Secretary General's Report

US President Barack Obama has told Americans that their government is letting them down. He casts the resistance to his health reform agenda and other issues as ‘the system' attempting to control what the people want. Apart from being a handy line in times of challenge, this also plays to the politics of change - ‘the system' needs to change in the interests of the country.

One could be excused for seeing parallels with Prime Minister Rudd's early promotion of his health reform changes. Although his first announcements are primarily concerned with recasting the funding arrangements between the Commonwealth and States and Territories, the PM has not missed the opportunity to define resistance to his plan as being fuelled mainly from high-level bureaucrats threatened by the change. Moreover, the PM is running a similar Obama line: that the people want change and so too do those working in the public hospital system.

If recent public opinion polls are any guide, the Prime Minister may be on to something. Polls show that his reform proposals are popular - up to 58% support the change and only 12% oppose them outright. Needless to say, the unwritten text is that the community may have lost confidence in the capacity of bureaucracies to run the hospitals. 

So, all of a sudden, the health reform agenda is about wresting control from bureaucracies and devolving power closer to where the services are needed and provided. Both the Government and the Opposition have sensed this mood shift. Through either the Government's ‘local area health councils' or the Opposition's ‘local hospital boards', local communities are more likely to be engaged to some degree in how their health services are organised. This change will resonate with the public.

Public hospitals are consistently presented as being under-resourced and intolerably pressured. Governments of all persuasions and at all levels constantly shift the responsibility to ‘fix the problem'. Now both sides of Federal politics want to extend the responsibility to local communities in an attempt to lock these communities into the political consequences of funding and resource limitations. This tactic is futile, as local structures have the potential to ferment discontent as much as they can muster support for government programs.

However, the more significant question is defining the audience for the health reform debate. In 2007, Kevin Rudd said he would ‘fix the hospitals'. He was appealing squarely to an electorate that thought the hospital system was broken. Now, during his first term, policymakers, academics and senior public servants have largely controlled the health debate. These ‘insiders' necessarily focus on the technical changes that the system requires. Whether or not the allocation of funds and the planning of services could be better synchronised. Whether or not the measures used to gauge performance of hospitals and professionals can be applied to improve efficiency. Whether or not removing incentives for alleged over-servicing will better distribute resources from one service to another. 

These are all technically pertinent questions but they will give little succour to a community baying for change as it faces overcrowded hospitals and over-stretched general practices.

Reform proposals were always going to pitch one level of government against another. This inevitable battle goes to the heart of the problem: how to allocate scarce public resources.

Obviously, no level of government goes out of its way to waste resources. Clearly, health bureaucracies at all levels try to balance constrained budgets with meeting rising demand for services. They become easy political prey when things go wrong. But they do run the risk of making decisions too removed from the practicalities of service provision. Thus the need for devolution of decision-making. At least this much appears to be registering at the political level.

Doctors know what can work for patients. They also know what gets in the way. The trick will be to liberate clinicians to make decisions that place the patient's interests first. This is far from being a new challenge. It is actually the dilemma in allocating scarce health resources. 

Our system may be at a point where decision-making from afar has run its course. It is definitely at a point where the serious culling of unnecessary bureaucratic checks and balances can give way to releasing extra resources.

This is stage one of health reform. Unless it is genuinely tackled, the rest of the reform program will suffer.