Congratulations to the Royal Australasian College of Physicians for organising this prestigious World Congress here in Melbourne.
I want to begin by recognising the absolute importance of the medical profession to this country's future. We have one of the finest medical professions in the world, albeit a profession currently under great pressure. When we look across out nation and recognise how well we are served by our doctors, by our nurses, by our specialists, indeed this is a good country to be in, but it is a profession under great challenge.
It is also a profession where Australian families are so critically dependant. Every year, almost 87% of Australians see a doctor, with over 286 million services provided. This includes 111 million GP attendances and 22.7 million specialist attendances. This means our medical profession in busy indeed. The challenge we all face is to make sure that this profession in appropriately supported for the future.
But what I'd say, personally, to each one of you who represents a profession from both at home and abroad is how much we, in the Australian Government, appreciate your professional expertise. There's nothing more fundamental than a properly functioning health and hospital system and within it a medical profession whose standing in the community remains high and a profession in which the community places legitimate and continuing trust.
Can I also say, when it comes to physicians themselves, I also have some appreciation of the role that you play within hospitals. Yes, I've watched most of the editions of ER. I do know that surgeons play a critical of the role within hospitals. I also understand that physicians have a role to play as well, which is, some would say, equally if not more critical.
I'm a Prime Minister with extensive medical experience myself - I've worked for nine months as a wardsman at the Canterbury hospital in Sydney. You laugh - can I tell you that on those occasions I remember being told what to do much more by physicians than by surgeons and can I just tell you also I'm sure I deserved it as well.
For those of you who've come from abroad, welcome to Australia and welcome to this great and truly international city of Melbourne. You are welcome guests in this city. You are welcome guests in this country. I'm not a native of this city, so I say it with complete Australian objectivity - this is a truly wonderful city and my only caution or advice to you of those of you who have come from abroad who are choosing to drive while you're here in Melbourne: if you see a sign which says you can turn right by veering left, I suggest to you take appropriate council from one of the locals, pause briefly and pray.
As you will be aware from developments over the last several days, including in the last few hours, health debate and health reform debate is critical right across the world, most particularly, at present, in the United States. Like America, Australia is engaging in a crucially important debate on the future of our health and hospitals system.
Ours is a different debate to America's.
For almost three decades Australia has already benefited from a universal health care system. The establishment of Medicare is one of the proudest achievements of the Australian Government of the 1980s, and it has provided high-quality health care for the Australian people, but 30years later, our health and hospitals system is again under pressure and facing new pressures.
Only a few months after coming to office two years ago, the Government commissioned the most comprehensive review of our health system in 20 years. That report prepared by Dr Christine Bennett and members of the National Health and Hospitals Reform Commission concluded that the health and hospitals system would not be able to cope with the escalating challenges in the future. These challenges include:
* the ageing of our population;
* the explosion in chronic diseases;
* the proper planning for our medical workforce;
* the cost of medical research and its clinical and pharmaceutical application; and
* consistent with challenges facing policy makers right across the world, how do you go about funding the system sustainably into the future?
As our health reform Commission said, in its report, the Australian system is at tipping point. For the system to be truly sustainable and to provide first -class health care for all Australians into the future it a system which must be reformed. That is why the Australian Government has committed to the most sweeping reforms to our health and hospitals system since the introduction of Medicare.
These reforms are ambitious. These reforms are long overdue. The time for incremental change has long past.
We propose a new National Health and Hospital Network that is funded nationally and is run locally.
For the first time in the history of our country, the Australian Government will take on the dominant funding responsibility for the entire public hospital system.
For the first time the Australian Government will taken on the dominant funding role for all hospital services including their recurrent needs, their capital needs, their equipment needs, their teaching needs and their training needs.
We would take on the responsibility for the full funding and policy responsibility for GP and health care services.
We would set national standards and require transparent reporting for the health and hospital system nationally.
We would devolve responsibility for public hospital management to Local Hospital Networks - run by clinical management, as well as financial professionals and health management professionals.
We would pay Local Hospital Networks directly for the services they provide through nationally consistent activity based funding, and to fund the above, we would dedicate around one third of the Goods and Services Tax, the Australian consumption tax, to provide a sustainable funding base for the health and hospital system for the long-term future.
