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- 17 November 2004
Health Services Amendment Bill
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Page: 12981
Second Reading
The Hon. HENRY TSANG [Parliamentary Secretary] [5.51 p.m.]: I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
I have pleasure in introducing the Health Services Amendment Bill. This bill is central to the Government's Planning Better Health reforms to the New South Wales public health system, which the Minister for Health announced on 27 July this year. Among other things, the reforms announced on 27 July include the amalgamation of the 17 area health services into eight larger health service areas. The new area health services will be formed on 1 January 2005, in accordance with the Governor's order of 20 October 2004. I take this opportunity to remind the House of the benefits of the new area structure, which this bill will support.
Area health service boundaries were drawn up almost 20 years ago and no longer reflect New South Wales's population distribution, make-up and growth, health work force distribution, and patterns of clinical referrals and patient flows. Since then improvements in communications, transport and travel times have also impacted on the way that health services can be delivered. The new area boundaries have been developed to meet current and future health needs, with the key principle underpinning the area health service reforms being that more of NSW Health's resources should be spent on direct patient care and less on administration. The new area health service structure will reduce administrative duplication and inefficiencies and improve consistency in the way health services are delivered.
It will encourage the building of better clinical networks and enhance academic and teaching links. The new structure will also assist in improving the distribution of the health work force. For example, it is estimated that in the inner city there is a neonatologist for every 4,000 babies born, while in the outer metropolitan areas there is one for every 12,000 babies born. This is despite higher levels of births in outer metropolitan areas. Establishing a single service covering central and south- western Sydney will allow neonatologists and neonatal services to be more easily redistributed to the areas of greatest need. The new area structure will also facilitate much-needed corporate service reform. Instead of each area providing its own corporate and business support services, some of these services will be able to be delivered on a statewide or regional basis.
The reforms to area health service boundaries and shared services arrangements are, over time, expected to free up $100 million annually, with the savings being reinvested in additional frontline health services in the areas where they are realised. The September 2003 report of the Independent Pricing and Regulatory Tribunal [IPART], entitled "NSW Health—Focusing on Patient Care" gave impetus to the reform of health administration in New South Wales. IPART found that pressures on the public health system will increase dramatically over the years, and the task of providing the best possible health care will become increasingly costly. The IPART outlined a series of recommendations for better governance and institutional arrangements in NSW Health, including streamlining administration and reducing identified areas of duplication between the department, areas and hospitals, the reform of area health boards and improved clinician and community involvement in health service decision-making processes.
The reforms outlined in this bill are designed to address board governance arrangements to cope effectively with the demands of modern health care delivery, the need to improve accountability in health administration and the important role clinicians, health consumers and the community should have in health service decision-making processes. The first key change provided for in the bill is the abolition of area health boards as the governance model for area health services. The changes in models of care, health service delivery and technology, and the expansion of clinical networks across area boundaries signal the time for change. It is now time to move to an administrative model that better facilitates these networks and ensures a systemic approach to service delivery and clinical governance in the public health system.
The bill abolishes area boards, with area health services being controlled and managed by a chief executive, supported by an executive management team. It provides clear lines of accountability from the chief executive to the director-general, who in turn is accountable to the Minister. This simpler governance structure will make accountability in health administration clearer and better enable NSW Health to progress reforms that involve statewide initiatives or have cross-area impacts, such as shared corporate and health support service reform. The current Act provides for the establishment of statutory health corporations, of which there are currently five. These are Justice Health, the Royal Alexandra Hospital for Children—more commonly known as the Children's Hospital at Westmead—the Clinical Excellence Commission, HealthQuest and the Stewart House Preventorium. Those bodies are currently also subject to board governance.
The more specialised and focussed nature of some statutory health corporations has enabled their boards to operate. However the Children's Hospital at Westmead, like other area health services, has an integral role in health service delivery within the public health system. There is a need to improve the manner in which the Children's Hospital's services and administration are integrated with the area health system, whilst maintaining its own distinct expertise and branding. In the case of the Children's Hospital, there is a need for simpler, more direct and more accountable governance arrangements of the kind proposed for area health services.
The bill therefore amends the Health Services Act to enable the Governor to order whether the affairs of any particular statutory health corporation are to be controlled by a board or a chief executive. Where the Governor orders that the affairs of a statutory health corporation are to be controlled by a chief executive, the bill applies similar governance arrangements to those that will apply to area health services. The bill's amendments to schedule 2 to the Act provide that all of the current statutory health corporations, with the exception of the Children's Hospital at Westmead, will continue to be governed by boards. Board-administered health corporations remain accountable to the Minister and chief executive administered health corporations will be directly accountable to the director-general.
While the board governance model has generally outlived its usefulness in the delivery of public health services, its abolition represents an ideal opportunity to establish improved clinical, consumer and community participation arrangements. IPART identified the need to reform clinical and community participation arrangements at the State level and in health priority areas, and to establish permanent structures for community participation at the area level. The Health Services Act already provides some recognition of the importance of community and clinical consultation. Some clinician input is currently provided through area clinical councils and health care quality councils. However, consumer and community participation structures in areas are established on an ad-hoc basis and are variable in their effectiveness.
New structures are needed to give health professionals, health consumers and community representatives an enhanced role in the administration of our health system and in setting directions for the delivery of health services. This involvement is critical in keeping area management informed of issues relating to patient care and promoting continuous improvement in patient care and health care quality. Given the critical importance of clinical, consumer and community participation, the Minister established the clinical and community advisory group, jointly chaired by the Rt Hon. Ian Sinclair, AC, and Ms Wendy McCarthy, AO, to recommend an appropriate model for area health advisory councils. The committee received 190 written submissions and held more than 60 meetings, involving more than 2,300 people in 35 locations across New South Wales.
The results of the work of the advisory group is contained in the report the Minister tabled yesterday entitled, "A Clear Voice for Clinicians and the Community". I take the opportunity in this reading to congratulate the Rt Hon. Ian Sinclair and Wendy McCarthy and thank them for their leadership of the advisory group. The Rt Hon. Ian Sinclair has also taken the time to assist in settling the provisions of the bill relating to area health advisory councils. I also thank the advisory group members Professor Judy Lumby, Noel O'Brien, Professor John Overton, Dr Sue Page and Tom Slockee for their valuable contribution.
The second key reform in the bill is the culmination of this process and will legislatively enshrine robust clinical, consumer and community participation structures for area health services in the form of area health advisory councils [AHACs]. The bill legislatively enshrines an area health advisory council for each area health service, whose membership will comprise up to 13 ministerially appointed clinicians and community-based consumer representatives, with a requirement that there must be a reasonable balance between these two groups. Members may be appointed for terms up to four years and may serve a maximum of no more than eight years in total to ensure there is an appropriate balance of experience and fresh ideas within each advisory council.
There will be at least one person on each AHAC who has expertise, knowledge or experience in relation to Aboriginal health. It would obviously be my strong preference that these representatives are members of the Aboriginal community. The new area health advisory councils are in no way intended to replace already well-developed local health participation councils that have direct links with area management. Rather, the new structures will build on this good work and serve as a focal point for local health participation councils' issues. The legislative framework is sufficiently flexible to meet local needs, with the broader council functions and appointment arrangements being provided for under the bill and matters of detail, such as council procedures, being the subject of regulation.
The bill also provides for the establishment of an area health advisory council charter, as recommended by the clinical and community advisory group, which will further develop the way councils operate over time. The charter must be publicly available on the Department of Health and area health service web sites. The incoming council chairs will assist in the development of the charter. Chief executives will continue to require the advice and support of committee structures and medical staff councils, similar to those currently established under existing by-laws. Accordingly the model area health service by-laws will be amended to ensure these committee and council structures are appropriately constituted under the new system. The bill also provides that the Minister may establish advisory committees for chief executive governed health corporations, the precise functions of which will vary depending on the nature of the corporation. This provision will be used to provide for appropriate clinician and community input into the work of the Children's Hospital at Westmead.
The third key reform in the bill, which will complement the simpler, more direct and accountable governance arrangements for health administration, is the establishment of a health executive service. Members will be aware that area chief executive officers are currently members of the senior executive service [SES]. With the abolition of area boards and the introduction of new accountability arrangements for chief executives, it is proposed that the director-general, as the Health Administration Corporation, be their employer, including being responsible for appointment, contracts of employment, performance review and termination of appointment.
Greater consistency with other public sector executive arrangements is also desirable in terms of performance review and management of other executives within NSW Health. The performance of such executives is pivotal to the fulfilment of the duties and responsibilities of public health organisations, including the achievement of targets and objectives set in the performance agreements with the director-general. Executive performance is also pivotal to the management accountability of the chief executives of public health organisations.
Under section 115 of the Act the Health Administration Corporation already has the central role of determining consistent employment and remuneration conditions for these health service executives. Moving to establish the corporation as their legal employer will facilitate an integrated approach to executive development and promotional opportunities within the public health system, a consistent approach to executive performance management and review within NSW Health, and clear lines of accountability of senior health executives, through chief executives to the director-general, consistent with the director-general's already established role in monitoring the public health system and performance review of public health organisations and chief executives.
The bill applies similar employment and compensation provisions to those applying to senior executive service officers under chapter 3 of the Public Sector Employment and Management Act 2002. This gives greater certainty to health service executive employment arrangements, rather than leaving them to be determined solely by the Health Administration Corporation. The bill retains scope for employing board-governed statutory health corporation chief executives as SES officers, as it would be appropriate to maintain more of an arm's-length relationship between the director-general and such chief executives where the statutory health corporation has some form of broad health oversight role, as is the case with the Clinical Excellence Commission. The bill also makes minor consequential amendments to the Public Sector Employment and Management Act 2002 to recognise the new Health Executive Service regime.
The proposals contained in the bill represent the next major step forward in health system reform. Together with the area amalgamations the Minister has already initiated, they will streamline area management and administration, simplify health system governance and management, better support the development of health executives and make them more accountable, improve clinical and community participation in public health service delivery, enhance system-wide approaches to critical issues like strong clinical governance and patient safety, support shared services reform, and facilitate clinical networking across area boundaries. These reforms provide a framework for the public health system for the twenty-first century. They will mean more resources for front-line services and stronger clinical support for outer metropolitan and rural health services—in short, better, more accountable health services for the people of New South Wales. I commend the bill to the House.
The Hon. ROBYN PARKER [5.53 p.m.]: It is Ground Hog Day! We are here again trying to fix up this State's failing health system and to deal with the Carr Government's total mismanagement of the system during its 10 years in office. Members of the community. raise with me regularly a long list of concerns about the Carr Government, and the health system is close to the top of that list, along with the appalling train system. The first question on people's lips is: What has the Government done with the money?
