I want to begin on that point, and to tell you that the AMA’s advocacy matters.
As I travel around Australia, I hear frustration about our Parliament and our politics. And in this room, I know there is frustration about the politics of health in particular.
As everyone in this room knows, health has been hotly contested since the 2014 Budget.
The cuts in that Budget – and in successive budgets – have taken us back to the sort of debate we saw in the 1970s and 1980s.
After four years of rancour, I know it’s tempting to give up the fight. To settle for the least-worst policy option. To hope and call for bipartisanship in health.
But the reality is that the contest in health reflects fundamental philosophical and policy differences between us and the Government.
These are most stark when it comes to Medicare, our universal public health insurance scheme.
And in that context, the AMA’s advocacy matters.
Your members and your patients rely on you to be loud and clear on the issues of the day.
And when you are, politicians and policymakers listen.
To give you one example – in his Budget Reply speech this month, Bill Shorten announced our most substantial investment in health so far this term.
In particular, Bill announced that Labor will establish a Better Hospitals Fund and invest an additional $2.8 billion in public hospitals between 2019 and 2025.
This investment is a direct response to the AMA’s 2018 Public Hospital Report Card.
The Report Card has become an important annual reminder of the state of our public hospitals. This year’s edition paints – in the AMA’s own words – “a bleak picture”.
The 2018 Report Card reveals that:
- Bed ratios for older Australians continue to fall, and are now at their lowest level on record.
- Emergency department waiting times have worsened, with up to half of urgent patients not seen within the clinically recommended 30 minutes.
- And elective surgery waiting times remain too long, with most jurisdictions failing to treat most urgent patients within the recommended 90 days.
The AMA highlights that this substandard performance is a direct result of inadequate funding.
You say – and I quote – “public hospitals continue to face a funding crisis – one that is rapidly eroding their capacity to provide essential services to the public”.
It’s worth reflecting on how that funding crisis has arisen.
The last Labor Government signed the historic National Health Reform Agreement with the states and territories in 2011. I want to acknowledge Andrew Pesce, Steve Hambleton and others for the role they played in its development.
Under that Agreement, the Commonwealth committed to fund an equal share of efficient growth in hospital costs – ending the blame game and giving public hospitals long-term budget certainty.
Ahead of the 2013 election, the Liberals promised they would – and I quote – “support the transition to the Commonwealth providing 50 per cent growth funding”.
But of course, in the 2014 Budget the Abbott Government broke this promise and tore up the Agreement. At the time, the Government’s own Treasury estimated that the move would cut $57 billion from public hospitals.
After a fierce campaign by the AMA – and again, I want to acknowledge Brian Owler in particular – Malcolm Turnbull restored some of this funding ahead of the 2016 election.
But the Government is still only funding 45 per cent of efficient growth, with a new 6.5 per cent cap on Commonwealth growth.
Contrary to the Minister’s claims of record funding, the independent experts say the Government’s funding formula is not keeping up with demand.
Of course we are spending more on hospitals in nominal terms. There will be five million more people living in Australia in 2025 than there were in 2015!
But as the AMA says, the 2016 funding formula is “still far short of what is needed”.
And Macquarie University’s Centre for the Health Economy – among others – points out that “spending is actually declining on a per capita basis” and warn “Australians will either become sicker or be forced to pay more for medical care”.
In spite of these warnings, the Government is now seeking to lock in this funding formula for another five years.
Between the next election and 2025, the proposed agreement would mean a $2.8 billion cut from Australia’s public hospitals.
As the AMA says – and I quote – “the current funding formula will doom our public hospitals to fail, and patients will suffer as a result”.
That’s why Labor will fully reverse the Government’s cut from 2019 to 2025 by investing an extra $2.8 billion in a new Better Hospitals Fund.
We will announce more details of the Fund in the months ahead. But today, I do want to give you a sense of our thinking.
The Better Hospitals Fund will pay for more activity – more emergency department presentations, more elective surgeries. It will also pay for more resources – more beds; more doctors, nurses and hospital staff.
But we also want the Fund to drive innovation in our hospitals.
Activity-based funding has made our public hospitals more efficient. That’s a good thing, because it allows more services to be provided within the same budgets.
But now we need to work with the states and territories to make our hospitals more effective.
We don’t pay hospitals for what they don’t do. They have no financial incentives to prevent avoidable admissions, and limited incentives to prevent avoidable readmissions.
We need to create them.
Seven years after the National Health Reform Agreement and five years after the election of the Abbott-Turnbull Government, the quality and safety agenda has also stalled.
