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A tale of two budgets – but only one will be heard today

The Federal Government has a strong tale to tell about the main health initiatives announced in last night’s budget. But there’s another, untold part of the story that belongs to the bigger narrative of…

The budget doesn’t address all of COAG’s key health priorities. AAP

The Federal Government has a strong tale to tell about the main health initiatives announced in last night’s budget. But there’s another, untold part of the story that belongs to the bigger narrative of health reform in Australia.

The winners

The long-term shortfall in funding for mental health services have well and truly reached public consciousness. Action was overdue and has now been taken.

Mental health initiatives take the form of $1.5 billion in new funding over five years. They cover expanded coordinated care for people with chronic mental illnesses; funding for additional psychological services and e-therapy; as well as accommodation support for people with acute mental illnesses and provisions for their re-entry into the workforce.

There’s to be a new National Mental Health Commission. This is in addition to new funding for mental health services for adolescents and young adults that some of the more vocal advocates had sought.

As part of substantial new funding for regional Australia, there is $1.8 billion over five years for regional hospitals and other health services, such as oncology and MRI scans.

With the government’s dependence on the key regional Independents for support, it would have been a very courageous decision – in the words of Sir Humphrey of Yes Minister fame – not to have funded regional health services.

The future of the bowel cancer screening program also seems assured with refunding of the existing program.

Not in first place

There’s only modest new expenditure in key areas identified by the Council of Australian Governments (COAG) in February.

These are aged care, indigenous health and dental services. Substantial aged care expenditure awaits a Productivity Commission Report while dental services will receive substantial funding but only in 2012-13 under an agreement with the Greens.

The rumoured means testing of the private health insurance rebate did not eventuate. It would have required another “courageous decision” although one unlikely to produce the dire consequences of overloading public hospitals that its vocal critics contended.

The rumoured cuts to health and medical research funding also did not eventuate. Perhaps the well-organised pre-budget campaign by medical scientists was successful here.

What’s not being talked about

There is another tale to tell that is unlikely to attract much attention today. It is whether, as we read this budget, we can form a view about the success of this Labor Government’s big picture reforms to the Australian health system.

At the February COAG meeting, Prime Minister Gillard reached an historic compromise with the states, particularly Western Australia, to modify an earlier agreement that ex-prime minister Kevin Rudd had fought for.

Embedded deep in the budget papers - so only a determined reader can discover it - is the outcome of the Rudd-Gillard governments' policy push to reform the Australian health system since Labor’s election in 2007.

The determined reader can see that it has only made piecemeal progress.

Rudd’s approach had been to try to solve the major problems existing in state health services, particularly New South Wales and Queensland.

The Commonwealth was to assume complete funding for community health services as well as majority funding of public hospital services. It would then be able to make and implement strategic decisions across state health systems.

The intention was also to end cost shifting and, more generally, the overlap in roles of states and the Commonwealth as funders and service deliverers.

These problems have bedevilled sensible health planning in Australia for decades.

In any event, the expected outcomes of the touted changes are much more unlikely now that the Commonwealth has moved to only majority funding of community health services as well as only now equally sharing funding of hospital services with the states.

Important reforms will still go ahead, with the introduction of funding in public hospitals based on the the number of cases seen and their complexity in treatment; the establishment of Local Hospital Networks; quality and performance monitoring in hospitals; and Medicare Locals.

But whatever they achieve individually and collectively - and that achievement is considerable - the measures announced in the budget last night fail to add up to major reform of the health system.

That reform has been left to wait another day.