Apparently this bill is designed to save money that will then be delivered to front-line health services. I have heard that many times. The Government often promises funds to front-line health services, and every piece of health-related legislation introduced is designed to deliver better outcomes, and more services and resources to front-line health care. This Government has been in power for 10 years and it has enjoyed record State revenue, which has increased over that time by about 80 per cent. In 1995 revenue was $20 billion a year; last financial year it was $40 billion. Thanks to the Federal Government's incredible economic management, the Carr Labor Government has obtained an incredible amount of stamp duty revenue—at least $7 billion more than it anticipated. Despite that, it has slashed 5,000 hospital beds since it came to power.
This bill recognises that mismanagement. It refers to the need to make savings in health care and to redirect that money to the front line. It highlights duplication and inefficiencies in the health system. It amounts to an admission by the Carr Government that its management of the health system is as inefficient as it can be. It has put the health system under incredible stress and strain. The health bureaucracy contains a great deal of duplication and the top-heavy initiatives that are regularly introduced fail to deliver benefits to the front line. That should be the main focus of those providing a health service. The bureaucracy is growing, there is a lack of funding for the provision of beds and health services generally, and doctors and nurses are not being supported. The Government has failed to recruit adequately and to consult local communities so that it can provide health services where they are needed. One does not need to move far out of Sydney to see how difficult the situation has become. Honourable members have talked about Camden and Campbelltown hospitals in the past couple of years, but the community talks about poor health services across the board. The Government's lack of consultation and local focus is clear. It does not seem to be able to examine the situation and to provide good health care in the community. That is the least we can expect of a Government so flush with funds.
This bill amends the Health Services Act and the Public Sector Employment and Management Act. It will allow the Minister to act on the announcement he made earlier this year about the amalgamation of 17 area health services to eight large area health services. That is supposed to result in greater efficiency and savings for the front line. I am keen to see those savings and whether they are allocated to front-line services. I am also keen to see how local communities benefit. The passage of this bill will result in the abolition of area health service boards. A chief executive officer [CEO] who is accountable to the director-general will control the new area health services. Depending on the function of health corporations, they might be governed by a CEO or a board.
This bill also provides for the establishment of area health advisory councils. The Minister will appoint clinicians and community-based consumer representatives, and at least one council member must be Aboriginal. Membership is for four years, and members can serve a maximum of two terms. The advisory councils will have an advisory, consultative and liaison role within the area health service operations, but will have little in the way of decision-making powers. I wonder what their role will be. Why will the council members be appointed by the Minister? The community will be understandably suspicious about the composition of the advisory councils. I do not know how the Government came up with its notion of community consultation. I have heard stories about local members not being aware of meetings convened to discuss the advisory councils. There has been very poor consultation, and that is par for the course with this Government. Its local community consultation is tokenism. If the advisory councils have little power to make decisions, as is evident in this bill, they will be nothing more than window dressing.
The other purpose of the bill is to establish a health executive service under which the new area health service chief executive officers and other service executives will be employed. The bill provides for award contracts—something like the current senior executive service [SES] health—and the current SES health executives will be transferred to that service. The Government has said that this will save $100 million, which will be ploughed back into front-line hospital services. At the same time the Government said that it has a no-forced-redundancy policy. I wonder how, without job losses, those savings targets will be managed and how the resources will be distributed.
For a long time the Opposition has been committed to ensuring that local consultation and local participation in the delivery of health services are of paramount importance. Our long-term policy is to ensure. that local consumers who use the health services in their area have some sort of input into how those services might best meets their needs. Some of these health care services cover large areas so I fail to see how local people could possibly have any input, particularly in areas such as the Hunter-New England Area Health Service—one that I am familiar with—which covers a huge distance and services more than 800,000 people.
With larger police local area commands in large rural geographical areas we have already experienced difficulty with resources being spread to all areas. Local people know the sorts of services they need, and the Government should concentrate on ensuring that all the services are working together and working efficiently. The Government has delivered much the same rhetoric as it did with local council amalgamations. The catchcry has always been that there will be huge savings. We will just have to see how that pans out.
I am aware of concerns expressed by nurses about the new area health services and the new advisory council structure. They are concerned about the level of authority these structures will have and the ability of the Nurses Association and the nursing profession as a whole to have input into New South Wales public hospitals. The other concern that needs to be addressed is whether the Government is using this mechanism to try to cover up just how many senior executives there are in the bureaucracy and how they will be no longer all wrapped into one neat little package but spread over a larger area. Perhaps it looks a bit better for a top-heavy organisation if the senior executives are spread out a bit over a wider area; it may be a good way of masking the actual numbers.
The bill will amend the Act to amalagmate 17 area health services into eight, and I think the greatest concern is the gap between the delivery of services on the one hand and the large area health services on the other, with a head office located at one extreme point of an area. It works quite efficiently for the larger population in the town or city where the new area health service is sited, but those at the extreme ends are, by their geographical distance, likely to suffer from the tyranny of distance.
The Government says that under the new area health councils, the voices of local communities and health planning will be strengthened because they will have direct access to the area chief executive. I am not sure how that works, because on the one hand they say they have little responsibility, yet on the other hand they are supposed to have better access to the area chief executive. At least under the old structure, boards had a statutory role in making decisions. Given that they could have been better structured, there seems to be a lack of consultation, clear communication and contribution with respect to the new proposal. Perhaps if people had been consulted and given time to look at how these health councils might work, and if they. had had an opportunity to provide some input into the structure, we might have some clarification.
Other members will talk about how this legislation affects their areas. I am sure the Hon. Rick Colless will comment on the new proposal for the Hunter-New England area health service, as he lives at one extreme end of that area. It will service 800,000 people and will have 14,500 employees at 39 public health facilities. Although it is not finalised yet, its area will include the Greater Taree, Great Lakes and Gloucester local government areas as well as local government areas in the Hunter and Lake Maquarie. While we have a commitment from the Government that there will not be forced redundancies, on the other hand there have been statements about administrative jobs being slashed from health services across the State. I look forward to some clarification about how the two can work, because I read a newspaper article that suggested that approximately 650 administrative jobs are to be slashed. I am not sure where all of those people might go if there are no forced redundancies and no job losses.
We are told that the merger is going to deliver an extra $100 million to front-line services. We are not told how that will be distributed, and we are not told if it is to be spent on more nurses or on public hospital wards. We do not know where that money will be distributed, much the same as we have no idea where the 2.25 per cent vendors' tax is going to be spent, given that the rationale for that tax, we are told, is that it is to be allocated to front line health care services. There are no guarantees, therefore, that the merger will provide improvements to health systems and savings.
There was widespread concern from New England community leaders about the super health region whose central administration is to be based in Newcastle. People who live in Newcastle would not necessarily be concerned, but anyone who is familiar with the size of that region would agree that it covers quite a distance, and I would hate to see employees of the department spending vast amounts of time on the road travelling the huge distance from one end to the other. The new administrator, Terry Clout has been given a brief by the Minister to oversee the equitable distribution of medical nursing and allied health staff, and to focus on enhancing the recruitment and retention of staff in the New England and lower North Coast sector.
I wish Mr Clout the best of luck. He believes there are significant opportunities to move corporate and administrative services into the twenty-first century. In the Newcastle Herald of 28 July 2004 he indicated that it was easy to give Hunter clients a guarantee that their services would not be diminished and that no-one would lose from the merger. I hope Mr Clout is right. Certainly the Newcastle branch organiser of the Health Services Union, Bob Hull, in the Newcastle Herald on that same day, was sceptical and concerned that the area health service encompasses a larger area, and I feel those concerns are justifiable.
Country communities have more diverse needs and the New England Area Health Service has the highest number of Aboriginal and Torres State islanders and the mortality rate there is substantially higher than in the rest of the State. The needs of people in that area are quite different to the needs of people living in the Newcastle area.
One could be forgiven for thinking that the mergers will make health services less local rather than more local, at a time when community trust in NSW Health services is at its lowest. Few people have confidence that the Government will deliver appropriate services. To increase the size of area health services without providing guarantees of better outcomes does not inspire confidence. Area health service personnel will now have to travel great distances between health care facilities. Numerous general practitioners and visiting medical officers at local hospitals have expressed concern that service levels will not be maintained and improved.
It would be great if we did not have stories of woe from people in local communities but, unfortunately, people complain every day about health mismanagement in this State. In particular, those in outlying areas complain about inefficiencies and lack of communication between different services, hospitals, ambulance services, general practitioners, and other health care professionals. The Government has said the mergers will result in great savings. However, it has not started off on a good footing, because there has been insufficient consultation with key stakeholders, and relevant communities have not been informed of meetings about the mergers.
The Government has merely made a vague attempt to involve communities, and consequently there has been little input from them. The Opposition is extremely concerned about the bill, health care in New South Wales in general, and the Carr Government's inability to manage health services and deliver front-line services and positive outcomes for the people of New South Wales.
The Hon. DON HARWIN [5.15 p.m.]: It was only 18 months ago that we saw a strident defence of the 17 area health services throughout New South Wales from the former Minister for Health, Craig Knowles. However, the worm has turned quite quickly. The Opposition will oppose this hypocritical legislation. The Government has claimed that there will be savings of $100 million, but it is difficult to reconcile that with some of its policies on public sector redundancies. The Government's new approach will certainly lead to a diminution of local input into decisions. The size and shape of country area health services—especially as many of them will incorporate a chunk of metropolitan Sydney—have meant that this change has become embroiled in controversy.
Only yesterday the Opposition moved for papers to be laid upon the table of the House in relation to the Greater Southern Area Health Service. The comments of the honourable member for Monaro and the Minister are a great contradiction. I am sure the Hon. Patricia Forsythe, who moved this commendable motion, will speak further on that. Most of my experiences with the health system have been with the new South Eastern Sydney Illawarra Area Health Service. I have lived in that area all of my life. I was born in Crown Street Hospital, and my only hospitalisation was at the Prince of Wales Hospital. My local hospitals during my life have been, variously, St George Hospital, St Vincent's Hospital, and, currently, Shoalhaven Hospital. Therefore, it is of great interest to me that we have this extraordinary new area health service.
I have had quite a bit to do with drawing maps of regions, electorates and other spatial arrangements over my working life, so it is with some interest that I looked at the area health service boundaries. They are very curious indeed. Inevitably, all sorts of idiosyncrasies will occur with only eight area health services. I am most connected with the area health service running from South Head, Watsons Bay, down to Durras Lake, eight miles north of Batemans Bay, which is particularly curious. On the one hand it includes St Vincent's public hospital, which provides immensely complicated medical procedures and specialist services for communities in the inner east of Sydney. On the other hand, it stretches down to Milton Hospital, which I have visited many times with councillors, the General Manager of the Shoalhaven Group of Hospitals, Monica Taylor, and the honourable member for South Coast. Milton Hospital could not be more different than St Vincent's Hospital.
