Introduction

A Royal Commission was initially reportedly to be established to conduct a broad ranging inquiry into problems associated with Queensland's public health system [1].

This was triggered by problems at Bundaberg Base Hospital where a doctor (nicknamed 'Dr Death') who had been de-registered in the US for negligence was employed, and allegedly injured various patients [1]. He was also reportedly employed by the University of Queensland in training medical students [1, 2]. However, as there are numerous other problems in Queensland's health system which have caused public concern, the Royal Commission was reportedly to be given broad terms of reference to examine the system as a whole.

It was then reportedly decided [1] that:

• a ($3.75m) Commission of Inquiry would be established with narrow terms of reference (limited to recruitment of doctors overseas, the role of the Queensland Medical Board and medical practices at Bundaberg Base Hospital); and
• this would be paralleled by a ($1.25m) Review of the health bureaucracy (which would focus on staffing and resources - and 'put a shudder through sections of the bureaucracy' in the premier's opinion). 

It was subsequently indicated that the Commission of Inquiry would also consider problems in several other state hospitals [1].

Numerous other investigations into aspects of the situation are also being undertaken [1].  In particular the Crime and Misconduct Commission (CMC) is to examine Queensland Health's response to complaints about 'Dr Death' - in terms of whether there were reprisals against those who complained and the adequacy of Queensland Health's procedures for dealing with complaints [1].

An interim report was produced by the Commission of Inquiry in June 2005. Lawyers for the nick-named 'Dr Death' then contended that he was being made a scapegoat for a failed public health system [1]. The Health System Review then produced an Interim Report in July 2005.

Following a threatened walkout of Queensland hospitals by visiting doctors over a pay dispute, in August 2005 the premier proposed a summit to end public brawling over the health system and consider a 20 year strategic plan.

In early September 2005 the Bundaberg Hospital Commission of Inquiry was closed when a Supreme Court judge ruled that ostensible bias had been displayed by the lead Commissioner, and a Queensland's Public Hospitals Commission of Inquiry was established with even narrower terms of reference.

In late September 2005, the Health System Review reported with proposals that basically involve (a) some restructuring and (b) large ($1.5bn pa) increases of spending, neither of which would address the fundamental problems.

In November 2005 the Queensland Public Hospitals Inquiry reported with findings against Dr Patel, his superiors, Queensland's health system and ministers.

The basic thrust of this (intended) submission is that none of the investigations which have been established seem to have terms of reference that would allow them to get to grips with the source of problems in Queensland's health systems. 

Ultimately a similar view was publicly expressed in relation to the Queensland Public Hospitals Inquiry in parallel with widespread criticism of Queensland's Government for attempting to conceal problems for political advantage.

The present author (whose CV is available on this web-site) has no personal medical or health system expertise, and moreover has no inside knowledge of Queensland's health system.

Rather this (intended) submission is based on published reports and on prior study and experience of factors in the health system's public administration environment, which seem likely to be the primary drivers of systemic failings such has those that have been suggested to exist within the health sector.

Problems Affecting Queensland's Health System

There have been allegations of increasingly serious deficiencies afflicting the health system as a whole for several years. Some of these are outlined in Attachment A to this (intended) submission. It refers to apparent inadequacies in: governance; management; resources; and medical practices.

There are also various emerging and ongoing challenges which Queensland's health system will have to deal with (such as population aging, higher cost technologies, chronic diseases affecting younger persons and others outlined in Attachment B) at the same time as existing deficiencies are corrected.

It had been suggested at least as early as 2002 that (a) Australia's health system was likely to be in crisis by 2005 [1] and (b) Queensland's health system was fatally damaged [1]. Moreover it is alleged that unions confidentially warned Queensland's Premier in September 2000 that problems in the health system were so severe that a royal commission was likely to be required [1].

On the other hand the Premier has suggested that:

• the AMA's failure to give adequate warning about problems that it was aware of and the restrictive practices of doctors in training specialists are significant factors in the problems that have arisen [1];
• there was a need for federal and state governments to overhaul the health system to prevent a repeat of the 'Dr Death' problem [1];
• the community expected him, as Premier, to take responsibility for fixing the problem [1].

Systemic Defects in Public Administration

There is no doubt that ensuring quality in health services is a difficult task - because of the complexity of the issues to be managed. Health systems worldwide seem to struggle with, and universally fail to prevent, significant numbers of injuries to patients as a result of medical errors [1]. Sophisticated efforts to address those challenges have been under way in Australia [1]

However based on the reports cited in Attachment A, substandard medical practices (which triggered the establishment of the Bundaberg Hospital Commission of Inquiry and the Health Systems Review, and are apparently to be the only focus of the main Inquiry) seem to be only a relatively minor, and derivative, part of a bigger problem.

This is because, despite factors such as constrained funding, a lack of overall organizational effectiveness seems likely to be the main factor in the concerns about Queensland's health system because:

• a severely defective organizational culture (characterized by intimidation and secrecy) has reportedly been officially recognized to be a feature of Queensland's health system [1];
• in normal health systems the breakdown in the standards of health practices are not as severe as appears to have arisen at Bundaberg Base Hospital;
• limited resources are unlikely to be the main problem, because the state's health system operated with a relatively low level of resources by national standards for decades without any overt crisis. Moreover:
  • overall public spending has increased quite rapidly over the past decade (see Queensland's Budgets);
  • despite large additional state funding to cut surgery waiting lists, the numbers of operations performed declined and waiting lists grew [1]. Funding was not the only constraint - eg there was also a lack of trained specialists;
  • there are indications in Attachment A of unwise use of resources - such as over-investment in a major hospital building program and under-spending on staff to match that investment; and imbalances in the types of staff employed;
  • while spending on health functions has been low by Australian standards, it has not been low by comparison with many other countries where similar administrative breakdowns have not arisen.

Moreover the lack of organizational effectiveness in the health system is likely to be a reflection of general weaknesses in Queensland's system of public administration, rather than of factors that are unique to Queensland Health. Similar dysfunctions and crises have been reported to afflict many other public functions - as outlined in The Growing Case for a Professional Public Service. In particular:

• serious difficulties have emerged in the planning and development of infrastructure generally (see Defects in Infrastructure Planning and Delivery in Queensland  which refers, amongst other things, to: fragmentation of responsibility; loss of necessary technical skills; unrealistic strategic planning; and privatization of monopoly assets);
• the crisis in Queensland health was preceded by crises in electricity distribution and child protection, and 'candidates' for future crises appear to exist in: mental health [1]; guardianship [1, 2]; railways [1]; public works [1]; prisons [1, 2]; water [1, 2, 3, 4, 5]; social services [1].
• reported concerns about the health system (see Attachment A) have close parallels with problems encountered elsewhere in the state public sector such as:
  • an unbalanced focus on financial outcomes at the expense of functional effectiveness - which was also seen to be associated with failure in development of Queensland's electricity distribution system (see Failure of Queensland's Electricity Distribution Network);
  • blaming subordinates for what appeared to be systemic problems, and an overall loss of organizational effectiveness (in the Families Department) which was also associated with the breakdown of the child protection system (see Review of CMC's Child Protection Proposals);
  • a culture of containment (ensuring that bad news did not get out) which has emerged as characteristic of Queensland Health was also a feature of the crisis ridden Families Department [1], and has been alleged (but not proven) in DPI in relation to fire ant containment [1]. It has also been speculated that secrecy about the state of repair-disrepair of government schools (and the large number of schools with high priority repair status) could indicate that there are real problems [1].
  • bullying of staff - which is anything but unique to Queensland Health (see [1]  and History of the Growth of Public Service Bullying). The latter stresses the relationship between bullying and the breakdown of the Westminster tradition. Moreover:
    • it has recently been suggested to the author that in one Queensland agency, which has not yet been the focus of public attention, the level of bullying (often of subordinates with experience or a depth of knowledge) has grown to 'almost frightening' proportions;
    • claims have been made about a public service wide culture of harassment (starting at the top with Director Generals) of staff who pointed out problems, which has ruined lives and careers. [1].

