George Williams on Constitutional shake-up

George Williams in the SMH. As the Beyond Federation Group always say, “Once Health and Education are Nationalised, people are going to start to wonder what the States actually do!

Health reform needs a federal fix first

George Williams
July 28, 2009 – 12:00AM

We all pay for having a broken federal system through healthcare that fails to live up to its promise. Now the National Health and Hospitals Reform Commission has presented a bold vision of reform.
By recommending a federal takeover of primary health care, basic dental care and aged care, it proposes one of the largest shake-ups of government responsibilities since Federation in 1901. If the plan is to succeed it will have to be supported by a parallel process of reform to our federal system.

As the commission’s report, A Healthier Future for All Australians, says, the present system is based on a defective model that wastes too much of the $94 billion spent each year. This leads to thousands of premature deaths, reduced life expectancy and untold avoidable pain and suffering on the part of Australians and their families.

Federalism is by no means the only cause of these problems, but it has long been a key driver. Australia has long run its health services within a federal structure that promotes duplication and waste. It also creates uncertainty about who is responsible for areas of care such as dental and mental health.

Australia’s federal system not only lends itself to bad outcomes, it makes reform much harder. This has become obvious in areas such as health, education, childcare and water policy. Federalism is too often the elephant in the room, with governments preferring to respond to its flaws with expensive work-arounds rather than addressing the faults as part of the solution.

In health, these work-arounds can come unstuck over time. This produces complexities mirroring the underlying federal flaws, such as cost shifting among governments and a willingness to blame others. Too often, issues of control and federal-state conflict come to the fore instead of questions such as how to design a patient-centred system that best meets the needs of the public.

Our federal system imposes big costs not only in terms of time and taxpayers’ money, but also in how it can rein in bold visions. Plans that need to gain the support of every government, as would much of that of the commission, often fail or must be so watered down by compromise that they fail to meet their goal. Not even federal bribery of the states is a sure way forward, as shown by the failure of John Howard’s $10 billon plan for the Murray-Darling to bring about a coherent national approach to that critical problem.

The commission’s plan cannot be fully achieved under our present federal structure. The Commonwealth lacks the power to go it alone, especially in areas such as prevention and early intervention, while the states will be unlikely to want to give up control. Health reform will become unstuck unless it also comes with federal reform, perhaps even a referendum to change the constitution. One cannot be achieved without the other. This demonstrates why, if you care about the state of our health system, you need also to care about the state of the federation.

One advantage in the Federal Government’s announcement that it will not respond to the commission’s report in the next six months is that it gives time to explore the federal reform options. The starting point should be recognition that, to achieve a modern, efficient health system, Australia will also need a modern, efficient federal system to support it. We cannot expect to build as complex an outcome as a world-class health system on a structure of government designed in the age of the horse and buggy.

The Federal Government has achieved early success in tackling reform through the Council of Australian Governments, the peak forum of political leaders. That body will no doubt be pressed into action on health reform. While it is the right body for reaching agreement among governments, it does not have the power to entrench those decisions, or the ability to bring about deeper structural reform. COAG can only bring about a suspension of the ‘‘blame game’’, it cannot fix its cause. COAG outcomes are also vulnerable to changes in government.

COAG cannot by itself drive the federal reform needed to support wholesale change to the health system. This must involve a broader group of Australians, and a wider debate than just on health. We need as bold a plan for our federal system as has been delivered for the health system. This will require a rethink of how power and money are allocated among all tiers of government.

In his new book Battlelines, the Opposition MP Tony Abbott has put one option on the table. He acknowledges that ‘‘tackling the dysfunctional federation turned out to be a lost opportunity for the Howard government’’ and that fixing the system is the nation’s ‘‘biggest political problem’’.

Abbott proposes that the Commonwealth be able to pass laws ‘‘for the peace, order and good government of the country’’, words that are constitutional code for having the power to make laws on any topic whatsoever.

His idea is worth considering as part of the health reform agenda. It would not so much abolish the states as render them obsolete. It could work only if the Commonwealth’s extra power to make laws was balanced by the states having the responsibility and the money to implement national laws and services free of federal micro-management.

Australia needs to do better in delivering basic services such as health. The commission’s report is a welcome new plan for how this might be achieved in proposing that health services be redesigned around people.

However, unless we fix how we are governed, health reform will also inevitably be shaped by the flaws in our federal system.

George Williams is the Anthony Mason professor of law at the University of NSW.

This story was found at: http://www.smh.com.au/opinion/health-reform-needs-a-federal-fix-first-20090727-dyn5.html

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One Response to George Williams on Constitutional shake-up

  1. euandus says:

    Here’s a different angle: I’ve just posted on the alternatives in the health-care insurance reform debate, assessing them with respect to federalism. That is, I suggest that we include an assessment of the likely impact on the system of governance itself. If you want to have a look, here is the link: http://euandus3.wordpress.com/2009/10/27/health-care-insurance-reform-a-spectrum-of-alternatives-with-respect-to-federalism/

    You might also be interested in this NYT article:
    http://www.nytimes.com/2009/10/27/health/policy/27health.html?_r=1&hp

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