I am concerned that the formation of the South Eastern Sydney Illawarra Area Health Service will result in a lack of quality and fairness in the allocation of resources because the collection of disparate hospitals and communities will be under the one umbrella. The former Illawarra Area Health Service, which was one of the 17 area health services, illustrated the sorts of problems we will face with the even larger area health services. The Illawarra Area Health Service did not have a Sydney component; it covered the northern suburbs of Wollongong down to Durras Lake, at the lower end of the Shoalhaven. There was an imbalance between population and resource allocation.
In the Illawarra Area Health Service, the city of Shoalhaven had 26 per cent of the population but the funds spent on it did not commensurately reflect its share of the population. Indeed, even the former member for South Coast, a Government member, tried to put the best possible spin on it but he still had to concede—frankly, I wondered about the figures he provided—that we were getting only 22 per cent of the funds. That was despite the fact that it was obvious from the Australian Bureau of Statistics figures that the Shoalhaven was a much older community than the suburbs of Wollongong in the Illawarra region. Our health needs were greater than those in the Illawarra, yet we were missing out on funding.
How much worse will the problem be when we have the South Eastern Sydney Area Health Service stretching from Durras Lake to Watsons Bay? No doubt my colleague the Hon. Rick Colless will talk about the grouping of the Lake Macquarie and Moree local government areas in the new Hunter-New England Area Health Service, which is an extraordinary arrangement. I am sure he will have exactly the same concern that country areas on the periphery of the new area health services will miss out. It will be a repeat of the same old "centre versus periphery" problems: public policy across a whole range of departmental responsibilities, but hospitals like Shoalhaven and Milton in particular suffering under these new arrangements.
In that respect I note that it is proposed to set up a health care advisory council for the region. How on earth can a workable and viable advisory council, with limited numbers, possibly contain all the diverse and—as my colleague the Hon. Patricia Forsythe suggests—competing interests? Certainly, if the South Eastern Sydney Illawarra Health Advisory Council does not have significant representation from the Shoalhaven there will be difficulties in the Shoalhaven. Indeed, if the specialist needs of the inner east, where I lived for many years, are not reflected on the advisory council we will have real troubles, too. If I may be forgiven by my colleagues for saying so, the diversity of those competing interests are even greater in that area than in some other areas. That is part of the Opposition's concern about the Government's approach in this legislation.
The Opposition has made its position crystal clear on a number of occasions. We have raised with the 17 area health services our concern about this legislation. In the past we have presented an alternative approach to the trend towards the centralisation of decision-making and the disfranchisement of local communities. The Liberals and The Nationals believe that clinicians and local communities are well placed to determine what services are needed in their hospitals. Our policy on local input into hospitals at the State election in March 2003 reflected that. For example, in my area of the Shoalhaven I was able to inform residents that a Coalition government would immediately appoint hospital boards to the Shoalhaven and Milton hospitals, and their first task would be to develop revised strategic plans for those hospitals.
As part of developing those plans, the boards would review the adequacy of services and facilities at the two hospitals, and in particular they would report to the Minister for Health on the adequacy of bed numbers. Had we been elected at the 2003 State election, by now there would have been boards for the Shoalhaven and Milton hospitals, and after nominations were advertised in the local media the membership of those boards would have included a minimum of three clinicians, a doctor, a nurse, and an allied health professional. We would also have sought representatives with experience in non-government organisations and in financial, legal and other relevant fields.
As part of the policy we took to the 2003 State election, the boards would have been provided with a budget based on the resource distribution formula. That would have meant that the Shoalhaven, including Milton hospital, would have got an appropriate share of the funds based on population, unlike the approach taken by this Government under the current statutory arrangements. Decisions about what services would be provided and how the funding would be spent would have been made locally in Nowra and Milton-Ulladulla, rather than by bureaucrats elsewhere.
It would come as no surprise that our approach had strong support in the community. It certainly had enormous support in the Shoalhaven, and no doubt that is one of the reasons why the Liberal member for South Coast, Mrs Hancock, was elected and not a Labor member. Indeed, many local people agreed with that sentiment. An article in the Milton-Ulladulla Times of 22 January 2003 stated:
Many community members agree with this sentiment especially former Milton Hospital Board member John Blackburn who has been very vocal in his support of hospital boards.
Mr Blackburn served on the Milton board for 20 years as both chairman and treasurer.
"The old boards worked very well, there were no political leanings and everyone got a say," Mr Blackburn said.
"Under the current system smaller hospitals are disadvantaged.
"We have no input on an area board … "
"They just look after the places with the bigger populations like Wollongong."
"If the response to hospital boards in the past is anything to measure by, the reintroduction of boards would be a very popular move."
"Every time a position on the board became available we would advertise and get at least ten applications for one position," Mr Blackburn said.
"Another advantage to the old system is the community has more access to the board."
"People used to stop me in the streets and raise concerns or make suggestions the board could follow up," Mr Blackburn said
That is exactly the sort of approach country communities were so attracted to at the 2003 State election; they knew instinctively how well it worked in the past. While on the subject of Milton hospital, the need for a board, rather than the approach taken in this legislation, has never been more apparent than it is at the moment. With great fanfare, on 14 March 2003 the Chief Executive Officer of Illawarra Area Health Service announced that there would be an extra five beds in a $6.9 million upgrade of Milton hospital. Work on the upgrade is almost complete, and with the buildings about to be opened, the Government is reneging on its promise to provide five extra beds.
That reminds me of that classic Yes Minister episode in which Minister Hacker exploded when he was told what was happening at St Edward's hospital, the smoothly running hospital with no patients. That is what we are looking at Milton hospital: a brand-new $7 million building that will not have the five beds promised by this Government. The people of New South Wales simply cannot trust the Government with its money when it has such an approach to capital works expenditure and no commitment to provide recurrent funding to keep beds open.
An area health service stretching from Watsons Bay to Durras Lake will result in this nonsense continuing. Decisions on capital works are being made in Sydney, but clearly they cannot be sustained at a local level. An area health service with the sort of geographical spread of the South Eastern Sydney Illawarra Area Health Service inevitably will have problems such as those now developing at Milton hospital.
I call on the Government and the Minister to immediately fund the opening of the five extra beds at Milton hospital. In the lower House we gave the Government the opportunity to incorporate local input into these new arrangements. My colleague the Deputy Leader of the Opposition, the honourable member for Ku-ring-gai, moved amendments in the other House, but those amendments were defeated. It was interesting to see how some of the so-called country Independents voted on those amendments, but more will be said on that later. This bill is fundamentally flawed and we will vote to defeat it. In the event that we are successful, we hope that the Government will bring to the House legislation that meets community concerns that we are supporting here this afternoon.
The Hon. PATRICIA FORSYTHE [5.30 p.m.]: This legislation provides some of the strongest contrasts between the position of the Government and that of the Opposition on a fundamental policy issue: the provision of health services to the people of New South Wales. As I travel around in the community I am often asked about the differences between our philosophical position and that of the Government.
The Hon. Dr Arthur Chesterfield-Evans: Sadly, there is often not much.
The Hon. PATRICIA FORSYTHE: In this case there is a significant difference. The Coalition—the Liberal Party and The Nationals—has a firm view on this issue. Ours is a bottom-up approach rather than a top-down approach. We stand strongly for the rights of local communities to have their voices heard by decision makers rather than have centralised bureaucracies and centralised decision making. The effect of this legislation, which will create a huge area health service to replace the existing 17 area health services, is a retrograde step. The so-called saving of $1 million will turn out to be illusory. What will be created will be an inefficient system that will provide more desks, not more beds.
I have followed in the newspapers the debate about the development of these area health services. In a newspaper article some time ago the honourable member for Monaro, in justifying why the head office of the Greater Southern Area Health Service should be in Queanbeyan, is quoted as saying that it had a better air service than Albury, for example. The only way in which bureaucrats and others will be able to adequately manage the system is to take to the air, because the distances between centres will be so great, and that will lead to inefficient delivery of services. The Greater Southern Area Health Service will cover more than one-third of New South Wales. It will have 43 hospitals and 4 health care facilities, all under the authority of the chief executive officer, who will be created by this legislation.
The Opposition does not believe that makes for an efficient health service. The system is already inefficient, without creating these monoliths that will be the end result of this legislation. Today's Auditor-General's report into health services in New South Wales highlights some of the inefficiencies to which I am referring. With regard to the Southern Area Health Service, which has had significant financial problems throughout the past 12 months in particular, he said at page 202:
The review noted the following instances of non-compliances:
• the Service had not nominated a dedicated accounts complaints officer;
• order forms are not printed with the details of accounts complaints officer, the specific telephone number, or that interest may be payable on overdue accounts;
• instances were noted where some creditors were not paid within the established terms;
• the Service did not include payment of account details in its 2002-03 annual report.
All that may seem a fairly minor element of a significant health service, where the focus has to be on patient care, but we have come to understand that under this Government the delivery of health services has been inefficient and, as a consequence, patient care has been found wanting. Another health service in which I have taken a close interest in the past 12 months is the South Western Sydney Area Health Service. In its case the department has noted that the area should not have any creditors, including amounts owing to visiting medical officers, government agencies and contracted patient services over 45 days. The service did not meet this requirement. The department provided one-off assistance of $6 million in 2003 towards payment of these creditors and the service developed a four-year financial plan to address its liquidity issues.
In two area health services we have significant examples of inefficiency and inability to meet the requirements of its legislation or its community. We are now about to impose what I believe will be a totally inefficient service. The Opposition believes in the voice of local communities over a Government that is focused on a strong centralised bureaucracy. I refer in particular to the amalgamation of the Greater Murray Area Health Service with the Southern Area Health Service. It is an area I know something about because my duty province as a Liberal member of the House covers all of that area and then some. My area covers 13 electorates and probably, in geographic terms, covers about half of the State. It is an area of significant and diverse local needs. It is not an area that one can easily drive around.
The amalgamation of those two health service areas will cover about one-third of the State. It will include significant communities from Queanbeyan to Wagga Wagga and Albury, through Griffith and out to Deniliquin, and then to the significant growth communities of coastal New South Wales up to Batemans Bay. It is an extraordinarily significant area yet it is to be managed by one chief executive officer, and we know that the Southern Area Health Service has already had significant debts. We are not confident that expanding the area will do anything to improve patient care. At the end of the day that is what we want.
This morning I had the opportunity to meet a significant delegation from the Batemans Bay community. Batemans Bay is one of the fastest-growing areas in New South Wales. In recent times a multimillion-dollar shopping centre has opened in Batemans Bay, there has been a significant extension to the local registered club and there have been other multimillion-dollar developments. The major shopping centre has taken on 200 staff. Although Batemans Bay may be said to have a core population of about 16,000, the area immediately around Batemans Bay has a population of about 34,000. However, in every holiday period, and in particular in the Christmas school holiday vacation, the area of Batemans Bay absorbs a population well in excess of 100,000 people.
