Dr Kerryn Phelps, AMA President, with Jeremy Cordeaux, Radio 5DN

7 Feb 2002

CORDEAUX: President of the Australian Medical Association, Dr Kerryn Phelps is in Adelaide today to highlight the problems of our State health system. We obviously do have problems in our hospitals. People are obviously not getting the service that they expect, but what can we do about it? Is more funding the answer?

The National Productivity Council last week - and I've made mention of it several times - reported that we spend more money on health per head of population than any other state in Australia and yet there are still people waiting hours to get attention. One wonders what they must be doing interstate. Our elderly are taking up hospital beds because they can't get into nursing homes. Maybe that continues to be a problem. Doctor, how are you?

PHELPS: I'm well, Jeremy. How are you?

CORDEAUX: Well, I'm glad you are well. It'd be terrible if you weren't. Are you with me?


CORDEAUX: Now, tell me, make some sense of this Productivity Commission snapshot. How could it be that we've got so many problems with our health system and yet we are so much-- we are spending so much on it?

PHELPS: Well, I think that each state has special circumstances. But there's no question that the indicators are there that South Australians are missing out on some fundamental services in their health system. For example, you might ask your listeners how many of them have had trouble getting a relative into hospital, having an elderly relative taken care of in a nursing home facility; if they've needed, for example, drug and alcohol services, …were they available to them.

CORDEAUX: OKay. Now, if we're spending more than anybody else and we're still not doing the job properly, how much more do you think we'd have to spend to give people what they expect?

PHELPS: Well, it comes down, not only to the absolute level of funding, but the way that money is spent. And I don't think either of the parties has taken the time, prior to this election, to develop a vision for the future of South Australia's health system. And from the information we have to hand, what we need is structural reform, not minor renovations.

CORDEAUX: Structural reform not minor renovations. Well, that's a question of taking, perhaps, the same amount of money and prioritising it differently?

PHELPS: Indeed. And I think we do need to look at the way that money is being spent in South Australia's hospitals and community health services and how it might better be spent. But there's no question that the morale in the hospitals, the morale in medical practice, wherever I go in South Australia, is not good.

I'm meeting a group, today, of Accident and Emergency doctors, and there are major problems in Accident and Emergency. There's been a loss of three A&E doctors at Flinders Medical Centre, for example. Overcrowding is having a big effect on the staff. Doctors just don't want to be able to have to accept a stressful environment anymore.

CORDEAUX: If we're not spending the money in the right places, who is to blame? Is that the medical bureaucracy? Or is it doctors who don't have sufficient input? Is it the Minister? I mean, who do we blame?

PHELPS: Well, I think that rather than looking at a culture of blame, I think we need to look to a vision for the future. And the problems, if they are in the way the Department is administering the health system, need to be addressed. And that's where I talk about structural reform. But you can't do that at bureaucratic level. You must listen to the doctors and the nurses, the other health care workers, who are working at the coalface with patients every day.


PHELPS: They're the ones who can see where the problems are and where issues need to be addressed. And I think that a government who is prepared to sit down and talk to the health workers who are doing that day-to-day work, hands-on, with patients is a government who is going to get the answers right.

CORDEAUX: Well, I've had a bit to do with Dean Brown, and it strikes me that he is one who would listen to what the doctors were saying.


CORDEAUX: Is he getting the right kind of feedback?

PHELPS: Well, there's no question that the AMA has been pulling out all stops in an effort to make sure that the public and the Minister is aware of the problems in the system. But, of course, he has to be backed up by Treasury and he has to be backed up by his Department. So certainly I think the sorts of issues that we're talking about in terms of priorities: we're looking at funding for public hospitals, funding for mental health initiatives because mental health is an area that has emerged as a major source of difficult for South Australians, …Accident and Emergency Departments, lack of aged care beds.

It's not, also, just a State issue. There are also grey areas between State and Commonwealth responsibilities: where we get tangling of wires, where we get shifting of blame from one level of government to another. Aged care is one area where this is absolutely rife.

And I think it's extremely important that the Commonwealth and the States are able to communicate on a much better level. And I think that with the Health Care Agreements coming up in about eighteen months' time, that will be an ideal opportunity to see how that communication can be improved.

CORDEAUX: Doctor, I'm told that the real problem, fly in the ointment, is the medical bureaucracy.

