this has never been greater. The Rudd Government has yet to deliver on the substantial reforms promised to tackle the prevention and better management of chronic diseases, to provide the outreach, team work and coordination that is needed to ensure physical and mental health and wellbeing, and to address the inequalities and inequities that are inherent in the current system.

However an examination of the health budget shows that this opportunity has been missed.  The bean counters clearly won out over the policy wonks, and to the extent that new policy is made, it seems that this was done by Finance and Treasury, not Health.

This is demonstrated most obviously in the proposal to means test the private health insurance rebate.  While this was aimed at reining in expenditure, which now is almost $4 billion annually, increasing the Medicare levy surcharge to help persuade higher income earners to continue to purchase private health cover takes steps (deliberately or inadvertently) towards new policy about the role of the private system in health care.

In effect, this proposal presages the Government’s response to the financing reform recommendations that will be in the report from the National Health and Hospitals Commission (NHHRC), due next month, but currently still being written.

In fact there are a number of reports on health reform from advisory bodies due within the next few months.  However, there are no measures in the budget to provide the resources that will be needed to facilitate analysis and implementation of the recommendations from these reports from the NHHRC, the National Preventative Health Taskforce, and the National Primary Health Care Strategy External Reference Group.

The budget does have some welcome new spending, most notably on infrastructure for health services and research, the provision of new maternity services led by midwives, a new rural health workforce strategy, and to allow nurse practitioners access to Medicare items and prescribing rights.

There is $232 million to initiatives to help close the gap in Indigenous health, although the majority of these funds will go to the Northern Territory.  Despite the huge unmet need, Indigenous health programs are not immune from budget cuts, losing $25 million.

The total spending in health over the five years 2008-09 to 2012-13 is $4.7 billion.  This includes spending on Indigenous health but does not include aged care or sport and recreation.  New spending, $3.0 billion of which is from the Health and Hospitals Fund for infrastructure, is off-set by savings totaling $3.3 billion.

Analysing the 2009-10 health budget and tracking the funding commitments is particularly difficult exercise this year.  The budget papers and portfolio budget statements provide a lot of information, but nowhere is there a statement about the total amount of new spending or the total savings made from current programs.  Funding commitments are bolstered by constant references to funding already provided through the Council of Australian Governments (COAG) and to funding commitments that extend well beyond the forward estimates.

Last year the raft of budget cuts were gathered together under the rubric of ‘responsible economic management’.  This year the euphemisms are about ‘modernising Medicare’, ‘improved targeting’ or ‘further efficiencies’.

Realistically, substantial new spending was never a realistic possibility for this budget, and in many ways, the health budget is better than might have been predicted on the basis of new funding commitments.

However, the failure of this budget to link the need to make savings to health policy reforms  – for example, to not just redress the blow-outs in the cost of the Medicare safety net and the Better Access mental health program but improve the functioning of these programs and the health of patients –  means that inevitably it must be judged harshly.

At budget time next year, with an election looming, the Rudd Government may lament this wasted opportunity.

• This article first appeared in the Canberra Times and is republished with Lesley Russell’s permission

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