My colleague the honourable member for Bega recognises this fact and the impact on the local hospital. He has met with the community and was instrumental in arranging a significant protest meeting that attracted more than 400 local people who are trying to get this Government to understand that the hospital facilities at Batemans Bay are inadequate to serve the needs of the community at all times, but in particular during the summer.
It seems that there is an agenda that is focused on Moruya hospital, which—while it may be geographically more central to the Eurobodalla Valley—does not reflect where the population lives. So we have the majority of people in a community with a hospital that was built in, I think, 1974, which desperately needs to be upgraded in terms of maternity facilities and emergency facilities, versus a hospital at Moruya that was built in 1932. The community would like to see both hospitals doing well. But the reality is that with the population located in an area that suffers from bushfires, they believe there is a lack of focus in their area.
As an example of the community's needs it was pointed out to me at the meeting this morning that at present the doctor in Batemans Bay hospital—I presume it is a general practitioner but it may be a specialist doctor—who is not able to provide maternity services at Batemans Bay hospital, has on his books 63 pregnant women. That is 63 women who will have to go to Moruya for the delivery of their babies, 63 women who will have to go to Moruya for postnatal care. The community, including one of the women who is pregnant, told me that is totally inadequate. Their greatest fear is that there is an agenda not to give support to Batemans Bay. They doubt that the new CEO and health administrators will take up their concerns and have them appropriately addressed by this new health advisory council.
Batemans Bay has a long list of woes about inadequate funding. We know that Batemans Bay attracts many people in post-retirement years, and a significant number of patients who attend Batemans Bay hospital are elderly. Recently the hospital had to phone Moruya hospital and ask the next visiting doctor to bring more supplies, as it had run out. Today I heard of patients' families having to wash bandages because the hospital lacks the basic facilities to provide surety about hygiene and protection of patients. This is in a community that is growing significantly, a community that will now have just one facility out of 47 across the Greater Southern Area Health Service. It is no wonder that the Opposition opposes the legislation.
Each of my colleagues who speaks in the debate will have a story to tell about problems in local communities—problems that we doubt can be addressed under the enormous, centralised, bureaucratic system to be created by this legislation. I look forward to the tabling in 13 days of documents relating to the Government's decision to locate the head office of the Greater Southern Area Health Service at Queanbeyan. Queanbeyan is an important city, a growing city that would benefit from government services. But there are concerns from doctors in other areas and medical practitioners throughout the regions about why it was decided to locate the head office at Queanbeyan. I look forward to reading the documents.
Wagga Wagga has a very strong tradition in health, particularly in nurse training. Together with Cootamundra, Wagga Wagga has been the core of nurse training in the region and an important teaching facility at the Wagga Wagga hospital. Doctors in the area have expressed concerns about the basis and the wisdom of the decision in relation to Queanbeyan, and there has been debate about it. The honourable member for Monaro claimed that he had got the Minister to locate the head office at Queanbeyan. In other words, there was an implication that it was a political decision. However, when the Hon. Robyn Parker asked the Minister about the reasons for the decision at an estimates committee hearing, he suggested it was not made on political grounds.
Doctors in the Wagga Wagga community have expressed concern about the decision to locate the head office at Queanbeyan rather than Wagga Wagga, which they say would have been more central to areas such as Griffith, Albury and the coast, and the area extends much further west than Griffith. Wagga Wagga would have been more central. Albury is a significant city, and it could well be argued that the head office should be located there if availability of an air service were one of the criteria. Griffith also has access to an air service. The Government's decision to create these significant area health services has not satisfied communities across New South Wales.
There is a feeling that the needs of local hospitals and communities will be ignored in this centralised, bureaucratic, monolithic structure that will be the outcome of the legislation if it is passed tonight. Local communities are speaking up for local needs, as the people of Batemans Bay did in their meetings today with the honourable member for Bega, and with the shadow Minister for Health and the Minister for Health. Perhaps they were a little nonplussed by his unwillingness even to make notes during the meeting about the issues they were concerned about. I have heard nothing from the Government by way of second reading speeches or contributions to the debate in the other House that quieten my concerns about the issues that local communities have raised with me.
The legislation is a step backwards. The Government has said it will be money-saving legislation, and at the same time it has been said that people will not be lost; that positions may go from one area but overall there will not be a general loss of people in the community. I note that Queanbeyan hospital has already had a significant number of people take voluntary redundancies early this year—I think the number was greater than 60. So perhaps it has already had the cuts that the Minister is suggesting he will monitor. The Government has claimed that money will be retained in a region. The regions are now so large that even though money might be retained in the one area it will not be retained in the local communities. There will be a significant shift in resources, but not to the benefit of the community, and not to the benefit of health services. This legislation should be opposed, and I urge the House to oppose it.
Reverend the Hon. Dr GORDON MOYES [5.50 p.m.]: I speak on behalf of the Christian Democratic Party on the Health Services Amendment Bill. The main purpose of this bill is to institute amendments to the Health Services Act 1997. There are many important objects to these amendments, which will have far-reaching ramifications for the provision of health care services in New South Wales. However, the sum of them does not outweigh the liabilities that exist. For example, 650 job losses. Who? Where? It must cause great anxiety for people within NSW Health. I can be sure of one thing: The job losses will not occur in the ranks of administrators and bureaucrats, but in the ranks of front-line nursing services.
The first main amendment is to provide that area health services will be governed by their chief executives. This means that existing area health boards will be abolished. I regret that. I have worked with area health boards for 26 years with great satisfaction. I remember the fine contribution made by community members—volunteers—who could be consulted with great reliability on the needs of their area. I regret the change from community contribution to area health boards and the centralisation of greater power into the hands of chief executives.
The second main initiative is to provide for the establishment of area health advisory councils to give advice with respect to certain matters affecting the operations of area health services. However, no advisory council can hold a chief executive accountable in the same way that a board can. An advisory council, by its nature, can only advise. Chief executives need to be accountable to a board. Under this bill, statutory health corporations may be governed by their chief executives as opposed to being governed by a representative health board. Advisory councils will also be established to give advice with respect to matters affecting the operations of statutory health corporations that are governed by their chief executives. This notion of centralising the power into the hands of a few executives cuts against all the advice of management experts in this field. The Bible states that there is wisdom in the multitude of councillors. This legislation will remove the multitude of councillors and concentrate power into the hand of a few bureaucrats.
The bill will also provide for the establishment of a health executive service similar to the senior executive service under the Public Sector Employment and Management Act. Whenever we see a senior executive service note—or whatever it is called—we should beware. It will simply mean more costs, more executives, more bureaucrats and more fat cats. It does not mean more clinicians, more nurses, more domestics, more cleaners, more Aboriginal health workers, more physiotherapists or any other allied health professional.
I will indicate some of the most salient reforms proposed by this bill. I do not favour all of the initiatives introduced in the bill. The Minister announced in his second reading speech that the present 17 area health services will be amalgamated into 8 larger health service areas. The Minister's intention is that the area health services will be formed on 1 January 2005. In relation to current area health service boundaries, the Minister pointed out that:
Area health service boundaries were drawn up almost 20 years ago and no longer reflect New South Wales's population distribution, make-up and growth, health work force distribution, and patterns of clinical referrals and patient flows… The new area health service structure will reduce administrative duplication and inefficiencies and improve consistency in the way health services are delivered.
I am sure there are better ways of improving the health service structure and reducing administrative duplication and inefficiencies than abolishing the area health boards. The Minister further stated:
The reforms to area health service boundaries and shared services arrangements are, over time, expected to free up $100 million annually, with the savings being reinvested in additional frontline health services in the areas where they are realised.
I wonder where that money will come from. It seems to be a gloss. It is all well and good to argue for cost efficiency, but the question at the forefront of my mind is whether the community will actually benefit from the proposed changes. Will the delivery of health services be improved upon amalgamation? The Council of Social Service of New South Wales has raised some valid points arguing against the proposed amalgamations. I side with its point of view. Although not directly footed by the Government, there will be increased costs in time and money that will be borne by NSW Health employees and health practitioners having to travel extended distances. Importantly, the council has asked itself how health will be improved. The council has said:
It has been proposed that the amalgamations will lead to greater access to health practitioners, yet how this will happen has not been addressed. For example applications for a public dental position was advertised in Sutherland. Five applicants were interviewed and those that were not successful in Sutherland were informed of a vacancy in Wollongong (which included additional loadings). No one would take the position because of the greater distance to travel. Merging South Sydney and the Illawarra will not change this.
The council questions whether accountability will be improved within the larger areas resulting from the mergers. Larger populations involve greater responsibility and, thus, increased accountability. There is a world of difference between New England and Newcastle. How can there be equitable resource allocation over such a vast area covering so many facilities and so many communities? It is now impossible to find out what has happened to spending on programs constituting only a few million dollars. It will be even more difficult to trace where money is flowing with larger budgets.
The council has also questioned whether community representation can be just and equitable with such large areas and the varied communities within them. A previous speaker asked how we can achieve equitable distribution of funds when there are 47 facilities in one region. The question posited is how the communities in the Greater West can be truly represented on an advisory council when there is a five-hour journey to the head office from the perimeter of the area? Further, if the North Sydney and Central Coast areas were merged, the resulting configuration would be a wealthy community in North Sydney alongside ageing and more disadvantaged communities such as Wyong and Warnervale. Unfortunately, it is difficult to see how this area will be represented effectively when there are totally different community needs. The Government obviously has rushed into this measure. It should have provided examples of how efficiency and accountability will be achieved with more centralised and more authoritarian administration. I believe it is absolutely impossible to show that more centralised and authoritarian administration will provide greater efficiency and more accountability.
The bill proposes to abolish area health boards, vesting their current power in area health chief executive officers. Unfortunately, the main problem with this initiative is that a very real risk of reduced accountability and transparency will emerge. Giving one person the responsibility currently held by the area health boards will allow that person extremely wide discretion. In my view, two heads are always better than one, and 12 are better than one! That is because varied viewpoints are sometimes necessary in order to effectively tackle any issue and to truly represent the many constituencies of an area. The Council of Social Service of New South Wales has also pointed out that:
The proposed abolition of the Boards has the potential to make Area Health Services even less accountable and transparent. An Area Health Service Performance Agreement would at least be able to be a public document available for public scrutiny. However, a CEO performance agreement as with any organisation, would be a private document between the CEO and their Employer...