Reform now may be fine - ensuring that it is financially sustainable in the long-term is equally critical. As I said before, the time for incremental reform has long passed.
The Australian Government's decision to take on the dominant funding role for the entire hospital system is also designed to deal with waste and duplication and overlap between those between the two levels of government. This can be done by properly integrating the various arms of health care, from preventative care, through primary care, through hospital acute base care, to post-acute care, to aged care. This is a better outcome, therefore, in terms of coordinated care for patients but also a better use of the taxpayers' dollar as well.
We believe these reforms are necessary for the future. However, for these reforms to have effect they must also deal with the challenges that face our medical workforce.
For too long the future needs of our medical workforce have not been properly planned. The time for change has well and truly come.
Last week, I announced a $632 million investment in training additional medical specialists - more than 6,000 more doctors over the next decade ahead.
The Government inherited a situation where 6 in 10 Australians lived in an area where there were shortages of available doctors.
According to the Health Department, just to maintain current levels of services as far as GP and primary care services are concerned, it is estimated that an additional 3,000 GPs will be needed by 2020.
In addition, the Australian Health Workforce Advisory Committee and medical colleges indicate that there will be a shortage of around 1,280 specialists over the course of the next decade as well.
Rightly, there's been much focus on GPs, as we know that they are the frontline of care. The package that the Government has announced will double the number of places available for medical graduates to train to become GPs from 600 when the Government took office to 1,200, starting with an increase of 900 for the years immediately ahead.
Importantly for physicians, we are also doubling the current number of places available for medical graduates who undertake training to become specialist doctors and providing that in private, community and rural settings, increasing the number from 360 in 2010 up to an annual figure of 900.
Given the nature of a gathering such as this we're not simply talking about an addition to the number of specialist training places beyond public hospitals. I emphasise again what I said before - for the first time in the country's history, the Australian Government will be taking on the dominant funding role when it comes to the teaching and training functions of our public hospital system as well. We are, therefore, serious to get the workforce planning challenge right.
As I announced three weeks ago, we will be taking our plan to the States and Territory Governments when the Council of Australian Governments meets in April. In recent days I have been having discussions with the various State Premiers and Chief Ministers, and Nicola Roxon with the Health Ministers of Australia in the States and Territories. Our message to them has been very simple: work with us, work with the medical profession - who want reform, work with the nursing profession - who want reform, and let's get this reform done.
In partnership, we can deliver better health and better hospital services for working families right across Australia, but if the states and territories choose not to sign up, then we will seek a further mandate from the Australian people by or at the next election in order to give the Commonwealth the powers necessary to implement these reforms.
As many of you will be aware, tomorrow I will be debating the future of our health and hospital system with the Leader of the Opposition. This is an important debate.
I welcome the opportunity of putting the Government's record in its two years in office and its plans for the future on the table and to do the same with the Leader of the Opposition - his record, 12 years in office, 5 years as Health Minister and his plans for the future as well.
In fact, my opponent, Mr Abbott, was one of Australia's longest serving Health Ministers - in fact, as Health Minister for twice as long as the current Government has been in office.
I welcome giving Australians the opportunity to scrutinise not just our respective records on health and hospitals, but also our plans for the future as well.
The entry point for a debate such as this is to have a fully costed, fully funded policy for the future - a fully costed, fully funded health and hospitals policy for the future.
The Government is clear and I look forward to debating, very much, my political opponent's fully funded and fully costed policy as well.
In politics, as in any other walk of life, it is easy to criticise everything and to propose nothing and that goes for the health and hospital policy debate as well.
Given the centrality of health and hospitals for the future, this will be a dominant debate between now and the next election, and so it should be and I look forward to the opportunity, at any place, at any time, to debating the future of our health and hospital system, because this is such a central debate for our country's future.
Because of entrenched opposition, both at the federal political level and in some cases at the state bureaucratic level, the Australian Government's proposal for a National Health and Hospitals Network is likely to encounter considerable resistance.