PHELPS: Well, certainly, the information that I have from my colleagues here in South Australia is that the medical bureaucracy in South Australia is difficult. And they have had a great deal of trouble getting the message across to the bureaucracy in the Department of Health about the concerns and having those concerns addressed in a real way.

CORDEAUX: So maybe we take some of those people away. Remove them from that area between the Minister and the portfolio that he's administering.

PHELPS: Well, I think one of the best things a new… whoever is going to be Health Minister after this weekend, I think that one of the best things that they can do is to sit down with the doctors and say, "What problems are you having?", and hear it directly from the horse's mouth.

CORDEAUX: Yes. Yeah. So, if we waved a magic wand and put you in charge of the whole thing, do you think you can be like Bob the Builder, you can fix it?

PHELPS: I think that within the medical profession we have the expertise and the goodwill to be able to advise the Government, the Minister and the Department of where the problems are and how they might best be fixed. I don't think it's up to just the… I mean, it's not just up to the medical profession to solve the problem.

But one of the issues that has arisen time and again is the demedicalisation of administration in hospitals and in community health areas. Because as more and more administrators who are not doctors have moved into those positions of influence we've seen perhaps less relevance in some of the decisions that have been made, and we would actually like to see more involvement of doctors in those decision-making processes.

CORDEAUX: Doctor, I know you're busy, but let me ask you a question about these rumoured rises in private health insurance. I was amazed when Medibank Private said that they were going for a 13 percent increase in premiums because, in the last twelve months, they had been successful in attracting another one million people to the fund. I thought the more you attracted to the fund the greater the critical mass and the less, in fact, you needed to charge for the premiums in the first place.

PHELPS: Yeah, that actually makes sense. But there's also the other side of the equation, and that is that the more people that you attract to your fund, as soon as their pre-existing ailment waiting time expires then they're you've got more people who are going and having the procedures that they perhaps had been waiting to have done, and the reason that they took out private health insurance initially. So we might see a bit of a hump there, a bit of a rise in the numbers of people seeking treatment as well as the people taking out private health insurance.

It's a complex equation the issue of private health insurance. What the AMA's been saying is that if there does need to be a premium increase, then we need to see as taxpayers and as health fund members, we need to see the reasons behind that, and that there should be more transparency in the Government's decision about whether rises have been allowed or not. We need to look at the profitability of the funds, their administration costs; we need to see what their money is being spent on and their profitability levels. And we certainly don't want to see another HIH disaster in private health insurance, but by the same token families on tight budgets don't want to have to be paying out more money, when they've been encouraged into private health insurance, unless they see evidence that that's necessary.

CORDEAUX: Health Minister, Kay Patterson, what do you think of her, quickly?

PHELPS: I had a very productive meeting with Kay Patterson late last year, I'm meeting her again next week.

CORDEAUX: You get on?

PHELPS: We have a very good level of communication and I think that we'll be able to…

CORDEAUX: You might find… you must find that a bit of a novelty?

PHELPS: It's a great relief I have to tell you.

CORDEAUX: Anyway, she says that premium rises are inevitable, but they're going to be kept as low as possible. Medibank Private wants 13 percent. I think AXA was talking about three percent or two percent. What do you think is reasonable?

PHELPS: Well, once again, we haven't seen the figures. It's really off the top of… it would be off the top of my head to say, you know, six percent's OKay, or eight percent's OKay, or two percent, or no rise is justifiable. I think that, you know, what we're wanting to see is justification for these rises. And both… with taxpayers' money to the tune of several billions of dollars in rebates now going into private health insurance funds, I think the taxpayers have a right to know more now about where their taxpayers' money is going.

CORDEAUX: And last question. Ultimately we're going to see a shakeout in the health insurance industry; we're already hearing rumours of mergers between AXA and MBF. Is bigger better? Should we support a period of mergers?

PHELPS: There might be some economies of scale with some of the mergers, but I think it's important that they're scrutinised for the level of competition that's appropriate. Certainly, we have one giant health fund in MB-- in Medibank Private. With the proposed merger that you mentioned we would have a second giant. And there might be some economies of scale with larger funds, but I think that that needs to be balanced against the benefits of competition.

CORDEAUX: Good to talk to you, Doctor. Enjoy your stay in Adelaide.


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