Health (Care) reform

There is also not much mention of mental health and nothing on addressing Indigenous health status. Both are essentially a prevention problem, whose long-term solutions reside within the sphere of the cultural, social and economic determinants, well outside the health care sector.

Of course, selling prevention is politically extremely difficult as it lays outside the reach bio-medical technology. However, Julia Gillard explained parts of the deal very well on the 7.30 Report on Monday night (14.2.2010). There is no reason why she and other political leaders cannot begin to communicate with the community the real need and benefits of prevention.

Cost escalation and lost opportunities

Health care is extremely expensive and costs, as a percentage of GDP, are rising. The reasons for the escalating cost are erroneously attributed to demand side drivers including demographic change and an ageing population. This is largely incorrect. The main driver of escalating cost is actually on the supply side - the constant development of new medical and pharmaceutical technology. The rising expectations these foster in the community then serve to amplify an already rising demand.

There is no mention of addressing these in the part of the agreement on efficient cost growth. One hopes that this will be adequately tackled in the setting of efficient prices outlined in the agreement. However this (admittedly pre-Gillard) government does not have a solid track record in tackling vested interests within the medical industry.

The other problem is opportunity cost - each public dollar spent on a hospital bed or PBS prescription is a dollar unspent on schools, playgrounds or other preventive expenditure.

Likewise, each interview minute spent by the PM talking about hospital beds and Super Clinics is a minute not spent communicating the value of programs and initiatives that keep people out of hospitals.

Prevention, of course, requires expenditure of financial and political capital. In a world of scarce resources (and three year electoral cycles) it is often more expedient to talk about ‘more beds and more GPs’ than tackling the root causes of disease, which are notoriously difficult to explain to the public.

In summary, the agreement reached at COAG was definitely a win for the Prime Minister. However, it is very pragmatic and there is a lot of detail left to sort out. Most importantly, it could have been a lot better. If Julia Gillard wishes to be remembered as a reformist like her political hero Nye Bevan and mentor Bob Hawke, she would be well advised to address the shortcomings, some of which are briefly outlined above, before the next election.