Nonetheless, the Government will not be deterred, because Australia can no longer tolerate delay on these urgent reforms.
The Government has been encouraged by the level of support it has received from the profession and from the community.
Of course, there's a wide range of views on the details of the reforms. That will be the case with an area as complex as the health system, but the overwhelming message that we're hearing from experts, from business and from those on the front line of health care is that this is a good plan and let's just get on with it.
The President of the AMA has said that the policy is a credible response to the problems and deficiencies in the public hospital system and is evidence that there has been considerable consultation with patients and doctors. The Federal Secretary of the Australian Nursing Federation, Ged Kearney, has said much the same.
The Australian Health and Hospitals Association has described our plan, as I quote them, "a workable, well thought out plan for the health system."
The Royal Australasian College of Surgeons has said that:
"An advocate of single source funding for Australian public hospitals, the College believes such a proposal would add transparency to a system which has been too easily manipulated in the past."
These remarks and others like them from professional bodies within the health profession right across the country demonstrate a wide consensus about the need for reform, about the need to end the blame game and the need, simply, to get on with it.
It is time now that as a nation we undertook this fundamental reform.
As I said at the outset, the National Health and Hospitals Network would be funded nationally and run locally, with the Australian Government becoming the dominant funder of the Australian public hospital system for the first time in our history.
As many of you will be aware, the Australian Government undertook health forums in the middle of last year to engage with clinicians, patients and the wider community about the future of our health and hospitals system.
There were more than 100 public hospital forums held across the nation, in every State and every Territory. I personally attended 21 of these - at least one, and sometimes more, in each State and each Territory.
One of the clearest messages I've heard was that too many of our local clinical leaders are not adequately involved in decisions about the delivery of health and hospital services in their local communities, where they invariably know best. That is why we will be establishing Local Hospital Networks, to coordinate and plan the delivery of a comprehensive set of services within a recognised community of interest.
The Networks will comprise small groups of hospitals with a geographic or functional connection. Functional often, invariably, with a relevant tertiary hospital, but which are large enough to operate efficiently and provide a range of hospital services within the network itself.
These are not individual local hospital boards.
Alongside the need for greater involvement from local clinicians and local communities in running our hospitals, the overwhelming view of clinicians is that we must deliver health services in a coordinated way.
Where health care is tailored to the patient, there should be proper coordination across primary, across acute and across post-acute settings.
The present system sees too many patients being shunted around between self-contained systems or silos, one controlled by the State, the other by the Federal, or sometimes an ungodly-cocktail of the above. Patients themselves often fall in between the cracks.
The integration of services that will be facilitated by Local Hospital Networks is critical at a time when there is a much greater range of health services being delivered. It is also critical to dealing with the rise of chronic disease where patients have a much more and complex set of needs which they need to rely upon across hospitals, community settings and in their own homes as well.
For patients, there is a widespread sense of exhaustion, of being run around from one health service to another because of the lack of coordination and care within our system.
If we were to return to the days of individual local hospital boards, rather than integrated local hospital networks we would have a recipe for even greater fragmentation of our health and hospitals system: hospitals fighting against each other for resources; patients with more complex needs getting second-rate care and not getting the full range of services they need.
At the other extreme, there are proponents of very large health areas and health regions which are often too remote from local needs. Simply put, regional health services are not capable of tailoring services to local needs and often stifle local innovation and flexibility which is capable of improving health services on the ground in local communities.
By contrast, we argue that by establishing local hospital networks we will provide a much greater role for local clinical leadership and respond to local needs while at the same time having sufficient critical mass to deliver a range of services in a properly coordinated manner.
The second key area of the Government's plan is to pay local hospital networks directly for each service they provide rather than simply providing block funding grants to the States.
Under the Government's plan for the national health and hospitals networks, which we have clearly explained in the relevant documentation produced a couple of weeks ago, local hospital networks will be paid a price that reflects appropriate loading for their locality and the complexity of the patients they serve. The price will be determined by an independent umpire and country prices will not be set by city assumptions.
Since as early as March 2008, the Commonwealth and States both agreed to develop activity based funding. We made it clear that we would ensure the viability of small, regional and rural hospital services, and this is what we'll deliver on through the funding model that the Government will employ.
