HEALTH SERVICES AMENDMENT BILL 2014

Written on the 2 April 2014

Mr JENNINGS (South Eastern Metropolitan) -- I am pleased to have the opportunity to speak in the debate on the Health Services Amendment Bill 2014. The Acting President would be aware, as he was in the Chair at the time, that for 51/2 hours on Tuesday evening I actively participated in a debate which commenced at about 9.00 p.m. In the light of day this morning, as the government struggles to fill its legislative program for the week, I will be making a 51/2-minute contribution to the debate on this bill.

This is partly because of the range of matters I want to discuss in relation to the Health Services Amendment Bill, but it is also a direct response to the fact that I have listened for about the last hour to second-reading speeches being slavishly read by ministers in this chamber, despite their having had the opportunity since 2003 to incorporate second-reading speeches into Hansard. It is further evidence that the government's ability to manage its legislative program has been sorely lacking during the course of this week.

The Leader of the Government is responsible for that and is also the minister responsible for this piece of legislation.

The bill does important work in terms of tidying up some provisions of the Health Services Act 1988 in Victoria, and the opposition is happy to allow this bill to pass and to implement the modest reforms contained in it, but it is a hallmark of the legislative reform brought about by this minister in this term. We are now three and a half years through this term of government, and given the order of magnitude and importance of the health sector in Victoria, this bill is a demonstration of the priorities of the Minister for Health. He has brought two pieces of reforming legislation to this endeavour in the course of this term.

When the first piece of legislation, which contained some modest reforms, was introduced, the Minister for Health and the minister representing him in the other chamber had sufficient hubris to suggest that they were tidying up and resolving matters left outstanding by the outgoing Minister for Health, Daniel Andrews, the member for Mulgrave in the Assembly.

That hubris has come back to bite them because within a couple of years they have had to come back and make further amendments to the legislation to incorporate the scope of operations of Health Purchasing Victoria (HPV). That is something we support. We understand that sometimes the scope of practice needs to be amended to align with other responsibilities under the Financial Management Act 1994 or other relevant legislation in Victoria. There sometimes needs to be a tidying-up process, and we understand that. I am not necessarily making a gratuitous point about it except to note that the hubris and conceit that was shown during the initial presentation of the legislation two years ago has now come back to bite the government. I simply make that point.

Beyond that we are happy that the scope of Health Purchasing Victoria is being clarified and that additional organisations will be able to use the value of the combined purchasing arrangement with HPV to lower costs within the health sector.

I have read in Health Purchasing Victoria's most recent annual report that it believes it is making a significant contribution to reducing costs within the health portfolio. It has identified savings in the order of $55 million worth of cost benefit to the health sector in Victoria. Specifically, HPV's annual report states that $17 million, about one-third of that saving, is due to reforms that have been introduced during the life of this government. Although that may be true, concerns have been expressed to me by various bodies and entities within the health sector that the probity and transparency arrangements of Health Purchasing Victoria may leave something to be desired. That is a matter that I will detail to the Parliament at a later point in time.

I am not going to talk about those matters at length today except to place the minister on notice that he should watch those practices very carefully to make sure that the organisation is functioning with the transparency and reliability we would expect of what he established under the Victorian act.

I note the changes made through this amending bill also allow the minister to take a more direct role for leasing arrangements in hospital facilities or other facilities under the minister's responsibility previously handled by the Minister for Environment and Climate Change or the minister responsible for land. It may be a good thing to streamline the length of leasing arrangements available in the health portfolio to assist it in managing an appropriate balanced outcome in terms of the development profile of health projects in the state managed through public-private partnerships. If that can be demonstrated, we would potentially benefit from it, although we need to keep a close eye on the effect of these leasing arrangements and on the degree of confidence we have in the current government, which privatises many elements of our health system, including aged care and the community services sector, by stealth.

These provisions may facilitate further intrigue in relation to the government's agenda of privatising elements of the health services sector in Victoria, and that is something the opposition and the community is watching. We believe that would ultimately be rejected by the community as an abrogation of public responsibility. If the provisions are used for that purpose, then I will subsequently rail against it, and I am confident others in the community would join with me in opposing those provisions. The opposition is happy that this bill is compliant and dovetails with appropriate financial duty reporting guidelines under the Financial Management Act 1994 and the Health Services Act 1988, and on that basis we will support the legislation.