The core of current health system problems is thus likely to be a long term decline in the effectiveness of the overall administrative systems through which public resources are used in Queensland perhaps for reasons outlined in Attachment C.

In this respect it is firstly worth noting that in 1990 a diagnosis of the Queensland Health Department for the Public Sector Management Commission suggested that it: lacked strategic direction; was deficient in policy formulation, planning and accountability; and needed improved management expertise and a less bureaucratic approach [1]

Unfortunately 'reforms' to Queensland's government machinery under the Goss administration to 'keep government honest' in the era following the 1980s' Fitzgerald inquiry responded to such defects by creating the most complex system of government in the Western world - in the opinion of one expert observer [1]. In 2003 this was seen to require scaling back because the resulting 'red tape' made government ineffective [1].

Moreover in the process of 'reform' a desire to make the Public Service more 'responsive' resulted in legislative elimination of any requirement to seriously consider professional competence in making 'senior' Public Service appointments (see Ombudsman's reasons for an explanation of how this follows when appeals against SES appointment are banned).

Unfortunately even with the best of intentions, in making 'senior' appointments the political system on its own must intrinsically be unable to recognize the types of abilities needed for real professional competence or credibility (see The Growing Case for a Professional Public Service for an outline explanation). And in Queensland's case the intrinsic difficulty in politically recognizing real professional merit is compounded by:

• the traditional lack of leading-edge inputs into Queensland's public policy debates by competent, independent institutions (see Queensland's Weak Parliament); and
• the below-world-standard competencies which often prevail in leading Australian organizations. For example, it has been pointed out that: (a) persons with international experience and skills are frequently unable to gain positions in Australian businesses because they are regarded as a 'threat' by existing managements [1]; and significant Australian innovations are often only able to be recognized overseas [1].

The consequences of eliminating the Westminster tradition of a politically independent and professional Public Service are likely to include many dysfunctional internal elements, eg:

• a working environment where staff are forced to pay more attention to whether policies and programs will be popular with key interest groups than to whether they will work in practice. In other words, protecting 'backsides' becomes more valued than performance;
• appointment of 'senior' officials skewed towards those who are politically compliant (cronies and 'yes men') at the expense of those who are technically skilled - as the latter are more likely to be seen as 'difficult' because they point out limitations in political assumptions from time to time, while career success for 'yes men' requires being very skilled in political gamesmanship;
• a lack of effective leadership of public agencies;
• an inability to recognize or really value professional competence in others. Staff performance is evaluated in terms of appearances (eg the ability to bluff superiors by expressing stylish policy rhetoric) rather than in terms of practical experience and capabilities. Ambitious staff learn to parrot the rhetoric that will earn them quick promotion, without necessary understanding of what it means;
• a loss of credibility of 'senior' staff with subordinates some of whom may have greater experience or technical knowledge - which leads to:
  • a loss of staff respect for management;
  • bullying as a management technique by 'seniors' who feel threatened;
  • an unwillingness to pass on information about problems which result from poor decisions by politically-favoured 'senior' staff;
  • staff unwillingness to take espoused organizational goals seriously;
  • game playing';
  • an increased risk of corruption; and
  • a loss of effective control by management and government;

• infighting and backbiting because the organization lacks real goals and advancement depends on 'who you know' rather than 'what you can do';

• inappropriate training of junior staff; and
• shocking morale and working conditions.

These internal weaknesses then translate into dysfunctional outcomes, such as:

• the strong preference that can be expected of a compliant Public Service to convey only good news to superiors;
• a parallel reduction in technical competence in advising about, or carrying out, the complex practical functions of government;
• the rapid growth of purely 'process' functions (which politically-compliant 'senior' officials are comfortable with) at the expense of the technical functions required to perform the agencies' operational roles; and
• a predisposition for agencies to fail in their intended function, and for 'senior' officials (from ministers down) to have to find someone else to blame;

Many of these symptoms are reflected in reported concerns about Queensland's health system.

A second external systemic defect that appears to affect Queensland Health may derive from budgetary and financial arrangements.

For example:

• there has been general government expectations that public agencies will operate 'commercially' and increase their 'productivity'. The problem is that political control of policy makes it impossible for such organizations to easily launch profitable new functions (which private firms can use to increase margins), so an obsession with cost cutting is the only way to achieved the 'productivity' expectations that are built into the state budget process. One observer has suggested that senior staff are given bonuses for cost savings, which can most readily be earned by eliminating spending required for long term viability of a function that  has limited short term impact [personal communication].

• Queensland Health apparently had very limited ability to influence its budget because of a budget process which centralized decision making in Treasury and the Cabinet Budget Review Committee [1]

These problems are associated with defects in the operating environment created for the Public Service to work in, and are not new. For example, various observers have suggested that:

• a former Queensland Health minister explicitly told senior officials that their primary responsibility was to ensure his re-election (personal communication to the present author in around 1997);
• systemic failure in Queensland Health started when management started calling patients 'clients'; formal reporting was used to conceal facts; a control-freak mentality emerged; and management wanted to hear only good news; and politicisation became intense [1]. These changes were made in the early 1990s;
• some blame had to go to a former Director General who was appointed by the current premier when he was health minister under the Goss Government. [1]
• clinical problems and deceptive responses to them have been caused over the past 12-15 years, and many doctors have left because Queensland Health became a dysfunctional abusive employer [1];

• Nothing is different about current situation to what existed 10 years ago [1]

Thus the resulting problems can not be resolved by 'putting a shudder through sections of the bureaucracy' (ie by a 'witch hunt') because the history of Queensland's 'reforms' in the 1990s shows that the result of a 'witch hunt' is to reinforce the position of purely compliant 'yes men' and displace those with the professional / technical skills required for organizations to be effective (see Towards Good Government in Queensland).

The 'witches' who would probably be 'hunted' out are likely to be the people whose capabilities are most desperately needed to re-build an effective organization.  Moreover the bullying management culture 'in' the bureaucracy, which has now given rise to political concern, is a direct result of bullying 'of' the bureaucracy by the political system.

The bullying of the bureaucracy by the political system is in turn largely a consequence of poorly considered theories about economic strategy and public administration which have impacted on Queensland over the past 15 years.

These even broader contextual difficulties are outlined in Attachment C - which points out that such problems have not been confined to Queensland. For example:

• a culture of intimidation and fear (like that in Queensland Health) was alleged to exist at the centre of the federal government [1]; and
• the Palmer Inquiry into problems in the Immigration Department found a self protective and defensive culture that was unwilling to challenge organizational norms [1, 2] (like that in Queensland Health).

The situation is complicated in the case of health systems by questions about the influence which qualified medical practitioners should have. Doctors (with very demanding levels of knowledge and skill related to medical procedures, but often limited competencies in other respects) are traditionally a strong lobby group. Attachment A suggests an underlying agenda affecting Queensland's health system involving the efforts of non-medical administrators to reduce that influence, and the efforts of organized-medicine to increase it.  Both those requirements probably need to be recognized - and it would be inappropriate to act on suggestions [1] that the Health system should be reformed simply to suit the requirements of doctors. In the long term, there is probably a need to develop strong generalists within the health system who have both the ability to understand the issues of concern to various specialists and the wisdom to listen to what they have to say.

Implications for Health System Inquiries

Given their terms of reference, it appears that neither the 'Overseas Recruitment / Bundaberg Practices' Inquiry nor the 'Staffing / Resources' Review nor the CMC's 'Response to Complaints' Inquiry will be positioned to propose the types of changes in the overall public sector environment that might enable Queensland's health system to become more effective.

Establishing Inquiries to find someone / something in Queensland Health to blame for problems which have their primary origin elsewhere could be construed to be an abuse of political power.  As the present author suggested in relation to the failure of Queensland's electricity distribution network it is not sufficient for the political system to merely take responsibility for fixing administrative failures after a crisis occurs (see 'Premier's men insulated from blame'). It also needs to be ensure that they do not arise in the first place.