The bill also sets up area health advisory councils, which will advise area health service chief executive officers [CEOs] on issues that concern them. This proposal has so many flaws that it beggars belief. The report titled "A Clear Voice for Clinicians and the Community" provided by the Clinical and Community Advisory Group is a very suspicious document. It is a gloss production designed to paper over failure and fundamental changes to local accountability for the health system. These councils have a purely advisory role, which means that the CEOs do not have accountability to the representatives of the community to whom they are providing services. That is totally contrary to all modern management practice. In my opinion, advisory councils should be given more powers to enable them to oversee the performance of the subject area health service and CEO.
Also, as suggested by the Council for Social Services of New South Wales, it would be useful if the legislation reflected the recommendations of the mix of members of the area health advisory councils. I was disappointed to read that there would be 13 ministerial appointees to the area health advisory councils. There are already too many ministerial appointees. The council suggested also that it would be useful if the legislation provided some broad guidance on how the members of area health advisory councils will be chosen. There should be an open representative process as opposed to a closed selection process with ministerial appointments.
NSW Health is suffering from a lack of clear vision. It is suffering from a decreased provision of front-line services and an increased number of administrative desks rather than beds. The Christian Democratic Party despairs of the Government's answer to increased demands for services by reducing the health service area boards to advisory councils.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS [6.00 p.m.]: I am concerned about this bill, which does not have a clear vision for New South Wales. I wonder if the flurry of bills is a response to political pressure so that the Government is seen to be doing something. I must confess I have no problem with the view that we need more people on the ground doing things. I worked for almost two years in the British National Health Service in the United Kingdom. In that service clinicians and the administrators were worlds apart. Administrators had taken over even some of the smaller, uneconomic hospitals. One such hospital had been trying to get a new car park for years, and when the administrators were brought in the area was soon paved over. Clinicians had virtually nothing to do with the administration; they certainly had no faith that the administrators would come up with the right resources or do the right thing. That demoralisation resulted in much-reduced patient care.
I recall I was working in a 1,500-bed hospital three nights in five and three weekends in five with another young doctor. At one stage he took three weeks holiday and two weeks study leave, keeping him away from work for five weeks. I was then required to be the orthopaedic registrar first on-call for any accident victim that came to this 1,500-bed hospital in the north of England in the middle of winter. I recall saying that if I was to be on call 24 hours a day for five weeks straight, I would be in a terrible situation. The job could not be done, and I recall going to complain to the administration personnel manager, whose name, interestingly, was Mr Moran. There is no prize for guessing what his nickname was. He said, "We have terrible trouble getting casual staff." I said, "It is even harder if you don't ask or advertise", to which he replied, "But it is terribly hard." He made no effort to engage anyone, and I was on call 24 hours a day for five weeks straight. I did not leave the hospital grounds in all that time.
The point I am making is that this is what happens when administration gets out of touch, and I believe that trend is developing in New South Wales. The question then is: Is this bill the way to reverse that trend? I doubt it. I understand that Ernst and Young have been asked to compile a report on how to cut the number of bureaucrats and increase the number of people involved in direct patient care. It is worrying that this report has not yet been released and this bill is going through with its parameters set so that there will be eight area health services and no forced redundancies. How is it possible for a consultant to make a determination about the number of bureaucrats and service delivery when the parameters of management structure and redundancy are set?
The growth of a health executive service is also a worry. I know that anecdotes should not drive the whole system but I can remember what the situation was when I worked at Sydney Water. The boss at one time was incompetent earning $56,000; when the senior executive service was introduced he was equally incompetent earning $88,000; and he went on to be even more incompetent earning $150,000. It was the same chap earning hugely increased salaries. I am not sure that Sydney Water was well served with a senior executive service.
Area health boards are to be abolished. While travelling around New South Wales with General Purpose Standing Committee No. 2 some years ago I recall people being very distressed about the abolition of local hospital boards, which they believed could relate to local situations. I remember when I was a child my father coming home from meetings of the hospital board in Wollongong—he became the senior surgeon there, but I am not sure that he held that position at the time I am recalling—saying that local businesses were represented on the hospital board and that their expertise was most welcome when matters such as the hospital garbage contract was discussed.
The hospital board was intelligently critical of the CEO and the decisions that were made, and, however long and boring the meetings might have been, there was a creative tension between the board and the CEO. In a sense, the board members were more on the ground than the CEO was, and the CEO was kept on his toes. If the area health boards, which replaced the individual hospital boards, are abolished, advisory councils will be appointed by the Minister, and this will give rise to cronyism or, if not cronyism, the appointment of people known to the Minister for not biting the hand that is feeding them.
The nurses at Campbelltown hospital were unhappy with what was happening. They believed that the service that was being delivered was not in the interests of the patients but they felt that there was no-one they could go to who would stand up to management for them. If there were an area health board that was not appointed by the Government and that did have its roots in the local community, clearly that would be the body to whom one could complain that the service being delivered by a hospital is not good enough. Problems with the lack of resources and with certain personnel must be looked at from outside taking into account the interests of patients. Clearly, if the only alternative to a hierarchically structured system that reports to the Minister directly is an advisory council that owes its existence to the Minister, the alternative is unlikely to respond intelligently to outside forces and to be a neutral feedback loop, in a sense fighting for the community's interest.
The alternative would be to centralise the system in Sydney. That may sound ridiculous to some, but matters such as distance, specialised techniques, centres of excellence that perform operations not available in smaller hospitals, additional funding, the Isolated Patients Transport and Accommodation Assistance Scheme can be discussed and considered in any resource distribution formula that is arrived at.
It makes reasonable sense to run the greater western area from Dubbo. I understand the area is similar in size to Germany, in the sense that it takes one five hours to drive across it. With regard to the Hunter-New England service, which is based in Newcastle, one wonders whether it should be managed from Sydney, given the flight paths of the planes, which all come to Sydney, as opposed to the road network. In the greater southern area all the air services either go to Melbourne or to Sydney. I do not think Queanbeyan is in any way linked by air services or is even on the most direct road route.
The Hon. Patricia Forsythe: It is not on the road route, but Canberra airport is quite significant.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: I am not sure how many flights go from Canberra to Wagga Wagga. Are there many?
The Hon. Patricia Forsythe: That is the point. They do not.
The Hon. Dr ARTHUR CHESTERFIELD-EVANS: Air transport is basically to Sydney. People covered by the Greater Southern Area Health Service are not happy about services being located in Queanbeyan. Having a bureaucracy in Queanbeyan separate from the Sydney bureaucracy will result in people in those areas being two rungs further down the administrative ladder. Those services will move from Ulladulla to Wollongong, and even though Wollongong is closer than Sydney, one wonders whether the added administrative burden will improve services. If there were only one area health service in Sydney, resource distribution formulas would be more equitable between the various existing area health services throughout the State.
It may seem radical to centralise health services, but if the hubs of these eight area health services are so far from the areas they serve, it may be better for the State to be served by only one. Certainly, that possibility should be considered. Port Macquarie is a long way from Lismore yet the North Coast area will be managed from Lismore. Liverpool and Campbelltown, in terms of the Sydney metropolitan area, are quite a distance apart. Wyong, a relatively poor area, is a long way from North Sydney, and it is likely that Royal North Shore Hospital, which has considerable problems, will dominate the scene—although I understand North Sydney and the Central Coast will be managed from Gosford. However, the mix of Sydney's North Shore with Wyong is interesting.
The Council of Social Service of New South Wales [NCOSS] is concerned about the representation of communities in the greater west, as mentioned by my colleague Reverend the Hon. Dr Gordon Moyes. We have heard about huge savings of the order of $100 million resulting from the mergers, but I wonder whether those savings will be realised, particularly if a health executive service is to be created, which usually means bigger salaries for people doing the same jobs. NCOSS is also concerned that the mergers have been implemented from a clinical point of view rather than from the point of view of public health measures, which determine health populations.
The Australian Institute of Health and Welfare, which reported on Australia's health in 1990, produced a graph noting the number of doctors and the neonatal death rate in a large number of countries. It showed that basically neonatal death rates and life expectancy bear no relationship to the number of doctors in any given population. The suggestion was offered in respect of a country's health quality that life expectancy and neonatal death rates increase with mean per capita income up to a level of about $US5,000 per head of population. After that figure, life expectancy and neonatal death rates—the two indices for the health of a population—are more related to the equality of distribution of wealth than to the absolute mean income of a population.
That illustrates the point that if we are talking about health rather than "illness treatment", which has appropriated the word "health" in our parlance, we are talking about the "paying for illness system". Health is being ignored at the public health level. I am not sure that the reforms in the bill deal with the key issue raised by NCOSS relating to the efficiency of health promotion across the existing 17 levels. Statewide we should concentrate on areas with poor health benchmarks. Whether that will happen with these fewer empires is another question. It might be argued that the area health service boards will be too large for local contact and too small for the big picture. They are neither one thing nor the other. The Government wanted to be seen to do something, so it introduced this bill.
NCOSS considers accountability of area health services to be a key issue. I am not convinced that the bill is even necessary or that it is timely. I acknowledge the Minister's remarks that Wendy McCarthy and Ian Sinclair, as part of a clinical advisory group, have consulted some people. However, I am not sure that the bill is the answer to the problem. The matter needs further consideration, and I am not sure that I will support the bill.
The Hon. RICK COLLESS [6.16 p.m.]: I place on the public record the disquiet expressed by communities in the Northern Tablelands that have missed out on having their concerns aired in the Legislative Assembly on a number of bills during this session of Parliament. The member for Northern Tablelands did not contribute to debate on this bill; the Health Legislation Amendment (Complaints) Bill, and cognate bills; the Health Legislation Further Amendment Bill, which was passed by the Parliament yesterday; the Registered Clubs Amendment Bill; the Threatened Species Legislation Amendment Bill; the Gene Technology (GM Crop Moratorium) Amendment Bill; and the Smoke-free Environment Amendment Bill. In fact, the member for Northern Tablelands has not made a contribution to the second reading debate on any bill since 1 June 2004, and has only made three contributions this calendar year.
The Hon. Charlie Lynn: What does he do?
The Hon. RICK COLLESS: That is a very good question. The people of Northern Tablelands are not having their voices heard in the Legislative Assembly on issues important to them. The people of Northern Tablelands and New England are very concerned about this bill, as was demonstrated by the huge protest rally recently held in Tamworth that was attended by 800 people from all over the region. There was enormous concern in the north-west when the New England Area Health Service was established many years ago. This concern focused on the centralisation of power and decision making, with smaller communities such as Tenterfield, Glen Innes and Inverell becoming subservient to the larger areas of Tamworth and Armidale.
The bill proposes to abolish the 17 area health service boards and create eight much larger and potentially unmanageable regions. The concerns expressed previously by people of Northern Tablelands are now magnified many times. The original health service will be expanded to include the current New England and the Newcastle area health services, administratively an area from Wallangarra, which is on the Queensland border north of Tenterfield, south to Lake Macquarie, which is south of Newcastle, and west to places like Goodooga and Collarenebri, which are west of Moree. This will create an unmanageable monster that will not guarantee the provision of improved medical services for the people of Northern Tablelands and the small communities within that proposed area.