I take this opportunity to remind the Victorian community that this very modest but appropriate piece of legislation is a hallmark of the lack of reform and engagement being brought to the Parliament by the Minister for Health, who is also the Leader of the Government. He has spectacularly failed to manage the government business program throughout the term of this Parliament, and this week in particular is a shining example of his failure to do this. We sat in the Parliament until 2.30 a.m. debating the Mental Health Bill 2014, a debate which only commenced at 9.00 p.m. From the very beginning of the government business program today the government started padding out the process, filibustering by slavishly using second-reading speeches as a device to try to fill up the day.

The Minister for Health has a ridiculous, tawdry motion on the notice paper to potentially discuss the impact of the carbon tax on the hospital system. Yet again he is wasting the time of the Parliament. Everybody who cares about this issue in Victoria knows that somewhere in the order of $30 million has been apportioned to hospital costs on the basis of the imposition of the carbon tax. However, virtually nobody in Victoria knows that because strictly speaking nobody cares about it, apart from the Minister for Health who introduced $825 million worth of savings in the three first budgets of this government. That is where the pressure points are in the health system in Victoria, because this government has not invested significantly in the health portfolio. That is the reason why emergency departments are floundering, why the elective surgery waiting lists have increased by 10 000 or more during the life of this government, why ambulances are ramping and why emergency response times for ambulances are falling further and further behind.

At the first Public Accounts and Estimates Committee (PAEC) hearing the minister appeared at in 2011 he indicated that Health Purchasing Victoria was going to be his great salvation to demonstrate that the $616 million taken out of health in the first budget of the then Baillieu government was going to be accounted -- --

Ms Crozier -- On a point of order, Acting President, I seek your guidance on Mr Jennings's contribution in relation to the bill we are discussing? He seems to have concluded -- --

Mr JENNINGS -- You're not listening.

Ms Crozier -- I have been listening, Mr Jennings. I seek your guidance, Acting President, on his contribution.

The ACTING PRESIDENT (Mr Ondarchie) -- Order!

I do not uphold the point of order, but I ask Mr Jennings to come back to the bill.

Mr JENNINGS -- I am on the bill. If anybody was listening to my contribution they would know that the point I am making is that when asked a question at the PAEC hearings about how he was going to account for the $616 million, the minister said, 'Health Purchasing Victoria'. That is what he said; that is exactly what I was saying in my contribution when Ms Crozier interrupted. The minister tried to pretend at the Public Accounts and Estimates Committee hearing that every single dollar ripped out of the first budget by the current government was going to be made up by the reforms and initiatives of Health Purchasing Victoria.

In its own annual report, Health Purchasing Victoria demonstrated that with its best endeavours it had $55 million in savings, which means the $825 million taken out of health by this government in three successive budgets will never in our lifetime, or the 10 000 lifetimes of Victorian citizens, be made up by Health Purchasing Victoria savings. That is my point; it is on the bill. That is the pretence the Minister for Health tries to peddle in Victoria every day to cover up the monumental failings in the health system.

I will conclude my contribution on the bill because I made a commitment today that I was going to speak briefly and not assist the government's legislative agenda by speaking longer than I needed to. The facts are clear in Victoria. The health-care sector is failing. This bill will do a modest amount to assist it, but it will not turn around the fortunes of the health-care sector in Victoria.

 


Ms HARTLAND (Western Metropolitan) -- As Mr Jennings has addressed many of the technical aspects of the bill, I just say that it is a very straightforward bill that will assist certain sections of the health community. It will mean that people will be able to purchase goods and services in a different way. It is a logical and sensible bill.

While the Greens will be supporting this bill, I take up some of the comments made by Mr Jennings. I too have grave concerns about what happened on Tuesday night and Wednesday morning in that we were here until 2.30 in the morning debating a bill that was incredibly important and should have been debated in the light of day rather than in the middle of the night, and today we will have difficulty filling the day rather than using the time sensibly.

I do not understand why the government considers that it must have not only MPs but all the staff here until 2.30 in the morning. It does not seem a very sensible way to run a Parliament. It also has very negative health effects on people who work in this building. The Minister for Health should be considering the health of people who work here as well.