Furthermore, if a key source of problems in Queensland Health is the inability of Queensland's political system un-aided to identify the types of abilities needed for real professional competence or credibility, it will be impossible for any of the Inquiries to prove this - because only persons with high levels of such abilities are likely to be able to tell the difference (see The Effect of Public Service Politicisation which commented in 1999 on the former Criminal Justice Commission's difficulties in doing anything about Public Service politicisation).

There seems to be a need for a truly 'royal' commission into Queensland's Health system (ie one not bound by terms of reference crafted to ensure politically favourable outcomes)

Interim Report of Bundaberg Hospital Commission of Inquiry

An interim report from the Commission of Inquiry in June 2005 reportedly was critical of Queensland Health [1, 2], though not of the minister [1], and recommended 10 steps including:

• criminal charges against 'Dr Death' [1, 2];
• legislating to impose penalties for pretending to be a doctor or using false information to gain registration [1]
• putting doctors back in charge of hospitals, and re-empowering district hospital boards [1]; and
• reform of Queensland Medical Board [1]

These interim recommendations appear to the present author to be constructive (though narrowly focused) and to allow useful early action [1], though various observers suggested that the report:

• recommended a quick fix without seriously addressing bungling in the health bureaucracy  [1];
• reflected a rushed judgment, that might prevent proper evaluation of evidence [1];
• recommended charges against individuals - which the Fitzgerald Inquiry had carefully avoided because the relevant issues could not be fully considered in a general inquiry [1];
• set a dangerous precedent in charging doctors [1];
• was not necessary, and might reflect grandstanding [1].

Moreover the whole process whereby the inquiry was being conducted has been suggested to put it at risk of being legally challenged [1].

Commission's Discussion Papers

A series of three discussion papers were released by the Bundaberg Hospital Commission of Inquiry in late June 2005 - apparently in an effort to broaden its scope [1].

They reportedly [1] diagnosed key sources of problems in Queensland Health as:

• too many bureaucrats trying to communicate with one another, so that nothing gets done. Moreover they cost money which thus can't be spent on front-line services, and work in a 'budget culture' which measures success in terms of cost cutting;
• a lack of transparency in decision making, due to the current head office structure; and
• the suppression of negative reports and the promotion of positive reports by Queensland Health's media communication unit  - which inhibits exposure of serious flaws. 

The Commission of Inquiry's proposal seems involve re-organizing the whole health system to try to solve a problem which causes current embarrassment. However quality medical services in hospitals are only one of the (say) 100 major, interlinked functions of a department such as Queensland Health. 'Reshuffling' everything to cope with one problem is likely to increase difficulties in some of its other 99 major functions, one of which will eventually trigger a new crisis and a new 're-shuffle'. 

In reforming an agency such as Queensland Health, it is vital to take account of all of its functions, and this can only be achieved by building on the accumulated knowledge and experience residing in the existing Department.

Qualification - By way of background it is noted that the present author was employed for around 25 years in central government agencies in Queensland and did considerable work on related matters and on a fairly successful process of public sector development in the 1970s. This included the production of a masters thesis at the University of Queensland on 'Coordination as an Aspect of Government Planning and Administration'.

Interim Report by Health System's Review

In July 2005 an interim report from the Health Systems Review was released.

Unfortunately this interim report merely indicated details of dysfunctions in Queensland Health and how they might be 'fixed' in a technical sense.

The interim report has not considered why serious dysfunctions have arisen (eg as a result of lack of real requirements for professional competence in making 'senior' appointments). It thus can not lead to proposals which would prevent similar problems re-emerging in future. It may be, for example, that the complaints mechanism can't be effective in acting against top level bullies because they operate under an electoral mandate.

Moreover some of its reported conclusions appear dubious. For example:

• problems were seen to have arisen because Queensland Health has been too centralized, yet increased centralization was seen as part of the solution (ie external scrutiny of Queensland health's budget; creation of a system of state-wide service planning);
• bullying of staff was widespread, as was a lack of action against staff who were not performing. Both problems could arise from a lack of certainty about what professionally appropriate performance is. 

The Review's final report will apparently simply deal with: district and corporate organization structures; layers of decision making; cost effectiveness of services compared with other states; effectiveness of performance reporting and management; and whether staff received the necessary support [1]

Summit and Strategic Plan

In August 2005 visiting medical officers threatened to resign from public hospitals over a pay dispute. This was seen as threatening to bring chaos to Queensland's hospital system [1].

In response the premier proposed that a summit be convened at which a 20 year strategic plan for the future of the health system would be considered. This reportedly included giving attention to a broad range of issues such as funding and management, population growth / aging, obesity and smoking, and options for better health through lifestyle changes rather than more medical services [1].

Unfortunately the proposed strategic plan could only be a diversion. Though it might raise many relevant issues that Queensland's health system needs to deal with, it can not be a substitute for effective operational management of the health system. If the latter existed, then there would be someone who could work out how the deal with the strategic issues.

Otherwise all that can be achieved by a summit is an 'answer' which takes account of the (say) 10 issues raised in the plan whilst not ensuring that:

• this 'answer' is properly integrated with the other (say) 90 critical issues that were not included in the plan;
• the health system has within itself the ability to deal with emerging strategic issues that are not yet widely known (eg see Attachment B).

Strategic 'planning' seemed to be a major contributor to the breakdown of effective public administration in Queensland (see Towards Good Government in Queensland) because overly-simplistic plans to address the trendy issues were enforced and the competencies required to deal with everything else were compromised.  There was a general shift away from 'strategic planning' by major organizations in the 1980s - when it was realized that strategic management should best involve posing questions for experienced practitioners to answer (see Strategy Development in Business and Government). Unfortunately the penny does not yet seem to have dropped in Queensland.

Closure of Commission and Establishment of Another

In early September 2005 the Bundaberg Hospital Commission of Inquiry was closed after a decision by a Supreme Court judge that one commissioner had showed ostensible bias  [1]. 

It was then announced that several other inquiries would address aspects of the Commission's work [1], and subsequently that a new Commission would be established (under a retired and experienced judge)  [1, 2].

However in practice the terms of reference of the new Queensland Public Hospital Commission of Inquiry were even narrower - apparently being limited to investigation of possible official misconduct surrounding Dr Patel [1, 1].

Bundaberg Hospital Commission's Unofficial Report

The head of the disbanded Bundaberg Hospital Commission of Inquiry forwarded a submission to the House of Representatives' Standing Committee on Health and Aging [1, 2, 3], a move which was criticized by some while others suggested that the person responsible should be placed in charge of reforming Queensland Health [1].

While there seems little doubt that this unofficial report correctly diagnosed the nature of problems in Queensland Health, its suggested solutions are unlikely to be viable as the most probable cause of those problems is external to Queensland Health.

Final Report by Health System's Review

In late September 2005 the Health Systems Review released its final report, which had been developed in conjunction with senior officials who were reportedly already starting on implementation [1] after it had been significantly altered by government [1].

The Health System Review Report appeared, as one observer suggested [1], to be lightweight because it did not seriously address the causes of problems in Queensland Health other than those related to funding.

Unfortunately the much greater spending proposed may simply not be achievable for reasons outlined below.

Moreover presenting problems can not be resolved primarily by increased spending because (as outlined above) constrained spending is unlikely to be the primary source of the dysfunctions in Queensland Health. Current spending of (say) 14% per capita below the Australian national average is not particularly low by world standards.  Also:

• there are probably real policy alternatives to additional public hospital spending that did not seem to have been considered by the Health System Review (see below); and
• systemic problems in Queensland Health seem most likely to be the result of defective general governance arrangements which have turned very many public agencies into politicized pseudo-businesses. As this question was excluded from the terms of reference of all inquiries into the health system (see above), nothing currently proposed seems likely to eliminate the cause of these problems, or to ensure significantly improved outcomes in future no matter how much is spent.

The real challenge is to correct the latter deficiency so as to:

• provide government with competent advice about the complex public health issues and options that are available;
• spend money effectively; and
• deal with future challenges capably.

It is not reasonable to have to rely on external inquiries to try to find a 'solution' every time complex problems arise.