The Inverell community has expressed concern about a loss of health jobs, both clinically and administratively, as a result of the amalgamation in Inverell. The Minister's response was the offer for Inverell to host the payroll division of the new health service. Although that offer is supported from the perspective of maintaining administrative jobs in Inverell, it will do absolutely nothing to guarantee the provision of clinical services at Inverell Hospital and other small hospitals such as those at Tenterfield and Glen Innes. Why has the honourable member for Northern Tablelands not taken up this issue? Why did he not raise this issue on behalf of the people of Inverell during the second reading debate on the bill in the other place? Is it because he is totally parochially focused on his pet project, which is the reconstruction of Armidale hospital, at the expense of all other health facilities within his electorate?
Staff members at Inverell hospital have pleaded with the local council to do something to guarantee that clinical services will be improved or at the very least maintained at the hospital. The people of the Northern Tablelands, including medical staff, are crying out to have their voices heard about this nonsensical amalgamation. Greater centralisation will result in no local input into the big decisions and a reduction in the provision of local medical services. Nurses are also concerned that the larger area health service will affect the responsibility and authority currently enjoyed by the nursing profession, albeit in a declining form at present.
Country communities have long been concerned about nurse recruitment in rural areas, particularly in smaller hospitals. Nursing staff in many country hospitals have an average age that is only a couple of years below the accepted retirement age for nurses. This bill will do nothing to stimulate the movement of nurse trainees into the industry, and the current model of sending nurses to universities for initial training means that few nurses are encouraged to return to their home towns in the country, such as Inverell, Bingara, Barraba, Warialda and Wollar, which have small hospitals and simply cannot get nurses. If nurses were to receive their training in country hospitals while making part-time or external arrangements for their academic training, a huge pool of potential nurses would suddenly appear in smaller country towns.
There is also a developing problem with physiotherapists. They are generally located in larger country hospitals, but hospitals are now only employing—believe it or not—first year graduates and are not renewing their contracts in year two. The only reason for enforcing such a nonsensical policy must be to save money—money that the area health service will be able to transfer to bureaucratic expenses and the unmanageable, burgeoning administrative system that will develop as a result of this bill. The end result of the physiotherapist situation is that there will be new positions for year one physiotherapy graduates but no opportunity for progression to year two within the public hospital system.
Year two graduates will be required to find positions in the private health system, with the public system reneging on its responsibility to complete the training of newly graduated physiotherapists. I have outlined some of the concerns of the people of the Northern Tablelands and the communities that rely on the New England Area Health Service for the provision of health and medical services. The people of the Northern Tablelands and officers of the New England Area Health Service wish to see a return to a more decentralised health administration model, not a more centralised model. As such, I am opposed to the abolition of the 17 area health services and the creation of eight larger boards, which will prove to be totally unmanageable. Therefore, I oppose this bill.
Ms SYLVIA HALE [6.23 p.m.]: The Greens are opposed to the amalgamation of 17 area health services to form eight, which will result in the administrative centres that make decisions about health service delivery being more remote and removed from the communities they are supposed to serve. Some of the proposed new areas will be enormous. The eastern suburbs of Sydney will be in the same area as Nowra; the North Shore will be lumped in with the Central Coast; and the Greater Murray region will stretch from Bega to Hay—an area the size of Victoria. The Macquarie Area Health Service will be merged into an area more than three times its present size, and the new greater western area will stretch from Dubbo to the Queensland, Victorian and South Australian borders. Obviously this will result in fewer services for people in the bush.
The needs of areas such as Nowra and the Central Coast, which have some of the most disadvantaged communities in the State, are different to those of the affluent North Shore or eastern suburbs. One does not have to be Einstein to work out that the needs of regional centres will be overshadowed by city issues, with small country towns and large urban centres being serviced by the same area service. In the case of the Greater Murray area, the distances are so great that the administrators will find it almost impossible to get to all parts of the new area with any regularity. Recently I travelled to Dubbo. All the residents I met there were unanimous in their view that amalgamations of this scale were universally bad for the bush.
The Hon. Michael Gallacher: I hope you got some media while you were out there—for the Labor candidate!
Ms SYLVIA HALE: I was there supporting the Greens candidate. He was the Greens candidate at the Federal election, and he is the Greens candidate in the Dubbo by-election. Unlike the Labor Party, we are standing a candidate in the Dubbo by-election. Be that as it may, we share the concerns of the bush about these area health services and the disadvantages they will produce. One thing that strikes me is that there are elements of this legislation that are common to elements in other legislation that has been passed by, and is about to come before, this House. That is the way it seems that the Government is devising mechanisms to prevent boards from being accountable. They are now all advisory boards. This is of major concern for people in the bush. Interestingly, the following is the very first concern mentioned in the report of the Clinical and Community Advisory Group entitled "A clear voice for clinicians and the community", which came out in October 2004:
Many people saw risks in the larger size of the AHSs and the location of the new Area offices. It was feared that these would lead to a centralisation of managerial control and delays in decision-making in relation to local health services. The smaller and more remote communities were apprehensive that their voice would not be heard at the Area level.
It seems that the Government has gone through the process; it has paid lip service to consultation. The group went around the State and supposedly spoke with 2,300 people. The first concern is the lack of accountability and the remoteness of these advisory boards. There is also concern about the manner of the consultation. The report stated further:
Some comments were made about the adequacy of the notice for several meetings … and the time of day at which some meetings were held.
Anyone who was involved in the debate about local council amalgamations will know that those same complaints were made about the so-called consultation that preceded the amalgamation of many rural councils. So the Government obviously has a technique in this regard. It says, "We have met and talked to you", but it avoids and ignores any feelings expressed at such meetings and then ploughs ahead and does what it wishes. The Government wants to put in place boards consisting of government appointees that are in no way accountable to the communities they are supposed to represent. A second issue was raised in the report. It is not addressed in this bill, but I think it is reminiscent of all the concerns raised in relation to council amalgamations. Concern was expressed about a potential reduction in particular positions within the new area health services, including staff working with local Aboriginal communities. Rural residents were anxious also about the implications of the reforms for local employment opportunities and local businesses, including the sourcing of contracts and supplies.
Those concerns are identical to those raised during the local government amalgamation process. One of the justifications the Government makes for this rearrangement is the repeated savings it will achieve. As the Hon. Dr Arthur Chesterfield-Evans said, there has been no indication as to how those cost savings will be made, but presumably the health executive service will presumably wish to be remunerated at the executive service level. So, we may see a blow-out of salaries at the top of the tree and a loss of jobs, services, and on-ground people and staff at the bottom level. I fear this is the Government's recipe for systems reform.
This is not the first occasion on which the Government has resorted to centralisation as a means of appearing to address problems. It did it with councils and it has also been done with the TAFE system. If you have a problem, you give the appearance of addressing it by concentrating power and when, after a few years, that does not work because it does not really address the fundamental problem at the heart of the matter, you decentralise again. You get this yo-yo effect which serves no-one but the Government. It creates a smoke and mirrors effect that something is being done.
There is considerable concern within the community. The Council of Social Service of New South Wales and other bodies are certainly greatly concerned about the lack of transparency. The Greens will move an amendment to the bill to endeavour to ensure that the advisory boards and the system are accountable to the communities they represent. The amendment will require the area health services to produce annual reports, the contents of which will be judged against a series of performance indicators. As I have said, we are greatly concerned. If these boards are to be set up, they should be representative of the community, but their areas are so large that it is impossible for them to be representative. The clinicians and communities report says:
It was generally recognised that it would not be possible for a group relatively small in number to "represent", in any direct sense, the many and varied stakeholder interests within an AHS, and that Council members' individual and collective skills would therefore be an important consideration.
It is impossible for anyone to have the range of skills required to adequately reflect the diverse interests of so large an area. As I say, the Greens do not support the bill, and we will seek to amend it.
[The Deputy-President (The Hon. Kayee Griffin) left the chair at 6.34 p.m. The House resumed at 8.15. p.m.]
The Hon. JON JENKINS [8.15 p.m.]: The reforms to the health system are trying to achieve a balance. I initially told the Government that I would support the bill but after listening to Reverend the Hon. Dr Gordon Moyes I have some reservations, which I have informed the Government of. The question is really whether the Government has the right balance between a top-heavy bureaucratic structure and a bottom-heavy unresponsive structure. I have told the Government that if it appoints some of its party faithful or political mates there will be no improvement, there will just been more of the same. It is obvious that the current system has faults and is not working well. That is why the people on the advisory committee employed to advise on the health system have reported as they have.
It might be prudent to remind the Government of what its colleague Peter Beattie said recently in the Queensland Parliament. He reminded people that just a short time ago the Queensland people overwhelmingly elected a State Labor Government, but that just a few months later they overwhelmingly elected a Liberal-Nationals Government. The same people voted Labor but within a few months voted Liberal. Peter Beattie concluded from this—I agree with him, as I have said before in the House—that the face of politics is changing. People do not slavishly vote for a particular party any more. People who have previously voted Labor all their lives do not necessarily vote Labor any more; and the same applies with people who previously voted for the Liberals. People are looking for good governance and good policy.
I encourage the Labor members to listen to the Labor Premier of Queensland. Obviously they will not listen to me—I am not terribly important to their plans—but they should listen to a Labor Premier who is telling them the same thing: that people are looking for good governance and good policies. My main concerns are for the regional areas; they are the areas that will lose out. They already have poor services, or no services in many cases. They have poor representation. I am interested to see whether the Opposition has some useful suggestions for amendments in this regard. Instead of just criticising, they should come up with something decent to try to fix the situation.
The Hon. Don Harwin: We already have, in the lower House.
The Hon. JON JENKINS: I acknowledge the interjection, because I have experience of the old days with hospital boards. I understand the reasons they would like to go back to the old system. But the old system had serious problems as well. Hospital boards became personal fiefdoms. They were very unresponsive to the impetus for change. So I do not necessarily agree that just going back to the old system would work. I will take some advice on that. I truly hope the health executive service, in whichever form it comes, does not simply become another retirement desk for party hacks. If the Government puts good people on the advisory committees, the local boards—whatever the Government wants to call them—it will get good advice and a good health system.