 

 

Ms CROZIER (Southern Metropolitan) -- I am pleased to rise to speak this morning in the debate on the Health Services Amendment Bill 2014 -- and actually speak about the bill. Before I do so, I will make a couple of comments. Mr Jennings referred to the carbon tax. I know it is the subject of a notice of motion on the notice paper, but I note that it has had a significant impact on health services across Victoria.

The enormous amounts of money that hospitals and health services have had to find to pay for a carbon tax has led to a decrease in services and other areas of health services that operate throughout the state. It is fair to say that it is important to understand the impact of that on the health services and what the management of those health services have had to undertake in considering that particular tax.

Getting back to what the bill is about, there are three parts to the bill. As Mr Jennings and Ms Hartland have said, it is very straightforward in streamlining various elements in relation to Health Purchasing Victoria, which has been around for some time. It was established in 2001 and is responsible to the minister. Its function is to improve the collective purchasing power of Victorian public health services and hospitals. It has a very relevant role to play in enabling proper purchasing power.

The bill is a sensible measure introduced to ensure that health services consumables that are used in bulk -- things like gloves, alcohol swabs and, importantly, hand disinfectant -- are purchased under a sensible cost regime.

Health Purchasing Victoria's major function is to work in partnership with public hospitals and health services to enable access to the supply of goods at the best possible value, as I have said. That obviously goes to further savings for the Victorian taxpayer. Currently Health Purchasing Victoria tenders across about 30 contract categories with more than 366 individual contracts with a current total value of approximately $507 million. Each year Victoria's public hospitals spend approximately $1.6 billion to procure supplies and consumables, so we are talking about significant taxpayer money. A bill that further streamlines the purchasing of consumables is a good measure.

The bill also expands the definition of 'health or related service' to include other health-related entities that use the supply of goods system on a regular basis and make large purchases. Health or related service will include such entities as those providing ambulance services and health services in prisons, both of which obviously use large amounts of consumables as well. The definition is amended to include disability services, residential care services and the Victorian Institute of Forensic Mental Health. These sensible inclusions in the definition will save Victorians tens of thousands of dollars which can be better utilised elsewhere.

The second part of the bill relates to Crown land leasing and licensing. The majority of the public health services are located on Crown land. The Crown Land (Reserves) Act 1978 governs all leasing and licensing of Crown land, in particular imposing limitations on the period of time for which a lease or licence can be granted.

Currently licences granted under the Crown Land (Reserves) Act are limited to 10 years, with a 21-year licence being able to be granted in only certain circumstances.

These limitations are having a particular impact. I refer to the Bendigo Hospital redevelopment. As members know, it is the largest hospital redevelopment in regional Australia and that huge redevelopment will service the community in northern parts of Victoria. The coalition government is very proud of delivering it, and it is doing so in a timely fashion. Unlike the former government, which was unable to manage projects or Victorian taxpayers money in a responsible manner, this government is delivering this project, and the community of Bendigo and of Victoria more generally will benefit enormously from the project.

The bill provides trustees and committees of management with the power to grant long-term leases and licences for projects on Crown land, subject to approval by the Minister for Health. Those long-term leases and licences will be able to be granted for a period of up to 35 years.

Finally, the third part of the bill relates to the restriction of the investment powers of certain registered funded agencies. It ensures that the standing directions issued by the Minister for Finance under the Financial Management Act 1994 will apply to those agencies. The requirement for this measure has been highlighted in recent times due to the collapse of a number of financial groups or non-bank lenders, where millions of dollars of investors money has been lost.

Currently the act does not restrict how health services can make various investments; therefore this amendment will further protect health services by enabling better investment decision making.

In regard to what the bill does, it streamlines those processes. As I said, it is a straightforward bill that provides sensible measures to further improve health purchasing for our hospitals and health services. It improves the Crown land leasing and licensing provision for hospitals, which is particularly relevant with the various projects that are being undertaken throughout the state. It also protects health services with those investments and provides some regulation and clarity around that.

With that contribution, I would like to commend the bill to the house. I thank those opposite for their support also in relation to this important bill.

 


Mrs COOTE (Southern Metropolitan) -- I have a great deal of pleasure in speaking on the Health Services Amendment Bill 2014. I am pleased that both the Greens and the Labor Party are supporting the bill as well.