A similar approach to that which has been proposed in relation to Queensland Health (ie more spending to provide increased services without seriously considering policy alternatives) appeared to characterize an earlier report the state government accepted in relation to dysfunctions that had incapacitated the Families Department (see Review of CMC's Child Protection Proposals).

Political Proposals - Government [Preliminary]

The state government responded to the Health System Review by:

• suggesting [1] that:
  • reforms required finding new funding sources;
  • the essence of free hospital system would be maintained, while considering proposals for co-payments and means testing;
  • poor hospital funding was a result of low taxes and high population growth
• presenting legislation to parliament to start the recommended decentralization of Queensland Health [1];
• proposing a mini-budget to fund required reforms (see below);
• speculating that increased mining and other revenue can pay for spending increases without the need to increase taxes [1];
• suggesting a tax on interstate relocations [1, 2] - a proposal that was dropped in the face of widespread criticism [1];
• announcing specific measures to provide part of the envisaged increased funding. These involved higher stamp duties on expensive properties and increased gambling taxes to raise $400m pa [1], in addition to means testing hospital treatments, and billing private patients to yield (say) $115m pa [1]. However the bulk of the required funding was assumed to come from economic growth (mainly from the continuation of property and mining booms) [1, 2].

Public responses to these proposals focused mainly on whether this meant the end of free public hospitals.

 In particular:

• it was recorded that in 1995 Queensland's then new health minister (the current premier) had warned that population growth would challenge the state's hospital system, and that free hospitals would become a greater financial cost [1];
• some doctors supported ending of the free hospital system, but the architect of Medicare argued against undermining universal health care principles. The Doctor's Reform Society argued that 100,000 people would not wait for long periods for medical appointments if they had any choice. Some see premier as blaming private patients in public hospital for problems [1]. Proposals to introduce means testing for hospital treatment were softened in the face of opposition [1];
• it was noted that managing the escalating demand for health services is hard. UK has a publicly funded system which costs far less that Australia's split public / private system - but there are longer waiting lists and no choice of doctor [1];
• opposition to premier's suggestion (ie for reducing the numbers with private health care in public hospitals at public cost and means testing) bodes ill for broader reforms [1]

A mini-budget to respond to the perceived need for increased health spending was brought down. In brief it provided for:

• early benefits in terms of increased services, and slower efforts to reform the health public service;
• an extra $6.4bn spending over 5 years - not all of which would be new money as this includes earlier provisions for pay rises;
• increased property and gambling taxes, reduced surpluses;
• ending of free universal hospital care - as patients would be means tested, and those with private health insurance encouraged to use public hospitals;
• substantial reliance in generating revenue on continued property and mining booms (especially on strong coal sales to China) and continued strong overall economic growth;
• increasing state infrastructure spending $2bn in the current year, with a $1bn increase in borrowings as part of $55bn infrastructure program;
• full retail contestability for electricity and possible future sale of electricity companies;
• a razor gang (Service Delivery and Performance Commission) to seek savings in the public service, in parallel with requirements for a 1% annual efficiency dividend.

 Observers saw the mini-budget as follows:

• Mini-budget proposed $6.4bn extra spending over 5 years ($4bn new money) about half of which would be for wage rises - with the rest for new staffing and services. Queensland's Health spending has been 14% below national average - and it has been assumed this gap should close. However part of this reflects greater efficiency - and low pay rates which have reduced staff quality [1];
• Raids on future surpluses and public service pay rises will fund $6.36bn proposes spending on health system. Taxes will be higher and budget surpluses lower. $1bn will come from projected future surpluses. $2bn from reserves to give pay rises to doctors, nurses and public servants. Funding also depends on continuing 4.25% pa growth for next 3 years. State infrastructure spending increased by $2bn this financial year and the possibility was raised selling electricity assets. Hospitals would get large funding injections. $74m could be spent restructuring Queensland Health for greater openness and efficiency. Premier predicted the reforms would have flow-on effects across Australia, while Opposition noted that taxes were $3bn greater now than in 1998.  [1]
• Mini-budget provided for long overdue reforms including full retail contestability in electricity and gas [1];
• Budget outcome has shifted from $2.5bn surplus in general government sector to $200m in 2008-09 on accrual basis (and much less on cash basis). This requires continued strong economic performance [1]
• Mini-budget raided future budget surpluses to escape Dr Death scandal.  It proposed $6.4bn spending increase over 5 years - including 17% increase this financial year. Property and gambling taxes will increase. Future budget surpluses will be much lower. 300 extra doctors would be recruited over 18 months [1];
• Proposed mini-budget provided for additional funding, many new nursing positions, regaining control of the department from the bureaucracy, and a general pledge to do better [1].
• Government is confident that growth (due to population boom and coal exports) will fund health reforms. Surpluses will fall from $3.9bn last year to $175m in 2006-07. Budget bottom line has been inflated by QIC returns which will be excluded in future. PPP rules will be streamlined - and public sector comparator will be released [1]
• Funding is a gamble reliant on coal boom. Funds will come from existing cash, some redirection of existing taxes and higher gambling / property taxes. But most is expected from a stronger economy. $6.4bn would be spent over 5 years ($4.4bn in new money). $1bn will come from budget surplus and $800m from revenue increases from economic boom. Coal royalties might be increased next year. A razor gang will seek savings. Risks (though slight) include: higher oil prices / interest rates; housing downturn; and slower population growth.[1]
• premier suggested that public would soon see benefits of additional spending (eg reduced waiting times) - but reforms within health public service would take longer [1]
• a Service Delivery and Performance Commission would be created to hunt for waste in departments and commercial units - which might result in job losses [1]. Premier suggested that public servants would bear most of cost cutting for health funding. Service Delivery and Performance Commission will seek $100m pa after 5 years, while $50m will be clawed back by 1% efficiency dividend. Premier had earlier promised to force public servants to lift their game - and said that SD&PC would be different to PSMC [1]
• Free universal hospital care will end next year - as patients would be means tested, and those with private health insurance were encouraged to use public hospitals. [1]
• premier has committed surpluses and more borrowing to pay for health reforms. Mini budget proposed $6.4bn more spending over 5 years. Surpluses will be reduced in future (eg to $220m in 2008-09), and borrowings of extra $1bn over the next 4 years as part of $55bn infrastructure program is diverted to health. Borrowing had been unnecessary before due to strong growth - and this will be relied upon to continue. An extra $2bn in new infrastructure programs was also announced in mini-budget. [1]
• Strong economic / population growth (plus coal royalties) are relied on to fund health reforms. Modest measures would raise $380m, well short of needed $1.5bn pa. Funding would be achieved without raising taxes. If there are no good surprises, tough medicine will be required in state budget. Coal royalties are seen to provide a big future certainty.[1]
• A razor gang and new savings targets have been created to save $150m in wasted public service spending to help fund health system. [1]
• the $6.5bn program to address problems in the health system has not proven effective - and a shortage of doctors prevents the system being effective [1]
• Public hospital waiting lists continue to grow despite the state governments $6.4bn commitment to health funding .[1]

Public reactions to the mini-budget suggested that:

• good had come out of the Dr Death affair by increasing health funding, reforming the bureaucracy and forcing other governments to reform;
• the projected revenue growth was uncertain;
• proposed additional funding might not be sufficient;
• projected overall increases in health funding remained below state economic growth forecasts;
• the political benefits would come now, while others paid the cost later;
• business favours increased health and infrastructure spending - providing this is funded by growth;
• proposed tax increases, and the ending of free universal health cover, would have adverse consequences;
• means testing could be illegal under national agreements;
• under Medicare all taxpayers have already paid for basic public hospital services, so it would be unfair to charge some people again;
• it was merely tinkering at the edges as many even more complex issues related to health funding remained;
• the proposal will not deal with the source of the problem as Treasury and Cabinet Budget Committee had previously had control of health funding;
• many proposals required the cooperation of other governments;
• there was no solid basis for arguing for an extra $1.5bn pa, and in fact the additional amount actually provided seemed much less than was being claimed;
• the proposal said nothing about vital basic reforms of health systems.

