Speech by John August
Convenor, Abolish the States Collective4rd Shed a Tier Congress
Canberra, 24 May 2002In this talk, I'll look at where health sits in our priorities, and how we might have more participation in decisions about health. I'll also summarise the benefits of removing the states, and how this would impact health, and also review some health reforms which integrate health without state abolition.
I'll be focusing on structures and how they affect health, and I'll be trying to avoid the thorny political aspects.
Health is something of importance to us as members of the public who sometimes become Ill. Sometimes we cause our illness, at other times its an accident of fate.
But health is also of importance to health professionals, politicians and journalists. Each in their own way has an interest in health.
A health professional may wish to increase their individual profit; or rather than merely pursuing money, they may wish to increase the profile of their profession.
There's a French saying that "everyone thinks the noon day sun falls on their door", and this might also be applied to people's professions, where each one thinks theirs is somehow more vital, more important than all the others and makes the most significant contribution.
But objectively, health care professionals may work in stressful, adverse conditions, and there may be merit in their views. But how does this compare with other stressful occupations ?
Politicians will seek to put their own slant on what is going on, be it positive or negative. Perhaps it is possible they may even seek an objective assessment at times. And journalists, who may sometimes seek to inform, frequently seek only to sensationalise.
Perhaps health, regardless of whatever else, will always be an issue. For otherwise, too many journalists would be out of jobs.
And, of course, there's me. I analyse health in the context of abolishing the states, and try to demonstrate just how good it would be to abolish the states, trying also to raise my own profile along the way.
The point about this is that health has its place. Just as its possible to direct too little into health, its possible to divert too much.
Health bears on many other issues. People may become ill because of the environment. Particulates from transport, and urban choices may impact on health.
Health concerns may prevent the recycling of human waste, meaning that we spend money producing fertiliser which could have otherwise been spent on health issues. And the overall level of prosperity influences human health. Encouraging destructive behaviour such as gambling may influence health and poverty.
Occupational health and safety practices may reduce accidents; stressful work may reduce health for employees. Employment practices may therefore be of importance.
And then there is the clash of priorities. Health vs. other government spending. Spending within health : research or front line health delivery ?
Health does interact with many other issues, and that's something which needs to be acknowledged.
Ideally, a democracy makes decisions in a way the "the people" would approve of; either through representation or consultation. I'll now look at some of those decisions from a "broad brush" perspective.
A tax rate is set. From this, Government has a pool of cash.
From this pool of cash, we can broadly identify an allocation between health and non-health spending.
Within health spending, resources are divided towards things like :
This is the ideal. The reality is ... it seems our economy is under siege, and there never seems to be enough money to go around. There are other pressures for expenditure, quite apart from health.
Health expenditure has an upwards pressures from improved technology and through the aging population. There's a downwards pressure through our attempts to reduce harmful activity like smoking, alcohol abuse and dangerous driving, and technology may sometimes help to reduce recovery times by lowering the impact of operations.
But what is the net effect of these trends ? I don't know, but it seems to be broadly upwards.
This is an interesting contrast to say the computer industry, where increased technology means more results for your dollar. There's an argument that the medical industry is structured to seek expensive treatments, in contrast to the computer industry, which is dominated by price aware consumers.
I don't feel we really allocate spending according to the best priorities of the time. We use current spending as a background, with changes being made influenced by : better outcomes (sometimes), budget pressures, government bias, publicity and interest group pressure.
Then there are the states, to which money is apportioned, which then spend that money. Just how the money is spent is under one level of indirection.
There is health policy, as compared to health expenditure. Most obviously, this can be seen in health insurance subsidies. This could be seen as a strategic measure, or as a diversion of funding towards the private heath system without the need for taxation and allocation of funds.
But, it also represents the licensing of health professionals and the regulation of the industry.
So, that's the reality. Things are very convoluted. Its the background upon which I'll now consider the Commonwealth-State interaction.
This interaction makes the situation even more convoluted, as the allocation of these funds is less transparent, and therefore, less democratic.
This relationship was articulated by Elaine Thompson.
For a Government to be responsive, it must be accountable. For it to be accountable, it must be transparent. For it to be transparent, it must be understandable.
In other words, simplicity and transparency are important to democracy. Unless we can see and understand what is going on, we can't be sure that the best decisions are being made.
There is a duplication in the bureaucracies at Federal and State level, and removing that duplication would free up more money for the delivery of services. But further, the Federal public service would not need to coordinate between it and the states as it does now; this would be a big saving in the resources needed to administer health.
I've also heard from Arthur Chesterfield-Evans that there are many decisions whose only effect is to shift funding, a wasteful exercise akin to shuffling deckchairs on the Titanic. But, perhaps we'll hear more from him on that in his speech to come.
Merely freeing up more money is of course just the start. It makes life easier, but if money is mis-allocated at present, this will persist when there is more of it. It does not mean a magical solution. There will still be disagreement over regional allocations of health money, and priorities within health expenditure. But, these arguments will have a more transparent base, and democracy has a better start in finding the best outcome.