Ms Crozier gave quite a lot of detail about the bill, but I would like to reiterate some of those comments. It is a relatively straightforward bill which will help improve the efficiency of our public health network. I think it is agreed by everyone that an increase in efficiency is something we would welcome across all departments, but it is particularly pleasing to see that this bill is talking about efficiency in our health network.

According to the explanatory memorandum, there are three main objectives of the bill. The first is:

- to expand the range of health or related services in relation to which Health Purchasing Victoria (HPV) performs functions and exercises powers to include entities that deliver ambulance services, health services in association with correctional services, services provided by the Victorian Institute of Forensic Mental Health and residential care services. This amendment will allow those entities to procure from HPV on an opt-in basis.

- The second objective of the bill is to give the Minister for Health the power to approve leases and licences of Crown land in the health portfolio, granted by trustees or committees of management, for longer periods than currently permitted ...

- The third objective of the bill is to limit the investment powers of certain registered funded agencies by allowing the standing directions issued by the Minister for Finance ... to apply.

Members will recall that earlier this year we debated a health services amendment bill that related to Health Purchasing Victoria. That bill was to expand the organisations that are able to utilise Health Purchasing Victoria in their procurements. This allows community health centres to access the lower rates that HPV can obtain through economies of scale, to 'ensure that their resources stretch further and will enable them to operate more effectively', as I said during that debate.

This bill continues on that successful policy initiative by allowing other health organisations to also access HPV. These agencies include Ambulance Victoria, the Department of Human Services residential care services and the Victorian Institute of Forensic Mental Health. This, as I said earlier, will be on an opt-in basis. The bill is about expanding opportunities and allowing these agencies to make the decision to use HPV rather than forcing them to do so.

It will, however, allow them to take advantage of HPV's bulk purchasing, and therefore it will lower prices. All round, it will ensure greater efficiencies among our public health institutions, which is a very welcome thing.

In relation to leases and licences, the bill also makes changes to the maximum length of time that a lease can be granted on Crown land managed through the health portfolio. The Crown Land (Reserves) Act 1978 sets out the maximum length of time a lease can operate. What this bill changes is how many years that maximum length of time can be. In the minister's second-reading speech it was explained that, with the Minister of Health's approval, the trustees and committees of management of hospital sites will be able to sign leases and licence agreements for up to 35 years. There is a very simple reason for this, and that is that many public-private partnerships (PPPs) require this sort of length of time to be viable and to attract private sector finance.

In the past it used to be 21-year leases, and I think that time frame is not long enough to give certainty to the private sector. Extending these lease and licence periods will allow our public hospitals to attract investment through public-private partnerships. There are also safeguards to ensure that these leases and licences are consistent with Crown land reservation.

The third area which is addressed in the bill is the limitation of investment powers. It amends a restriction on boards of management to limit investment in high-risk securities. It is a fairly minor aspect of the bill, but it is very important. Currently there is no restriction on the manner in which public hospital funds can be invested, and it is at the discretion of the board of management. The Minister for Finance and the Department of Health have no authority over the investment decisions made.

We are probably all familiar with the relationship between risk and reward in investments, with riskier investments generally yielding higher returns than less risky investments. In fact I will use the old adage, 'If it looks too good to be true, it probably is too good to be true'. Some investments are too risky for public sector entities, and restrictions currently apply for other entities but not for public hospital boards. This bill will result in public hospital boards operating under the same restrictions as other public sector entities when it comes to investment decisions.

These restrictions will allow the boards of management to invest through the Treasury Corporation of Victoria and the Victorian Funds Management Corporation (VFMC). These two corporations have far more expertise than exists on public hospital boards and are able to generate reliable returns on investment. This is a very welcome addition. Members of hospital boards are great representatives across a broad range of areas, and they do a very good job. This gives them certainty too.

It gives certainty so that they will not be investing in risky investments which might have looked good at the time. It provides certainty knowing that the VFMC and the Treasury Corporation of Victoria, which have the expertise, can be relied on. I think this will give boards a great deal of comfort.

In conclusion, this bill makes small but important changes to the way in which our public health system operates. It will improve the financial efficiency of the health sector. I commend the bill to the house.