Observers' reactions to the mini-budget were:

• the proposal was not very severe, but perhaps only a band-aid [1]. Funding measure depends on maintaining conditions that allowed a $3.12bn surplus in the 2004-05 budget. While this was possible:
  • growth would need to be well above the national average to lift the state's tax take;
  • the economic boom is slackening, and growth may be at a peak. Reliance is being placed mainly on coal exports to China;
  • real 2004-05 surplus was only $2bn when superannuation obligations are factored in.
• the mini-budget involved buy-now pay-later. The political benefits are gained now, but future premiers will have to pay for it. Treasury confirmed reliance on 4.5% growth and stripping of future surpluses. [1]
• despite reduced surpluses, business favours extra health spending and accelerated infrastructure development - because economic growth will support it. Property Council sees the need to catch up due to past under-spending. Tax increases could see further decline in population growth. Institute of Chartered Accountants advocates further tax reform, and praised promises to reduce red tape and expedite business [1]
• proposed tax changes would particularly hurt the property industry - and perhaps result in reduced government stamp duty revenue [1, 2];
• welfare groups were concerned that gambling taxes would adversely affect low income earners [1, 2];
• Opposition criticized mini-budget for increasing taxes, and Government's preference for increasing taxes to genuine reform [1], and argued that government had broken election promises (eg not to sell electricity assets or charge for hospital treatment) [1];
• AMA said that proposed extra spending would still not put Queensland on a par with other states. Nurses Union welcomed increase in nurse numbers but argued that better pay would be needed to recruit them [1];
• Dr Death has catalyzed a shake-up of Queensland's Health system - with an extra $6.4bn available, and the health bureaucracy overhauled. Premier must have been aware of how chronically under-funded and understaffed Queensland health had been - but has now boosted spending  to cope with rapid population growth. This removed political threat, and shames other governments into health reforms [1]
• the mini-budget was tinkering at the edges. Health spending had increased 100% over 10 years (75% in real terms). Demand is driven by advances in medical technology, rising expectations and population aging. Australia has a high hospitalization rate - and needs alternatives. Medical technologies are introduced without proving better outcomes. Funding / administration between federal and state governments need rationalizing (which Forster raised by PM won't consider). Fee-for-service medicine encourages over-servicing. Forster report suggested means testing / patient charges - and showed the limitations of those options. 40% (75% in 20 years) of hospital beds are occupied by people over 65. Public hospital patients have lower incomes - so can't pay much. Proposals could breach healthcare agreement. [1]
• proposals for means testing and charging those with private insurance encountered ALP opposition.[1]
• plan to prioritize public hospital patients by their income and insurance cover was criticized by one of architects of Medicare who saw it as attack on the universal health care system [1];

• Means testing for public hospital services is inappropriate. Under Medicare all workers pay 1.5% of income as levy to allow community to provide basic service to everyone. The system allows those who want higher coverage to buy private insurance. It is wrong to claim that high income earners are taking a free ride by using public hospitals. [1]

• federal health minister said that proposal to means test public hospital patients was illegal under Health Care Agreement [1], would destroy Medicare in Queensland [1] - and that Grants Commission estimate was that Queensland under-funded public hospitals by $600m pa [1]
• Doctors Reform Society said government was seeking US style health system - with plans to means test patients. Patients will be pushed to use private health insurance in public system - which would pressure health funds and force premiums higher.  [1]
• The budget won't deal with the source of the run-down hospital system. Queensland Health was not solely to blame. Treasury culpability has been overlooked. Forster report identified many reasons that Queensland Health could not properly use increased funding - but didn't mention its inability to influence its budget. A Treasury razor gang sliced and dictated to the health bureaucracy for the sake of the state's financial reputation. The annual budget ritual gave control to Treasury and  Cabinet Budget Review Committee - with little say by Queensland Health about funds obtained or how they would be used [1]
• Premier has proposed changes to national health policies (requiring support by other governments) but said nothing about structural reforms to the health system apart from supporting Forster view of the need for change and a cash injection. The suggested $1.5bn increase in hospital spending is unsound. Forster talked of need to alleviate staffing shortages - but while Queensland as 11% fewer public hospital staff than the national average, it has 14% fewer separations (and thus no need to increase staff levels). Forster implies that problems would be solved by more funding rather than by changing structure / culture of the system. Forster suggests clinician lead decisions, but hospitals also need more autonomy. Premier's small funding increases accept falsity of the $1.5bn estimate - and could be financed without increased taxes (eg by cuts to general government spending) [1]
• Government responded to public hospital dysfunctions with mini-budget that claims performance will improve by more spending - but exaggerates this increase. Special Fiscal and Economic Statement does not address key reforms (eg reduced role and staffing of centralized administration; more hospitals performance reporting; more competitive environment for hospitals; more contracting out). $6.4 bn increased spending was promised over 5 years - yet claims apply to 6 years and mini-budget only gives information for 4 (which involves $2.4bn in new health funding). Health spending will grow slower than state's economy. Mini-budget is inadequate in both basic health reform and finding solution by increased spending. Proposed $2bn increase for infrastructure is overdue, but is a 37% increase in capital spending achievable. Opportunity was missed for bigger private sector role. Mini-budget proposed increasing revenues without savings in operating expenditure. With $26bn budget, savings of say 2% ($500m) should have been possible. Combined effect of increased spending and revenue measures leaves overall 2005-06 financial position unchanged. General public service spending is about $500m above national average - so pruning would be possible. Given unchanged economic growth forecasts, revenue measures are expected to increase revenue by $1.7bn to 2008-09 to finance 70% of additional operating expenditure. Queensland will be close to  reliance on borrowings / running down assets to finance capital spending. This is OK. The main problem is failure pursue basic reforms.[1]
• government responded to the problem by throwing money at it, though this is not a viable long term option - and difficult choices have to be made. [1]

Unfortunately the suggestion by one observer that the government's proposals are merely a band-aid [1] appears quite appropriate because:

• it is a asking a lot of an unproven new CEO (whose expertise is in policy) to successfully manage the transformation of an organization with 60,000 staff [1]. When the Goss government appointed inexperienced theoreticians with good political connection to restructure government generally, the result was anything but a success (see Toward Good Government in Queensland; and Queensland's Worst Government);
• spending money through Queensland Health without first correcting the systemic deficiencies  that it (and many other areas of government in Queensland) suffer could simply be to waste it. It is noteworthy that in another area where an overt crisis arose (ie child protection) the adopted solution also involved simply spending large amounts to increase the scale of operations. But, after doing so, the system was seen in late 2005 to be again on the verge of being under-funded [1];
• there are problems that simply can not be solved by spending more money. For example:

  • the nursing system has been said to be overburdened because new graduates are not work ready and have a 40% drop out rate - because nurse education was transferred from hospitals to universities and graduates do not know what to expect. [1]

  • the proposed solution would not contribute to eliminating the probable causes of the systemic deficiencies which were suggested above. For example, the fact that funding of services is difficult did not give rise to a culture of bullying and cover-ups - and spending more will not eliminate such problems any more than spending less would do so;

  A Fable: Selling the Lemon Mark II
  
  The Lemonade Car Car Company has a problem. They produce and market the well known Lemon model, which has gained a very bad reputation with motoring writers because it is always breaking down and developing rust spots in the bodywork.
  
  The Managing Director says 'This is awful, what can we do?'. Though there is a clear need for a better motor and bodywork, Lemonade's engineers, many of whom got jobs because they are friends of the Board of Directors, don't know how to fix those problems. So the Marketing Manager suggests producing a new bigger model and adding metallic paint.
  
  The new model is released and named the Citrus, and at the marketing launch the media is told - 'The Citrus will be a much better car. See there is more room inside than in the Lemon, and it is very, very shiny. Unfortunately it will cost a lot more'.
  
  Because of adverse comments from motoring writers about the greater cost of the Citrus, the Managing Director asks one of his friends to set up a committee to find savings. So the committee, after deliberating, decides that only four bolts (not six) are needed to fix the whizmo to the whatzit - and so some savings can be announced.
  