By paying hospitals directly for the services they deliver, we'll no longer be stuck with funding arrangements that are years out of date. Instead, hospital financing will have the flexibility to adjust to changing conditions, such as:
* changes in population growth;
* changes in demographics; and
* changes in the health care costs due to clinical and technological innovation.
It will also enable local clinical leaders to respond with flexible local solutions which fully harness local expertise and experience, rather than mechanically applying a state-wide or even nation-wide template approach to each element of service delivery.
By paying local hospital networks directly, it will also enable local clinical leaders to respond with flexible local solutions which fully harness local expertise and efficiencies.
For the Government's reform plan to succeed, it must be properly funded.
In 1995-1996, the Commonwealth share of public hospital funding was 45 per cent of all Government funding of public hospitals. It remained around this level through to the early 2000s and then began to decline.
In 2002-03 it fell to 43 per cent. Two years later, in 2004-05, it was down to 40 per cent. Two years later, in 2006-07, it was down to 37 per cent.
The First Intergenerational Report was released by the Commonwealth Treasury in 2002. The report said, loud and clear, that to meet the needs of an ageing population health spending must rise, not fall. That is why in the Government's first two years in office, we took immediate action on that, increasing the Australian Government's allocation to the public hospitals run by the States by 50 percent to a record $64 billion dollars. That is why we took early action to increase the number of GP training places by 35 percent. That is why, for the first time, the Government has already begun to invest directly in the capital needs of the hospital system around the country, including here in Melbourne at the new facility at Parkville in which the Australian Government is contribution $426 million, some 50 percent of the capital needs for this integrated cancer care centre which will be one of the best, not just in Australia, but the world.
This is the action we've undertaken in our first two years but looking ahead to the future we must have sustainable funding for the long-term future in order to give effect to these reforms.
Under this Government's policy, the Australian Government will, for the first time, as I noted before, become the dominant funder of the entire system. This 60 percent stake equates to some $11 billion per year from next year.
We will fund 60 per cent of recurrent expenditure on research and training functions undertaken in public hospitals. We'll fund 60 per cent of the capital expenditure - both operating and planned new capital equipment - to maintain and improve public hospital infrastructure.
This commitment by the Australian Government is unprecedented. No previous Australian Government has ever attempted any responsibility for funding hospital infrastructure, let alone taking on the dominant responsibility for hospital infrastructure in the future.
Critically, the Australian Government will shoulder responsibility for the lion's share of future growth in the system as well.
This is important not only to ensure we can deliver better health and hospitals into the future, but also to underwrite the financial sustainability of our federation. We calculate that by taking on this greater funding burden, we will also be assuming $15 billion of additional funding that would otherwise be borne by the States.
Without policy change, under current trends spending on health and hospitals would consume the entire revenue raised by State Governments over the next 20 to 30 years to the exclusion of any spending on any other critical portfolio area, such as education, transport and law and order - such is the rate of increase in health and hospital expenditure that governments are currently facing.
To conclude, I believe that reform of the health and hospital system is one of the greatest long-term challenges facing our country. We must get this right, because it will have an impact on every single Australian at various stages of their lives. Every day, hundreds of thousands of Australians rely on our health and hospital system to provide quality care for themselves and for their families.
I am determined to implement the reforms we need so that Australians can be confident in the quality of the health care that they receive in the future and of the funding that underpins that health care system for the future as well.
We are under no illusions whatsoever as to the magnitude of this task, but the size of the task is no excuse to push it to one side simply because the degree of political difficulty may be great.
The Australian Government wants a working partnership - it wants to work in partnership with the Sate and Territory Governments, with health professional organisations, including the peak bodies such as the Royal Australasian College of Physicians and the wider community.
We cannot put off reform any longer.
You, as leading physicians in the Australian community, are key agents of change. Your voice must be added to this national debate as well. If it is done so, if it is done effectively in partnership with the Australian Government and all other branches of the profession which wish to see fundamental and sustainable reform of our health and hospital system for the future then we will prevail.
The Australian Government is determined to take that action.
I thank you.