The Hon. JOHN DELLA BOSCA (Special Minister of State, Minister for Commerce, Minister for Industrial Relations, Assistant Treasurer, and Minister for the Central Coast) [8.22 p.m.], in reply: I thank all members of the House for their contributions to the debate, during which a number of important issues were canvassed. We should focus on the fact that this is an issue of great concern to the community. The Hon. Jon Jenkins made the point that the community has certain expectations about the provision of basic services, including health services. The community response to public health services is based on a requirement for excellence and identification with public need rather than, as he perhaps rather inelegantly put it, the appointment of political favourites and those who owe their appointment to some regional or local trade-off rather than to a commitment to community service and a capacity to provide feedback to the Government and clinical staff about the needs of the community.
I can assure him and the House that the Minister and the Government have no intention of returning to the kind of world he suggested. Opposition members and some other honourable members have suggested that this bill establishes a new area health service structure. The bill does not provide for the establishment of the eight new, larger and more efficient area health services that commence operation on 1 January 2005, and it does not provide for shared corporate service reform. Enabling legislation for those reforms, the Health Legislation Further Amendment Bill, was passed by this House today, so the changes required to ensure that the new area health service boundaries are in place on 1 January 2005 have already been made.
Area health service boundaries are established by way of a Governor's order. The Government moved to establish the new boundaries on 27 July 2004, when the Planning Better Health reforms were first announced. The 17 area health boards were immediately removed and replaced with eight administrators who have been responsible for managing the transition to the new area structure. It became clear in October that the administrators would be able to achieve the 1 January commencement date for the new boundaries, and, accordingly, the Governor made the Health Services (Amalgamation of Area Health Services) Order 2004, which was gazetted on 22 October. The order provides for the amalgamation of the existing 17 areas into the eight new areas on 1 January.
The current boundaries no longer reflect New South Wales' population distribution, make-up and growth, health work force distribution, and patterns of clinical referrals and patient flows. They do not take into account improvements in communication, transport and travel times, and impact on the way area health services can be delivered. The new, reduced administrative duplication and inefficiencies and the improved consistency in the way health services are delivered, encourage the building of better clinical networks, enhance academic and teaching linkages, break down barriers that currently limit the fairer distribution of the health work force, and facilitate much-needed corporate and business support services reform.
There have also been comments that the Government's reforms will result in a loss of hospital services, particularly in rural communities, and that the Government will not be able to manage a reduction in the health administrative work force to realise the $100 million savings the area reforms and the shared corporate services reforms will achieve. All the Planning Better Health reforms, including those dealt with in this bill, are designed to improve area health services across New South Wales.
In developing the Planning Better Health reforms, the Government has been particularly mindful of the needs of smaller rural communities. The reforms seek to streamline area health administrations and the health executive, not the clinical services provided from local hospitals. Local hospitals will continue to provide services and have their own management structures in the area framework, as is currently the case. The amendments moved by the Opposition in another place will cost taxpayers an estimated $18 million a year in administration. That is $18 million that could be better used to provide 813 total knee replacements, 915 total hip replacements, 9,264 cataract extractions, 820 cochlear implants, 997 heart bypasses, or 4,668 baby deliveries. It could employ 320 nurses or 120 staff specialists.
The new area health boundaries will reduce administrative duplication and inefficiencies and improve consistency in the way area health services are delivered. Where efficiency savings are made in rural areas, the savings will be used to employ additional front-line clinical staff and provide other clinical services in the area. The large areas will also open up a range of new services closer to patients' homes. For example, the administrator of the mid North Coast and Northern Rivers area health services has advised that the establishment of the new North Coast Area Health Service will enable a broader range of people to access the multidisciplinary pain management clinic opened at Lismore Base Hospital in February 2003. Some patients who live closer to Lismore than Port Macquarie have previously had to travel to Port Macquarie for gallbladder and pancreatic health care services. They will now be able to access those services at Lismore.
The Hunter Area Health Service has identified strengths in providing mental health services and the statewide Child and Adolescent Mental Health Care Network, which is managed by the Hunter Area Health Service. It provides and co-ordinates inpatient and community care services for children and adolescents across the State. The amalgamation of the Hunter and New England area health services will support more equitable access to mental health beds in the New England area.
Cross-facility access to patient records will also improve patient-care flows. The reforms will encourage greater clinical networking and enhance academic and teaching links. For example, the New England Area Health Service has no tertiary referral hospitals and New England clinicians will now benefit from having links to the John Hunter and Mater tertiary hospitals. More doctors will seek to work in the area so they can benefit from links with those tertiary hospitals. The reforms will also help break down some of the barriers that limit the fairer distribution of the health work force, and health area services will be better able to encourage clinicians from well-served parts of the region to take up positions where the need is greatest.
In relation to job losses arising from the restructure, the Carr Government and Country Labor can be justifiably proud of how they have created additional public sector jobs in country New South Wales. Since 1995 the Government has created approximately 2,890 public sector jobs in rural and regional New South Wales and has relocated approximately 1,940 more. By the end of 2005 about 2,500 government jobs will have been relocated to regional New South Wales, and approximately 3,400 more will have been created. Examples include a range of services across a range of departments. The area restructure will result in the loss of some administrative and management positions, although the greatest losses are anticipated to occur in the larger metropolitan area health services. However, the savings that are realised will be able to support new clinical jobs.
The Government has been completely up-front in acknowledging that some support positions will be lost and understands that job losses are particularly noticed in smaller rural communities. The Government's Shared Corporate Services Management Program will also result in some administrative positions being shed, although savings will also be achieved through improved economies of scale and purchasing arrangements. There is a popular misconception, promoted by some irresponsible members of the Opposition, that shared service reform means country jobs will all be centralised in Sydney. This is not the case. One of the guiding principles for the shared corporate services strategy is that regional and rural employment and economic development opportunities will be considered in developing the shared services model.
On the one hand Mr O'Farrell has criticised the Government's Planning Better Health reforms for resulting in the reduction of administrative jobs. On the other hand, he has criticised the Government's policy of no forced redundancies. Of course, the Opposition does not want to be seen to be supporting reforms that will result in any job losses, however necessary, but when job losses do occur the Opposition wants us to impose forced redundancies on people. The Government believes it has a duty to those officers who will lose their positions as a result of the reforms.
NSW Health is the largest employer in New South Wales and therefore has a comparatively high number of staff lost through attrition each year. Some of the impacts of the reforms can be absorbed through not refilling positions that have been lost through natural attrition. NSW Health also finds it easier to redeploy removed officers in other useful work, given its size. Where attrition and redeployment are not preferred options, NSW Health may provide a voluntary redundancy program, consistent with the Government's policy of no forced redundancies.
The Government estimates that around 625 management and administrative positions in area health services will be deleted as a result of the restructure of area boundaries. These calculations were made with reference to a comparison of clinical to administrative staff employment ratios, with it being acknowledged that rural areas need a greater proportion of administrative staff, given their size and the variety of communities served. The precise number, type and location of positions to be deleted in every separate area will be able to be accurately determined after the new area organisational structures are finalised, which is currently taking place in consultation with the Labor Council and health service unions.
The various health service audits all require the Government to consult on significant workplace changes. That consultation process will run its course before final decisions are made on job losses in particular communities. The Planning Better Health reforms will, over time, free up $100 million a year that is currently spent on health administration. The savings will be reinvested in front-line clinical services in the areas that deliver them. The area health service boundary changes are expected to result in savings of $40 million a year when new area establishments are in place. The abolition of area health service boards is expected to save around $2 million a year after area health advisory councils are established. The remainder of the savings will be delivered by NSW Health's Shared Corporate Services Program.
There is a long history of reforming corporate and business services across the New South Wales public health system. In the first half of the 1980s each hospital was essentially responsible for its own corporate and business support services. The inefficiencies of this system have been progressively reduced by both Labor and Coalition governments with the introduction of area health services in metropolitan areas, the subsequent reduction in their number, the introduction of district boards in rural areas and then their replacement by rural area health services.
NSW Health has a clear track record of successful corporate and business support service reform and in realising the expected savings and benefits. The $100 million per annum in savings that will be released over time as a result of shared corporate service and area health service boundary reforms is achievable and the Government has committed to an independent audit process to ensure that savings targets are met. The proposed abolition of area health boards will enhance accountability in health service management, not detract from it as some honourable members have suggested.
The bill provides that the responsibility for area health service governance lies with the chief executive and their management team, subject to the direction and control of the Director-General of the Department of Health who is, in turn, accountable to the Minister for Health. Area health advisory councils are, as the name would suggest, advisory, not governing bodies. Working with local health participation groups they will be far more effective than boards in bringing the views of the community and clinicians to the attention of the area health service executive, because that is their specific function.
The Planning Better Health reforms, including the abolition of boards, are all geared towards improving accountability in health administration. On 17 April 2004 the Sydney Morning Herald reported the Leader of the Opposition's commitment to the abolition of area health boards because they reduced ministerial accountability. Whilst the Leader of the Opposition has retreated from his previous sensible position, the bill provides for a clear line of accountability from the chief executive, to the director-general, to the Minister for Health. Of course, area chief executives cannot manage an area health service by themselves and the Government's reforms do not provide for that.
While some differences in management structures are needed to address local variations, there needs to be far greater consistency in health service management. The inconsistencies make it harder for staff moving across areas to adapt to their new work and harder for the department and Government to monitor the activities of health services. The new area health management structures will improve area health service accountability. There are a number of board subcommittees and other bodies that have assisted in running area health services, such as the finance and budget committee, audit committee, ethics committee, clinical quality committee and medical staff council. All of these bodies have continued to operate since the boards were removed and administrators appointed. These committees have continued to work well in supporting the administrators, and we need to ensure that their valuable work continues.
Proposed sections 29A and 52E specifically recognised the powers of chief executives of health services to establish such committees. Proposed sections 39 (1) (g) and 60 (1) (h) extend the by-law making powers to include matters relating to area committees and councils with the director-general or, in the case of board-governed statutory health corporations, the Minister, able to establish model by-laws as to how such committees and councils will operate. This bill and the associated reforms to health administration provide for more efficiently managed and accountable health services. The Coalition deserves some credit for its approach to modernising health service administration in the late 1980s and 1990s. It was the Coalition, in 1988, that reduced the number of area health services in metropolitan areas from 23 to 10. It was the Coalition, in 1993, that abolished 111 public hospital boards in rural areas, moving towards a more co-ordinated district system of administration which mirrored arrangements for metropolitan area health services.
In 1996 the Coalition supported the Government's extension of the area health service system to non-metropolitan New South Wales, establishing the current 17 area health services and dispensing with district boards. The Government's reforms are a natural extension of those earlier important reforms, supported by both sides of this Chamber. In January 2003 the Opposition about-faced and announced that it would re-establish 90 hospital and district boards. In April 2004 the Leader of the Opposition again turned 180 degrees and stated that he would abolish the 17 area health boards as boards blurred the lines of accountability in health administration. Now the Opposition wants to retreat from its previous sensible position and again reintroduce hospital and district boards.