In considering how health issues are obscured through the Commonwealth-State interaction, I've illuminated how removing the states would help increase the efficiency of health delivery.
This brings up the change that ASC, Beyond Federation and other groups promote : Abolition of the States. As well as making the whole process of government more transparent, we believe there are other benefits which result from the elimination of the States. These benefits go a lot further than just health, but they obviously bear upon health as well.
An important one is the elimination of redundant bureaucracy, and a secondary one is the cost of dealing with different state laws.
Mark Drummond has reviewed this in detail, and justifies a saving of between 15 and 30 billion as a result of the Abolition of the States. I'm not planning to go into this calculation in any detail, but you can find it on the asc/beyond federation web site.
We are concerned about inconsistency in the laws of the different states. Certainly, there are arguments for a changes to approach, and perhaps even law, depending on local conditions. However, having the different states means we are victims of differences which have no rhyme or reason. Why should an article be libellous in one state and not another ? Why should something be illegal in a bedroom in one state and not another ?
There are also more dramatic cases. If a criminal crosses the state border, there are mechanisms which come into play to address that. But, if someone requires monitoring for mental health reasons, a health issue, if they cross a state border they fall off the radar. Interestingly, this sort of thing falls under the health purview rather than the justice purview.
Clearly, this is a controversial issue, where you wonder what right the state has to monitor and insist on someone perhaps taking drugs. But, if we assume there's a valid case for this, you can see that someone who is fine in the community with monitoring and drugs could become dangerous when they cross a state border.
More benignly, people across the states have little in common. The Country-City divide exists in all states and, for example a farmer in Northern NSW will have a lot more in common with a South Queensland farmer than a resident of Sydney.
This is the most apparent contrast, but many more exist.
In promoting the transfer of powers to the Commonwealth government, we seek a regional responsiveness which exceeds that which the states are able to deliver.
But, there is also a duplication in bureaucracies between the States and the States and the Commonwealth Government. In moving power to the Commonwealth government, the bureaucracies could be streamlined, and the savings resulting in improved services at the coalface of all services including health, or making them a smaller drain on GDP.
Mark has calculated $15 - $30 billion saved through abolishing the states. But, he's also looked at the health picture separately, looking at the savings in health through the elimination of redundancy in that level of the bureaucracy, at 1 billion dollars. Some vertical integration would bring this to 2 billion dollars. If we divided this money between Australia's hospitals, they'd each receive an extra 1.5 million per year. That could make quite a difference.
In addition to streamlining the bureaucracy, we streamline and simplify the thought processes along the way. We can more readily observe the interactions and trade offs we make between health and other policies, and more readily understand the nature of health employment, because everything would be happening "in the sunshine". This is the line of thought I developed earlier, where a transparent government means a responsive government.
Bureaucracies do have a natural tendency to grow. Enabling the streamlining of health bureaucracies is not all that is required - focused leadership is also necessary to ensure that outcomes are improved rather than lost though growth in the bureaucracy. But, with transparency, we hope the electorate will provide the pressure on government to ensure this takes place.
The AMA describes the Federal/State financial framework as a:
confused and tangled mess of cost and blame shifting, pointless duplication of bureaucracies, inexplicable gaps in service provision, conflicting ideologies and unresolved conflict in health policy objectives.
According to the AMA, the Federal Government gives the states a large amount of money at the start of each five year period. At first the State government syphons off the health money for other purposes, but at the end of the cycle health admissions have grown excessively, and the State Governments are skint.
A shorter "budget timeframe" is what's needed, and clearly removing the states would do this.
The AMA suggests that the Federal Government become the sole allocator of funding, with the States being providers of health services. This does not involve abolishing the states, but its clear it could be an improvement in the current framework.
I'll now consider the range of changes we could make, not just Abolishing the States, and provide a little more detail on our preferred approach.
The AMA suggest moving financial responsibility for health completely to the Commonwealth government, with the States delivering health through contractual agreements with the Commonwealth Government.
This would be an improvement. However, our preferred option is to remove the States, and have the C'wealth Govt. administer health funds directly to bodies below the C'wealth.
How would this be implemented ?
There will be the direct scrutiny of the C'wealth Parliament and bureaucracy. But, we also desire involvement/scrutiny and scrutiny at a lower level.
The Public Health Association endorses area management, where the managing agency has responsibility for the health, health care and personal care services of, and is accountable to, a defined population group. This does not require the elimination of the states, but its clear to see how it fits in with the abolition of states.
If we have regional governments, the regional government might take over the total administration of health in that region. If we have smaller local governments, the local governments may elect representatives to sit on the administrative board covering that council.
In this way, the health system would be responsive to differences in conditions across Australia.
That about wraps it up. I hope you can understand why we feel that streamlining the Commonwealth-State interaction would be a positive thing, and in particular, how abolishing the States would be worthwhile.