The Government is focussed on penalising poor safety. But we also need to think about how we reward quality care.
Labor’s $2.8 billion Better Hospitals Fund gives us an opportunity to do just that, and I look forward to working with the AMA on the details of the Fund.
The 2018 Public Hospital Report Card also makes another important point: that hospitals don’t exist in isolation, and that acute care isn’t efficient or effective for all patients.
The AMA argues for “coordinated investment in all parts of the health system that will deliver better health outcomes, at the earliest opportunity”.
I couldn’t agree more.
Labor will have much more to say before the next election about prevention. About primary care – and in particular general practice, which is the foundation of our health care system. About workforce issues. About the PBS. And about health inequality, including for Aboriginal and Torres Strait Islanders.
But today I want to touch on two priorities in particular – Medicare and private health insurance.
First, to Medicare.
In recent years, thanks in large part to the Government’s Medicare freeze, out-of-pocket costs have become a significant barrier to access.
Australian Bureau of Statistics figures tell us that one million Australians delay or avoid seeing their GP each year due to cost.
And another 1.7 million people say they skip seeing a specialist.
That means we’re not upholding the promise of Medicare – universal access to care.
So we need investment, and we need innovation.
I am disappointed the Government did not take the opportunity of the Budget to end their Medicare freeze immediately and in full.
After four years, the freeze on GP and specialist consultations will be lifted in July.
But the freeze will remain in place for specialist procedures and allied health services for another year.
Even then, some Medicare items will remain frozen – it’s not until July 2020 that it will finally be gone, six years after it was introduced.
And even as the freeze is lifted, we know that the benefits of re-indexation will be marginal – 55 cents on a standard GP consultation, for example.
We also know that the Government’s freeze will have ripped more than $3 billion out of Medicare in the meantime – proving that the Minister’s claims of record funding are a lie.
So we do need new investment in Medicare – particularly in general practice and broader primary care.
Bill Shorten also announced the first of Labor’s investments in Medicare in his Budget Reply speech – a significant investment in MRIs.
Everyone in this room knows that access to Medicare MRIs is patchy, with many Australians travelling long distances or waiting months to access a machine that is eligible for Medicare.
That’s why Bill announced that Labor will grant 20 new full MRI licences.
The first 10 licences will be reserved for public hospitals, with locations determined based on evidence to the Senate Committee.
But importantly, the remaining licences will be awarded via a transparent application process under a Labor Government.
Beyond MRIs, we will of course have more to say about new investments in Medicare in the months ahead.
And as I’ve said here before, we’ll also have more to say about innovation in primary care.
An older population with higher rates of chronic disease means Australians will need more care and different types of it.
Labor’s vision is for primary care that is led by GPs, but much more integrated with other specialists, allied health, and other health providers. We also want much better coordination between primary care and hospitals.
But we are not so arrogant as to impose a one-size-fits-all model. We will develop and implement new models of care in close consultation with the AMA and others.
And we understand that the Government can’t keep asking doctors to do more and more with less and less.
In general practice in particular, innovation must go hand in hand with investment. It is my firm view that we need to reinvigorate discussion about the vision for general practice – with the discussion led by GPs themselves, as well as their patients.
So watch this space.
Private health insurance
Finally, let me turn to private health insurance.
Labor has already announced our policy to task the Productivity Commission with an inquiry into the private health system, and to cap premium increases at two per cent for two years.
Put simply, we agree with the AMA that private health insurance has reached a “tipping point” and could enter a death spiral.
Labor wants to maintain private health insurance coverage and the unique balance between our public and private systems.
So we think that the two year cap will be an important circuit-breaker in the private health insurance affordability crisis.
But we accept it is only a short-term measure.
We know that our private health system also needs long-term reforms to improve affordability and value for consumers.
That’s why Labor will task the Productivity Commission with the most significant review of the private health system in 20 years – since the then-Industry Commission’s last review.
The reality is that recent reviews and reforms – including by the Government – have barely scratched the surface of the complex private health system.
In contrast, the last Productivity Commission review led to the modern private health insurance system. Within a few short years of that review, we saw the introduction of important measures like the Private Health Insurance Rebate and the Lifetime Health Cover loading.
We should be no less ambitious for this review, and I look forward to working on it with the AMA.
I want to leave it there and take some questions.
But let me finish where I started: by saying that your advocacy matters.
Regardless of who is in Government, your members – and more importantly their patients – need the AMA to fight for universal access to world-class health care for all Australians.
I look forward to working with you on that aim in the lead up to the next election and beyond.