  'That's nothing' says Cordial Consolidated Pty Ltd (a competitor that has long wanted to take over the Lemonade Car Company). 'We believe much greater savings could be made. It is wasteful to have brakes on all four wheels when really only two are needed. And it is clearly unnecessary to have two windscreen wipers'. So Cordial Consolidated promise shareholders and customers even greater savings.
  
  Consumer quiz: Should you buy a Citrus (from either the Lemonade Car Company or from Cordial Consolidated) without getting a mechanic to check for problems in the motor and bodywork? Would you have more confidence if the Citrus was competently re-engineered from the ground up, rather than just being made bigger and shinier as well as having bolts, brakes and windscreen wipers removed?
   

• it seems unrealistic to base revenue expectations on indefinite continuance of the global economic boom of the past 15 years (on which Asian demand for commodities such as Queensland coal critically depends). For example:
  • the dynamics that have driven the long boom (ie export driven strategies in Asia; demand deficits / savings surpluses; and cheap consumer credit ) must end sometime because of the resulting global fiscal imbalances - though when this will happen is uncertain (see Structural Incompatibility puts Global Growth at Risk);
  • oil prices seem likely to remain high (given escalating demand and a possible global production peak) which must eventually feed through into core inflation and trigger interest rate increases;
• improving Queensland's tax base may not actually have a lot of impact on state revenues because:
  • state taxes only account for a small share of revenues; and
  • federal funds are distributed in a way which takes account of the strength or weakness of the state's tax base. If Queensland's tax base is strengthened by faster economic growth, then all that may happen is a reduction in the subsidy which the state receives from taxpayers in other states because of the traditional weakness of the state's tax base (see Comments on Review of Grant's Commission Arrangements). For example GST revenues seem likely to be cut if coal royalties increase [1]. This reflects federal financial arrangements that have traditionally discouraged states from really taking their economic strategies seriously;
• if economic growth were to be the key to funding services, then it would be essential to implement a more sophisticated economic development strategy (see Queensland's Economic Strategy). There is (for example) little point in rapid growth if this is mainly driven by increasing population because such growth also increases demands on public spending. Queensland's absolute growth has been above national average for 10 years - but per capita growth has not been so good - as a reflection of poor strategies (eg those which attempt to force the pace and direction economic change);
• shifting Queensland from its low tax status could have consequences for the structure of the state's economy - because higher taxes might further discourage the initially-low-tax-driven migration which has now become a major factor in: (a) economic activity in SE Queensland; (b) Queensland's above average economic growth and job creation; and (c) state government revenues. Higher taxes would reinforce the potential adverse impact on migration of property prices in SE Queensland that are no longer so low by interstate standards [1] and a SE Queensland regional plan that focuses future urban development in less livable zones)
• there seem to be significant numbers of other difficulties confronting Queensland's public finances in addition to demands for increased hospital spending (see Growing Pressure for Increased State Taxation);
• the proposed Service Delivery and Performance Commission is unlikely to be effective in making savings - because waste seems mainly to be the result of defective machinery of government that generates poor programs and policies (see Improving Public Sector Performance in Queensland). The state government has had cost cutting mechanisms in place for many years to find funds for its many large new (and at times dubious) spending initiatives. Some of those cost-cutting mechanisms (and arrangements to boost centralized control) have been the source of inefficiencies. The suggested SDPC is likely to duplicate and conflict with, the state government's mainstream priority setting and management machinery - which is what really needs to be upgraded.
• the best long term solution to rising health costs may not involve spending more, but rather shifting some emphasis from treating disease to better nutrition to prevent the chronic conditions that absorb an increasing amount of clinicians' efforts. However this may require arrangements quite different to traditional medical practices as nutrition appears to be a subject that has not been part of the normal training of medical practitioners (eg see Strand D. MD, What your doctor doesn't know about nutritional medicine may be killing you). There may well be many other options that would be known to persons with health system expertise that the present author lacks.

In fact there are reasons to suspect that the whole exercise could be something of a 'smoke and mirrors' illusion because:

• tax increases may have been needed because of financing problems across the board but disguised as being due to the health crisis. It can be noted that there are:
  • many pressures for spending / revenue increases in Queensland;
  • indications of past creative accounting in presenting Queensland's budgets and
  • doubts about how much of the $1.5bn pa spending increase which was rationalized as being needed to fix the health system has actually gone into health [1]
• the proposed $2bn increase in infrastructure spending in the current year needs to be considered in the light of reported (say 30%) blowout  in construction costs associated with an irresponsible level of state capital spending at the time of a resources boom (see About the 2005-06 Budget); and
• as noted above, expressed optimism about future sustained economic growth appears unrealistic. Moreover large revenue increases probably can't come from coal exports, because the Grants Commission would adjust Queensland's share of GST revenues if the state's tax base expands significantly.

In November 2005 substantial additional federal funds ($1.6bn) were sought as a contribution to the $6.4bn 5 year budget for health [1]

Political Proposals - Opposition

The Opposition argued in October 2005 that it was essential to address systemic problems in the health system, rather than to throw money at it.

Details: Hospitals were seen to be good in 1998. Structural reforms should aim to get the focus on patients and services, rather than a ballooning bureaucracy. Decisions about patient care should be made by clinicians, not bureaucrats. Dangerously low staff morale (as well as low spending) has resulted from mismanagement.

The Opposition's proposals for reforming the public hospital system included: (a) excluding means tests or co-payment for health services (b) restructuring by eliminating Health Zones and Health Districts (c) eliminating 2000 bureaucrats over 2 years by natural attrition (d) creating local independent Hospital Boards and (e) publishing accurate surgery waiting lists.

While addressing systemic problems in the health system is clearly desirable, there seems considerable doubt that the Opposition's proposals would be adequate to achieve this.

Davis Inquiry Report

In late November 2005 the reconstituted Queensland Public Hospital Commission of Inquiry reported with findings against Dr Patel, his superiors, Queensland's health system, and ministers.

Subsequently:

• the Crime and Misconduct Commission found evidence that the Health Minister had lied to a parliamentary committee about whether he had been briefed about problems connected with role of Dr Death [1];
• Queensland's premier:
  • warned other states they could face similar problems, unless federal reforms were made [1, 2];
  • called for national health summit to protect Australia from predicted world-wide collapse of western health systems, while Opposition health spokesman suggested that he was trying to distract attention from its mismanagement of health [1]; and
  • argued that state's $6.4bn investment to fix health system would be wasted without federal reform [1]
• Federal government refused to provide additional funding - and accused Queensland of trying to destroy Medicare [1], and suggested that states have failed to operate hospitals efficiently [1].

The conclusions of the inquiry about financing of the health system (which were outside its very narrow terms of reference) were criticized on the grounds that it: inappropriately blamed 'economic rationalism' for the problem; overstated Queensland's low spending issue; overlooked high private hospital activity in Queensland; and did not adequately assess responsibilities of government and health officials for hospital budgetary and performance requirements .[1]

Many observers appeared to conclude that problems had arisen in Queensland's health system mainly as a result of the way in which government business was conducted, though funding constraints were also a factor:

Solutions

In order to rebuild an effective health system, it is the present author's suggestion that a much broader approach be taken than reflected in the above interim Commission report, discussion papers, strategic plan, unofficial report, System Review and political proposals. In particular:

• the origin of many problems should be recognized to be outside the Queensland health system (as suggested above), and to relate mainly to defects in the Public Service's operating environment, rather than originating in the failure of individuals or a lack of resources;
• renewal should not be viewed as a process which is separate from ongoing operations and ongoing responses to strategic challenges (eg those outline in Attachment B). Separation would be likely to result in a failure over several years to deal effectively with those ongoing issues (as occurred in the Public Service 'reform' process under the Goss administration). Moreover:
  • it be noted, for example, that not only has the poor relationship between private medicine and Queensland's free public hospital system been seen as one cause of problems in the health system [1] but also better development of market mechanisms has been suggested by the Productivity Commission as needed in the next phase of competition policy reforms [1]
  • no Inquiry with defined terms of reference can ever be wide enough. For example the failed initial inquiry into problems at Bundaberg Hospital was seen by one observer to have been too narrow because it failed to consider the role of the Commonwealth [1];
• high priority should be given to creating:
  • a system of civil institutions able both to take the lead in stimulating changes within health functions (affecting both the private and public sectors), and also to provide high quality inputs to public policy debate; and
  • an effective system for real professional accountability in making senior appointments, and realistic mainstream decision making and program implementation mechanisms - eg as suggested in Improving Performance in Queensland's Public Sector; and
  • a process for 'truth and reconciliation' - as otherwise past officially-sanctioned injustices are likely to indefinitely delay recovery;

• as far as Queensland Health is concerned, priority should probably be given to: (a) ensuring better management of existing operations - and on that foundation (b) devising and implementing a solution to problems in public hospitals which integrates with all its existing operations and with emerging priorities of other types (such as those identified in Attachment B); and (c) creating an institutional framework which is capable of continuing (a) and (b).  Additional funding (if required) should mainly be introduced late in stage (a) or in stage (b) to avoid further destabilizing the situation;

There have been various other suggestions about how current problems in Queensland's health system might be corrected eg

• more strategic use of resources, rather than more resources [1];
• focus by governments on meeting emerging challenges, rather than on funding arrangements [1];
• institutional changes [1];
• creating a new department to manage hospitals separate from Queensland Health, giving more responsibility to 'nurse practitioners' and various other measures [1, 2];
• better management information systems [1];
• encouraging visiting GPs back into provincial public hospitals  [1];
• continued emphasis on prevention rather than diverting resources to treatment [1].

These are paralleled by suggestions about how problems in health systems nationally should be corrected:

• consultation with community about what sort of health system it wants [1];
• restructure resources to favour a 'wellness' approach; address jurisdictional divide; train more specialists; and introduce national electronic health records system [1];

• overcoming jurisdictional inefficiencies; eliminating subsidy on private hospital insurance; more places for training nurses / doctors; more emphasis on maintaining health to reduce chronic illness; creation of integrated primary care organizations; and forming a national health reform council [1]

Such contributions may well have merit - and the present author is in no position to judge. However none is going to make any difference until the operating environment genuinely values effective performance - rather than merely pretending to do so to the extent needed to gain political applause.

The author notes others have noted that two inquiries have shown problems in Queensland Health and the Families Department (and that there are problems in other areas of the bureaucracy). They thus argued that there is a public sector wide problem and that the bureaucracy has become party-politicized and unresponsive. They also advocated a more comprehensive approach [1].

If reforms are not put in place which allow public agencies to be effective, there is a risk of a serious worsening of Queensland's system of public administration. For example, corruption, some signs of which are mentioned in The Growing Case for a Professional Public Service, could rapidly grow as various individuals conclude that no one is serious about agencies' nominal tasks so they might as well look out for themselves.

Moreover, if it proves beyond Queensland's political establishment to allow a professional system of public administration to exist, then there would seem to be no alternative to ceasing state involvement in providing hospital services while encouraging private hospitals to fill the gap.  Doing this would, of course, create another set of difficulties in achieving legitimate social policy goals (for reasons suggested in Improving Public Sector Performance in Queensland).

From April 2005

Attachment A: Public Allegations of Deficiencies

Amongst the deficiencies which have received public comment are those related to: governance; management; inadequate resources; and poor medical practices:

Governance deficiencies have been said to include

• federal system [1], and especially duplication of functions [1, 2];
• defects in Queensland's political system (eg weak opposition; government tactic of publicly identifying with the victims and dealing with problems in ways which have the effect of blaming those in the system even though the latter were not responsible for systemic weaknesses) [1]. Elected government was seen as able through this to avoid any public perception of significant responsibility for problems at Bundaberg Hospital - as these were ascribed to Queensland Health and AMA [1]
• lack of government interest in systemic reform. Commonwealth wants to adopt new funding arrangements, while states just take the money and run. No one deals with implications of population aging, expensive technology and growing service demands [1];
• misleading government information about surgical waiting times [1, 2, 3];
• unwillingness / inability of Queensland's health minister to answer hard questions in parliament [1];
• Queensland Health's refusal to notify police of sexual abuse of children which undermined attempts to reform the child protection system [1];
• need to reform Medicare [1];
• establishment of a privacy regime whose main effect was to protect Queensland Health and hospitals from litigation as a result of mistakes [1];
• medical indemnity crisis which makes it relatively hard to staff regional hospitals [1] - and failure to understand that this would force closure of private practices and throw a heavy burden onto the public system [1];
• Queensland's free public hospital policy which has: operated separately from private medicine; has had lower medical standards; sought to exclude visiting GPs who complained about the lower standards; and recruited overseas-trained doctors to fill the gap [1]
• the funding provided meet elective surgery quotas encouraged hospital administrators to allow 'Dr Death' to keep operating despite concerns about his work [1];
• over-commitment of Queensland Health because of political and community demands, which compromised patient care [1]

• political interference in medical standards (by financial constraints) which helped cause 'Dr Death' scandal [1];

• public servants are afraid to tell ministers what they need to know, according to the QPCU, because they would be branded troublemakers - thus government was only told what it wanted to hear [1];
• problems have been developing over a long period, so blame must be taken in part by the  the former minister and the former director general of Health Department (who were both appointed by the current premier) [1]. Queensland Health was described as the 'world's best' by the premier [1];
• problems relate to politicisation of Public Service and spending on corporate functions and 'spin doctoring' rather than on health services - for which the premier and his predecessors must take some blame [1]. Death and injury to patients was related to government inaction over an ailing health system [1];
• There has been a culture in Queensland Health of damage control - that involves ignoring facts to protect from being seen to have problems. When politicians and their executives do not want to hear bad news they try to by-pass independent minded managers [1];
• public vilification of bureaucrats who stand up to be counted - a claim by Queensland Health's DG  in an apparent reference to political interference [1].
• premier ordered cover-up deficiencies in hospitals' system [1], and required bureaucrats to rewrite reports which presented situation too negatively [1].  Senior bureaucrats have emerged as cogs in a political machine driven by Premier's Department. However the Premier argued that the inquiry was set up because government was sick of the way in which bureaucrats were behaving [1]

• anti-competitive working practices which determine who can do what - and require doctors to perform some functions which others could do - have created shortage of medical specialists and made it impossible to do anything to reduce waiting lists at hospitals. [1]

• Queensland Health apparently had very limited ability to influence its budget because of a budget process which centralized decision making in Treasury and the Cabinet Budget review Committee [1]

Management deficiencies ...

• management problems in Royal Brisbane Hospital's leukemia ward [1, 2]
• maladministration [1];
• bullying of staff [1, 2, 3, 4, 5], especially of those who highlight problems [1];
• a culture of intimidation and secrecy, which has been of concern to the Health Minister [1], and was noted by Commission of Inquiry [1];
• there has been a prevailing culture of harassment in the whole public service (starting at the top with Director Generals') of staff who pointed out problems. This ruined lives and careers. There is a huge gap between theory and practice in terms of  principles of fairness, integrity, honesty, diligence and respect for law [1]
• fear of retribution against staff who point out problems [1];
• a culture of intimidation of those who point out problems that pre-dates current management - based partly on an over-emphasis on saving money at the expense of proper health care. Overseas trained doctors were preferred because they could be more easily be controlled, and did not incur costs for patient care [1]
• preventing staff responding to federal survey seeking to identify problems [1]
• relatively very large numbers of non-medical staff [1, 2, 3];
• management emphasis only on costs, as those who run the health system have no medical knowledge [1, 2];
• poor working conditions and quality of care (eg associated with understaffing, high staff turnover, poor management, and lack of penalties for failure) [1];
• despite large additional state funding to cut surgery waiting lists, the numbers of operations performed declined and waiting lists grew [1];
• deficiencies in regional hospitals due to centralization of services [1];
• departmental officials did not mention problems with overseas trained doctors to minister in briefings - though previous minister had known [1];
• an official inquiry into an overseas psychiatrist failed to find evidence that he had been convicted on various sexual offences [1];
• there were many mechanisms to prevent what happened at Bundaberg Hospital but all of them broke down [1];
• employment of overseas trained doctors in positions above their skill levels, failure to provide promised supervision, and deportation of any who complain [1];
• Queensland Health made misleading claims about the qualifications of overseas trained doctors [1]
• management of Queensland Health has 'disintegrated' and premier should take over management responsibility, as it was unsafe to continue operating health services under current arrangements [1]. Conflict has emerged between ministers and senior bureaucrats and between bureaucrats [1]
• Queensland's mental health system is un-cooperative and more concerned with defending the Department than patient welfare [1]
• management at Bundaberg hospital saw profits as more important than patient care [1, 2]
• clinical problems and deceptive responses to them have been caused by senior staff in Queensland Health over the past 12-15 years, and many doctors have left because the organization became a dysfunctional abusive employer [1]