 

 

Mr ONDARCHIE (Northern Metropolitan) -- I rise to contribute to debate on the Health Services Amendment Bill 2014. This bill demonstrates the commitment of the Victorian Napthine coalition government to common-sense reforms that help the state's health-care system. I am going to do something really unusual here; I am going to actually speak to the bill before us.

In her contribution this morning Ms Hartland did not speak to the bill, so the next time Ms Hartland stands up to raise a point on relevance, I am going to remind her about her speech on 27 March 2014 when she stood up and made a contribution that had nothing to do with the bill before us.

In her contribution Ms Hartland did manage to complain that we had to stay late on Tuesday night for a very important bill. That is exactly why we stayed late on Tuesday night, because it was a very important bill. It was not one that should have been addressed flippantly throughout the course of the day; it needed to be dealt with with appropriate consideration and analysis. That is why we stayed late. It is unfortunate the Victorian Greens did not understand the importance of that bill and instead wanted to go home early. We are about serving the people of Victoria well, and that is what we did on that day.

I wish to acknowledge the contributions on this side of the house from both the Parliamentary Secretary for Health, Ms Crozier, and my good friend and colleague Mrs Coote. They addressed the bill in great detail. I choose for the efficiency of the house not to go through it again other than to say that this bill is going to broaden the functions of Health Purchasing Victoria for a whole lot of efficiency and economic reasons and to give taxpayers good value for money.

The bill will allow Victoria's health dollar to go further by providing Ambulance Victoria, Justice Health and the Department of Human Services the opportunity to access the benefits of collective and volume purchasing through Health Purchasing Victoria. It is going to reduce the cost pressures on the health system and enable the expansion of good practice and transparent procurement services provided by Health Purchasing Victoria to other parts of the health sector.

The bill seeks to broaden the functions of Health Purchasing Victoria and provide the Minister for Health with the power to approve long-term leases and licences with respect to hospital sites. That will then allow the trustees and the committee of management of hospital sites, subject to the approval of the Minister for Health, of course, to grant leases and licences for a period of up to 35 years. These extended powers will be limited to Crown land, which is managed in the health portfolio, and will only allow the opportunity to grant leases or licences for the purposes which are consistent with Crown land reservations.

When I think of hospitals, I think of the Northern Hospital, Epping, in my electorate of Northern Metropolitan Region. When we came to government that hospital needed significant support, because it had not been provided for a long period of time -- --

Mrs Coote -- Shame.

Mr ONDARCHIE -- Mrs Coote's interjection of 'Shame' is absolutely accurate. How could Labor ignore that rapidly growing area of Melbourne's north, the city of Whittlesea -- which grows by 173 residents every week -- for such a long time? The government has an opportunity to do something about that. I was honoured and privileged in my very first few months in this job to assist for an entire shift in the emergency department at Northern Hospital. I was in scrubs and I helped out. I got to see firsthand what happens there. The staff do a wonderful job, but they are under pressure because of the growing demands of the local area -- --
Mrs Coote -- What did you have to do?

Mr ONDARCHIE -- I did a range of things to help out. I did not do any brain surgery. I did not help anybody in particular, but I did help out and get a chance to observe, assist and understand the pressures staff are facing at Northern Hospital. It is my great fortune that the Minister for Health and the government understood my position.

I was pleased to join the Minister for Health, the Minister for Community Services and the Premier at Northern Hospital recently to open the new coalition-funded expansion of the emergency department, which means more beds and more opportunities to assist people in the northern suburbs.

This comes in addition to our commitment to the Northern Hospital to increase its facility by adding more beds to service that fast-growing need in that fast-growing region of Melbourne. This government is all about supporting Victorians in our health system.

In addition, the Austin Hospital, which is also in my electorate, has a brand-new short-stay unit, for which it has been crying out for a long time. I know Mrs Coote has been a strong advocate of short-stay units, in particular for women's mental health issues. I am pleased that through her stewardship as well as that of the Minister for Mental Health we are increasing the capacity for mental health support for women at the Austin Hospital. This will be a new area just for women, one which will provide them with security, safety and most importantly maintain their dignity as they go through the trials and tribulations of their illnesses. Let us not forget that mental health is an illness.


If you break your arm or your leg, it is obvious to people, but mental health is also an illness. We need to protect and support those Victorians as we do Victorians across the board. I commend this very important bill to the house.

Motion agreed to.

Read second time, by leave, proceeded to third reading.


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