Billions 'wasted' in health system: report

KEVIN Rudd's hand-picked health reform adviser has warned that Australia is wasting much of the $94 billion it spends each year on health services and will not be able to afford even the current, flawed system without major reforms.

The Prime Minister's National Health and Hospital Reform Commission will publicly release more than 120 recommendations in Canberra today, handing the government a blueprint for change, but allowing for "long-term" implementation that pushes the most politically sensitive reforms beyond the next election. Among its recommendations will be taking responsibility for some health services away from the states and giving it to the commonwealth.

The commission, set up early last year to help redesign Australia's health system, will warn that healthcare services, already under strain, will be swamped by the rising tide of chronic illness, an ageing population and costly new health technologies.

The commission urges governments to build stand-alone elective surgery hospitals and set new performance benchmarks requiring most operations to be performed within three months and emergency patients to get treatment within minutes. It also urges the creation of a Denticare scheme, paid for by a 0.75 of a percentage point increase in the Mecicare levy.

The commission's final report cites figures indicating Australians are forgoing two years of life because of waste and duplication in the health system. Errors are also taking a human toll. "The number of adverse events each year (is) equivalent to 13 jumbo jets crashing and killing all 350 passengers on board," it says.

Australia could save $1bn in healthcare costs by preventing just half of these mistakes. Better care in the community, through general practice, community health centres and other frontline services, would also eliminate the need for 700,000 hospital admissions a year.

The current health system is "unlikely to be sustainable without reform", the 10-member commission argues.

It wants financial responsibility for key health and aged care services to be shifted from the states to the commonwealth.

The Prime Minister promised before the 2007 election that he would "end the blame game" by wresting financial control of public hospitals from the states if they failed to lift their game. He set a deadline of the middle of this year to take the issue to a referendum, but has stayed silent ahead of the release of the final NHHRC report.

Two of the commission's interim reform options, released late last year, proposed a more ambitious federal takeover of all state-run health and aged care services. But the final report is widely expected to opt for a more manageable transfer to the commonwealth of primary health services, such as child health clinics and drug and alcohol services, as well as hospital outpatient services.

Even such a comparatively modest reform would have to be phased in beyond Mr Rudd's current term since it could cost the states $3bn in funding, according to the commission's interim estimates.

The move would be a first or transitional step towards a more dramatic restructuring of responsibilities, involving $4bn in state-run health and aged care services.