• systemic failure in Queensland Health started when management started calling patients 'clients'. Department liked paperwork which was destructive because it concealed the truth. Employees would not discuss real issues, because of 'control freak' mentality in management that only wanted good news. Treasury has a large influence over how money is spent. Intense politicisation also has a negative effect. Individuals in hospital hierarchy were victims of the system [1]

• Queensland Health's systems, processes, protocols, strategies, committees, policies, panels and documentary paraphernalia were an  impenetrable mass made it impossible to do anything about Dr Patel.[1]

Resource deficiencies ...

• a perceived 'unsalvageable funding crisis' facing hospitals (Ware M., 'State's free hospitals under siege', Courier Mail, 23/8/99 - which quoted an earlier government report)
• lack of state funding [1, 2, 3, 4, 5];
• lack of federal funding [1, 2];
• excessive working hours for doctors [1, 2, 3];
• inadequate capabilities at John Tonge centre [1];
• long waiting times for surgery [1, 2, 3, 4, 5, 6, 7];
• decline in bulk billing under Medicare which shifted poorer patients from GPs to overload emergency facilities [1, 2]. However it was also suggested that it is not correct to blame overcrowding on end of bulk billing, as this simply overloads emergency rooms, while overcrowding is due to more seriously unwell [1]
• over-extended emergency departments [1, 2];
• lack of intensive care facilities [1];
• funding cuts, staff shortages and bed closures [1];
• lack of staff and beds [1, 2, 3, 4, 5];
• excessive investment in buildings without also employing staff to provide treatment [1];
• poor staff morale, staff shortages and ward closures at Royal Children's Hospital [1]
• fewest medical practitioners and lowest health spending per capita of all Australian states [1]. On the other hand the Productivity Commission has produced data showing Queensland's relative efficiency   [1] - so perhaps relative low spending is not the main source of the problem;
• lack of care for mentally ill [1, 2, 3];
• disability services that are below national standards [1];
• doctors could not perform life-saving operations without approval of administrators [1]
• under-funding of mental health system [1];
• saving money by employing overseas trained doctors rather than those trained in Australia [1];
• underfunding contributed to failure of Queensland Medical Board in the case of 'Dr Death' [1];
• while state spending on health has been increasing, health costs have risen much faster [1];

Medical deficiencies ...

• closed shop for training of medical practitioners [1];
• not training enough doctors [1] / specialists [1];
• lack of trained doctors, and aging of nursing staff [1]
• unfilled training positions for specialists [1];
• medical errors [1, 2, 3] and negligence [1];
• mental health system was described as unaccountable, incompetent and life-threatening [1];
• employing a struck-off psychiatrist as a top mental health professional in Queensland health [1];
• doctors were permitted to practice as orthopedic specialists at Hervey Bay despite being completely untrained for this work [1]
• delays in responding to warnings about apparently unsafe surgery practices at Hervey Bay hospital [1]
• Health Minister suggested that it is not possible to guarantee safety in Queensland hospitals [1]
• 1 in 10 hospital patients suffer harm as a result of staff mistakes - quite apart from the actions of a 'Dr Death' [1]

Challenges to Queensland's health system due to changes in, and features of, its environment have also been identified, including:

• strain on health system due to aging population [1];
• high costs of medical technology [1];
• poor average health position of indigenous Australians [1, 2];
• attacks on staff by drunk / disgruntled patients [1, 2];
• poorly educated community suffering a higher rate of health problems [1]
• emerging health challenges facing the community including: widespread obesity [1]; chronic diseases which are now affecting the young and middle aged; and 'super bugs' which resist antibiotics [1];
• more effective use of market mechanisms within the health system - this being one of the proposals by the Productivity Commission for the next stage of competition policy reforms;
• high levels of injury arise from medical errors (with 10% of those in hospitals are affected [1]) even without rogue doctors;
• complex questions are in relation to the relative benefits of preventive health and medical services. The framework of medical science (ie finding ways to cure diseases) is under challenge from diverse alternative therapies because the complexity of biological system makes it hard to be sure what will improve the situation (noting escalating incidence of adverse drug effects and withdrawn drugs; growing immergence of antibiotic resistant organisms which will (on present trends) make infection a major killer for first time since the 1930s; high costs of chronic diseases which have no medical cure but arguably require better nutrition).
• proposals for a more holistic, patient-centered health system [1]
• proposals for integrated Primary Healthcare Organizations to revitalize partnerships with regional hospitals [1]

• nurse graduates are not ready for work (and there is a 40% drop out rate in the first 2 years which creates staffing difficulties) because  nurse education was transferred from hospitals to universities 20 years ago - and graduates, who do not know what to expect are dropped into acute situations. [1]

Attachment C: Putting the Problem in Context

The systemic defects in Queensland's public administration (including the health system) outlined in this (intended) submission are arguably the result of an unbalanced approach to economic strategy to deal with the imperative of economic change over the past 10-20 years.

How this strategy gave rise to problems in public administration generally is suggested in Decay of Australian Public Administration. The latter refers to the transformation of Public Services into 'politicized pseudo-businesses' and to the resulting defects in governance which have had symptoms such as: unbalanced economic performance; social stresses; and chronic weaknesses in infrastructure, service delivery and regulatory roles. These arose from:

• financial constraints on, and distortion of, public functions supposedly to boost economic productivity; and
• politically driven erosion of the professional / technical competence of the public sector in order to ensure there could be no 'bureaucratic resistance' to the latter 'reforms'.

That the economic strategy which drove such changes has been severely unbalanced is argued in Review of Competition Reforms: A Commentary - which refers to:

• the focus given to ensuring competition without a corresponding attention to competitiveness (ie to the ability to compete successfully, which competition alone does not ensure and which is now emerging as a critical challenge for Australia's economy); and
• the failure to realistically take account of the effect which theoretically constructive changes would have on practical aspects of public administration.

Coercive Centralism

Another source of dysfunctions in Queensland's health system is likely to have originated with the fiscal imbalances within Australia's federal system, and to have then escalated in a vicious circle.

This is a subject which is starting to gain attention in other quarters, and so will not be addressed here in detail, except to note:

• the distortion of public sector activities which financial imbalances can give rise to (eg in terms of fragmentation; duplication; and buck-passing);
• the escalation of problems in the effective performance of state functions associated with the rapid growth of special purpose funding in the 1970s - which (a) inhibited longer term financial commitments and (b) forced state agencies to become more skilled in lobbying than in actually doing their job (in the same way that tariff protection affected manufacturers);
• the current federal government's adoption of an increasingly coercive approach in its relationship with the states - because it reached the (not unreasonable) conclusion that the states (quite predictably) are not performing effectively;
• the coercive approach is likely to increase, rather than reduce problems, because it involves (in effect) the application to the states by the federal government of the same sort of overly simplistic prescriptions which state administrations have coercively applied to their agencies for a decade which compounded the systemic difficulties they suffered.

These points are explored further in Australia's Governance Crisis.