PM unveils country hospitals plan change

Kevin Rudd has announced a change to how country hospitals will be funded, the one
part of his hospitals plan that's been heavily criticised.
The prime minister announced earlier this month he wanted to fund public hospitals
for each service they delivered rather than via unconditional block grants.
But country hospitals with unpredictable or small workloads say such a funding
formula won't provide them with enough cash to stay open.
Mr Rudd moved to quash that criticism during Tuesday's televised health debate with
Opposition Leader Tony Abbott.
"Activity-based funding would take into account all the local costs in rural areas
and the rest to make sure it works," he said.
"But if that doesn't, then of course we'd look at a form of national block funding
which was able to underpin the continuation of smaller rural hospitals in the
future."
An independent umpire will determine whether country hospitals should receive
activity-based funding, block grants or a combination of both.
Mr Abbott also released a new policy on Tuesday, revealing he'd fund an additional
3,500 public hospital beds if elected.
"The coalition is considering effective ways to give public hospitals right around
Australia the extra 3,500 beds that experts say they need to clear emergency
departments and to shrink waiting lists," he told the National Press Club in
Canberra.
The Rural Doctors Association of Australia welcomed the news that block grants would
remain in place for some smaller hospitals.
"The government has said it will be flexible in how the funding occurs," president
Nola Maxfield said.
"That eases some of our concerns."
Dr Maxfield said in Victoria - which already has activity-based funding - some 44
small hospitals relied on block grants to survive.
Doctors' lobby group the Australian Medical Association also praised Mr Rudd's
change of tune on funding.
"It was probably inevitable but it hadn't been said before," association president
Andrew Pesce said.
"It gives us much more reassurance that there'll be appropriate funding so small
rural hospitals can continue to deliver services."
Hospital funding expert Jim Butler says the Rudd government has extricated itself
from a policy bind.
Activity-based funding will force hospitals to become more efficient, he argues.
But it wouldn't work in country communities because a complicated liver transplant,
for example, could cost more than the average funding price.
"Bigger hospitals can bank on the law of averages to see you out on the longer
term," the director of ANU's Australian Centre for Economic Research on Health said.
"But small hospitals could find themselves in a boom or bust situation according to
the traffic that flows through their door."
During the health debate, Mr Rudd also promised Labor had "no plans" to make changes
to the private health insurance rebate beyond its already-announced means test
(which has been defeated by the Senate).
The prime minister said Labor was yet to decide whether it would support a universal
dental scheme funded by increasing the Medicare levy.
Aged care was only touched on briefly, while mental health was ignored altogether.
The AMA's Dr Pesce says more policy detail is needed from both parties before the
election is called.
"Once you enter the campaign mode it's difficult to have good public discussion," he
said.
"And health is too important to just become something that's part of the political
process."
Dr Maxfield was grateful for the additional policy detail announced on Tuesday but
argues "there wasn't a lot of new information".
It was too easy for any debate on health to turn into a sledging match rather than
constructive dialogue, she said.