I announce today that state and territory governments will receive up to an additional $10 billion to help them run public hospitals, as part of the Government's commitment to the 2003-2008 Australian Health Care Agreements.
The Government will provide states and territories with up to $42 billion over the next five years to support the provision of free public hospital services - a cornerstone of Medicare. This compares with almost $32 billion over the five-year period ending on 30 June 2003.
Nationally, this funding represents a 17 per cent real increase in our commitment to public hospitals over the life of the next agreements.
This is a generous package that reaffirms our strong commitment to the principle of universality under Medicare and, specifically, the availability of free public hospital treatment for all Australians who seek it.
Over the course of the current agreements (1998-2003) the Government's private health insurance initiatives have helped reduce pressure on public hospitals.
According to the latest figures from the Australian Institute of Health and Welfare, in 2000-01 public hospital admissions fell for the first time in the history of Medicare, while private hospital admissions increased by 12 per cent. In the same year, 37 per cent of all hospital admissions were in private hospitals, a significant increase on the 32.5 per cent of all admissions recorded in the last year of the previous agreements. Indeed, private hospitals accounted for over 82 per cent of the overall increase in the number of patients treated in hospital between 1997-98 and 2000-01 and they now assume a major share of Australia's hospital workload in several important life-saving and complex procedures.
The Institute also found that growth in public hospital funding provided by states and territories as a whole has not kept pace with growth in Commonwealth funding, with the state and territory share in total funding falling from 47.2 per cent in 1997-98 to 43.4 per cent in 2000-01 and the Commonwealth share rising from 45.2 per cent to 48.1 per cent over the same period.
Clearly, there is a better balance between the public and private health care sectors now than was the case when the current agreements were signed in 1998.
However, while the Commonwealth has significantly increased its level of public hospital funding over this period, up to now there has been no guarantee of what funding the states and territories would ultimately pass on to their public hospitals.
There is also evidence that the growth in Commonwealth funding has not always been matched by growth in state and territory funding. This has meant that increased Commonwealth funding for public hospitals has not always led to more public hospital services.
The latest published national data show that, from 1997-98 to 2000-01, Commonwealth funding grew by 16 per cent while the number of public patients treated in public hospitals only rose by 5 per cent. And the overall state and territory share of public hospital funding has fallen while the Commonwealth share has risen.
In order to ensure that, from now on, the Australian people benefit from increased Commonwealth public hospital funding, the next agreements will be subject to new terms and conditions.
The Commonwealth urges the states and territories to sign agreements where they: Recommit to the Medicare principles including the provision of free public hospital services; Publicly commit to a specified level of funding for the agreement period; Report on progress against this funding commitment each year; and Commit to a new performance reporting framework.
Those states and territories that deliver on these commitments and at least match the rate of growth in the Commonwealth's contribution will receive the Commonwealth's maximum contribution. Those that do not at least match the Commonwealth's rate of growth will receive 96 per cent of their share.
I encourage all states and territories to put the public interest first and to show that their commitment to public hospitals is as good as ours. Increasing their funding is the best possible expression of that commitment.
States whose spending grows at least as fast as the Commonwealth's will have more money to meet their responsibility to improve public hospital services. Those that sign agreements but do not at least match the level of growth in the Commonwealth's funding will still be provided with funding growth to increase services.
The Commonwealth will continue to provide funding at around current real levels to those states and territories that decline to sign an agreement under these new terms and conditions. This will ensure that they can continue to provide the existing level of services. By declining to commit to this new framework, such states and territories would be denying their communities significant growth funding and taking sole responsibility for providing all new public hospital services over the next five years.
I also announce that the Commonwealth package includes $253 million for a new Pathways Home Programme. Pathways Home will help people who leave hospital, particularly the elderly, to make a smooth and easy transition back home.
My government remains committed to the principle of free public hospital treatment under Medicare. The next agreements provide the states and territories with an opportunity to demonstrate an equal level of commitment.
I have today written to premiers and chief ministers conveying details of the Commonwealth's proposal.
Senator Patterson will convene a meeting shortly with state and territory health ministers to finalise details.