I admire the Coalition and the speakers during this debate for their flexibility on this issue. It must be incredibly difficult to backflip and turn back the clock at the same time. I would like to quote from an exchange between the Hon. Melinda Pavey and the ABC Mid North Coast's Graham Robinson, which illustrates some of the difficulties with the Opposition's policy. Mr Robinson said:
I mean, we've got the large area health services, we couldn't have district boards jotted along those really, and have a functioning system, could we?
The Hon. John Ryan: She hasn't even contributed to the debate.
The Hon. JOHN DELLA BOSCA: She is here in spirit. Ms Pavey asked:
Why not?
Mr Robinson said:
Well, why wouldn't you have too many boards trying to input into one central organisation, too many …
Ms Pavey interjected to defend district boards before Mr Robinson asked:
Would it be cohesive enough though? I mean, seriously do you think if you had a board at every reasonably sized town, every reasonably sized hospital, would you really have any cohesion? Wouldn't it be just all the boards again arguing for what they wanted in their small hospital but with no cohesion for running the area health service?
Here's to you, Mr Robinson. These are very sensible questions. The reintroduction of district and hospital boards will not improve health service governance or community involvement in health service decision making. What it will do is add layers of bureaucracy to the public health system. The existence of the 17 current area boards already leads to some conflict between areas, with boards making decisions they believe are for the benefit of their own areas, rather than the health system as a whole. The Government's reforms are designed to promote areas working co-operatively together, not competing with each other. The Opposition always wants the detail, so I am giving it. The Opposition's policy also assumes that health is just about hospitals. This ignores the important role played by community and public health services, aged care facilities, and the like.
The Opposition's policy also assumes that each hospital is responsible for providing its own services in isolation of other hospital services. This ignores the move away from facility-based planning to clinical streaming supported by clinical networks. For example, it will be better for experts in cardiac surgery to manage the way cardiology services are run across a number of hospitals, rather than have each hospital do its own thing. The Opposition's proposed amendments would create enormous structural anomalies in the public health system and. militate against any cohesive move to the integration of clinical services across area boundaries or across the State. It will be a fatal blow to the advance to integrate acute and community health services in order to ensure a well co-ordinated and seamless delivery of services to patients. Under the Opposition's amendments the chief executive of an area will be accountable to a multitude of masters, who may pull in different and sometimes contradictory directions.
The Hon. Robyn Parker: Will you reply to some of the concerns that we raised?
The Hon. JOHN DELLA BOSCA: I am dealing with the big picture.
The Hon. Robyn Parker: You are supposed to be replying to us.
The Hon. JOHN DELLA BOSCA: It is a reply to you. It is a reply to every single issue you raised. On the one hand, the chief executive officer will be directed by the board of each public hospital with more than 4,500 admissions each year located in their area health service. They can also be directed by the district board for those hospitals in their area that have less than 4,500 admissions each year. To add to the complexity, the chief executive can be directed by the director-general in respect of all matters unrelated to the affairs of the hospitals.
For example, in the new Sydney South West area, under the Opposition's proposed amendment we will have around nine local hospital boards directing operations for their particular hospitals, at least one district board directing operations for about another four hospitals and the director-general directing whatever is left. Hardly a good recipe for streamlined and sensible corporate governance, and sensible health service planning and delivery! Is the Opposition seriously suggesting this confusing and conflicting style of corporate governance? I give an example of how the Opposition amendment would disrupt clinical networking in the lower mid North Coast region. Manning Base Hospital and John Hunter Hospital are currently the clinical services hub in a network involving smaller hospitals in the region.
Under the Opposition's proposals those big hospitals, with their own local hospital boards under a separate governance structure to all the smaller hospitals in the network, will act in their own interests and focus their services on their own needs. This will result in a loss of expertise and support to the smaller hospitals, many of them rural. To top it all off, these boards will be totally unaccountable to the public through government. Under the Opposition amendment neither the Minister nor the director-general has the power to control the provision of hospital services. Neither the Minister nor health managers will be accountable for hospital services. When boards decide to issue directions contrary to the overall interests of the health system and in the interests of one community, the health system will suffer. Under the Opposition's amendment it is not clear when there will be a single hospital board or how many district boards there will be.
The Hon. Robyn Parker: Which amendment?
The Hon. JOHN DELLA BOSCA: The foreshadowed amendment. According to the Opposition, there will be a local hospital board when the average admission is 4,500 per year. What does this mean? Does it mean that when admissions fall below 4,500 in any particular year, someone will say to the board, "Sorry, you're gone because we've only had 4,499 in the last year"? Who knows? The amendments certainly do not shed any light on this. The Opposition has been dishonest about the effects of its own policy. The Hon. Don Harwin has wrongly stated that many smaller rural hospitals will have hospital boards under the Opposition's policy, and he used Milton hospital as an example.
The Hon. Don Harwin: Don't tell lies about Milton hospital. I know the policy. I wrote it.
The Hon. JOHN DELLA BOSCA: That is modest. The Department of Health has advised that the most recent annual admission figures for Milton-Ulladulla Hospital were 2,509. The Opposition is misleading rural communities that they will have local hospital boards. Under the Opposition's policy only about 18 rural hospitals would have a local hospital board, and 115 would not.
The Hon. Don Harwin: That is not true. Milton hospital would have a board.
The Hon. JOHN DELLA BOSCA: The Hon. Don Harwin will get his chance to speak. And when do we have a district board? Again the amendment allows for as many as there are hospitals with less than 4,500 annual admissions, whatever that means. The Opposition wants to take us back to circa 1929 and the days of the old Public Hospitals Act when institutional hospital care was the norm and systems of integrated and co-ordinated community care and population health systems were either non-existent or completely separate. We have moved a long way from that over the years, culminating in the area health service system introduced by the Labor Government in 1986, and built upon and refined by successive governments, Labor and Coalition.
Getting down to the machinery of the boards, the Opposition clearly cannot make up its mind whether it wants to pay these board members. In debate on this bill in the other place the honourable member for Ku-ring-gai directly criticised the payment of board members. He said, "Participation on boards will be voluntary". However, the Opposition's amendment declares the board members' offices to be "honorary". In the next breath it is suggested they can be paid whatever the Minister decides. Then there is the cost of all these boards, however many we end up with. Department of Health estimates indicate that it costs about $200,000 per annum to support a hospital board. Of approximately 218 hospitals in New South Wales, about 57 have more than 4,500 admissions—37 of them in metropolitan areas.
Providing hospital boards for the 57 hospitals would cost $11.4 million. It is not clear how many district boards the Opposition would establish, but assuming they return to 23 rural district boards, as was the case under the previous district structure, that would be one district board per five rural facilities. Applying this ratio for metropolitan district boards would result in there being nine metropolitan boards. The cost of 32 district boards would be $6.4 million. The total cost would be $17.8 million—and that is before we even start thinking about remunerating the members. The Opposition amendments will be the death of clinical networking in this State and any semblance of sensible corporate governance in the public health system.
They will result in health services in our smaller rural communities withering on the vine. The Opposition's policy of restoring local and district boards creates new layers of bureaucracy, diverts resources away from front-line care, encourages isolation and division rather than co-operation, compromises community and clinical participation, ignores non-hospital health services, and ignores clinical streaming and networking. The Hon. Don Harwin asserted that the Government's reforms will reduce local community input into health service planning. The Health Services Act provides that area health services are to consult with health professionals and encourage community involvement in health service planning, but has never been sufficiently prescriptive as to how this should occur.
The corporate accountabilities for area health boards also provide that boards are responsible for ensuring structures and strategies are in place to actively and genuinely engage local communities in planning and decisions affecting delivery of health services. Notwithstanding this and the good intentions of area board members, boards have generally struggled to successfully engage clinicians, and particularly the community, in health service planning and delivery. The New South Wales Independent Pricing and Regulatory Tribunal [IPART], in its September 2003 report entitled "New South Wales Health—Focusing on Patient Care", highlighted the problems of the current system in this area.
The role of boards has been one of governance and, quite properly, board members have generally focused their attention on corporate governance matters, such as financial management, risk management, work force development, medical appointments, research, et cetera. There has also been fundamental tension between the boards' governance role and the necessary community and clinician advocacy and advisory roles identified by IPART. Area health advisory councils will be entirely dedicated to bringing health consumer, community and clinician views to the attention of the highest level of area health service management and to reporting back to clinicians and the community.
In recognition of the geographical size of the new areas, the Minister for Health will appoint 13 members to the area health advisory councils for the new Greater Western, Greater Southern, North Coast, and Hunter and New England area health services. It must also be remembered that area health advisory councils are not intended to be the only voice for communities in health service decision making. Area health advisory councils cannot be directly representative of every single community or health interest group. If they were, they would be so large as to be unworkable. As the Government has made clear from day one, all existing local health participation groups will continue to operate. As noted by the Clinical and Community Advisory Group:
The success of AHACs will depend in part upon local health participation groups undertaking vital linking work … at the local level and then feeding up to the AHAC those issues which need to be considered and addressed at an Area level.
An important part of the Area Health Advisory Council's role will be to review these existing local level community participation arrangements. There will be no legislative principles for contract of employment or requirements for performance review. Health executives will continue to be employed by different health organisations, increasing the scope for the inconsistent management of health executives.
The Parliament will lose an opportunity to facilitate an integrated approach to executive development and promotional opportunities within NSW Health; a consistent approach to executive performance management and review within NSW Health; and clear lines of accountability of senior health executives, through chief executives to the director-general, consistent with the director-general's already established role of monitoring the public health system and performance review of public health organisations and chief executives. The reforms in this bill, which we expect to be carried unamended, are sensible and will improve health services and accountability across the health system. I commend the bill to the House.
Question—That this bill be now read a second time—put.
The House divided.
Ayes, 18
Mr Breen
Ms Burnswoods
Mr Catanzariti
Mr Costa
Mr Della Bosca
Mr Egan
Ms Fazio | Ms Griffin
Mr Hatzistergos
Mr Jenkins
Mr Kelly
Reverend Nile
Mr Obeid
Mr Oldfield | Mr Tingle
Mr Tsang
Tellers,
Mr Primrose
Mr West |
Noes, 13
Dr Chesterfield-Evans
Mr Clarke
Mr Cohen
Mrs Forsythe
Mr Gay | Ms Hale
Mr Lynn
Ms Parker
Mr Pearce
Ms Rhiannon | Mr Ryan
Tellers,
Mr Colless
Mr Harwin |
Pairs
| Mr Macdonald | Ms Cusack |
| Ms Robertson | Mr Gallacher |
| Mr Roozendaal | Miss Gardiner |
| Ms Tebbutt | Mrs Pavey |
Question resolved in the affirmative.
Motion agreed to.
Bill read a second time.
Consideration in Committee ordered to stand as an order of the day.
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