Consideration of social impact of privatising health services a priority

9/8/95

The social impact is an important consideration when hospitals are considering contracting out of non-core health services, particularly in remote and rural Western Australia.

Health Minister Graham Kierath told health administrators and managers and directors of nursing attending the Hospitals Association of WA annual conference that the Government would also not accept any reduction in services to patients under contracting-out arrangements.

"In visiting many rural and remote areas, I have found that usually one of the biggest buildings and one of the biggest employers in the town is the local hospital," Mr Kierath said.

"Derby provides one of the best examples.  Much of the town revolves around the operations of the hospital.

"The social impact of changes to the way these hospitals are structured and managed becomes a vital consideration in any change process.

"In many country areas there may not be private sector providers of some non-core services.

"In some areas there may be a risk of creating monopolies.

"Each case will be looked at on its merits.

"We are not about replacing public sector monopolies with private sector monopolies, in the city or in the country."

Mr Kierath told the conference it was an opportunity to 'clear the air' with regard to the Government's policies involving the private sector in the management and operation of public facilities.

He said use of the word 'privatisation' left many people with the impression that the Government was getting out of the game and promptly turning its back on what happened afterward.

"That is not what we are about - what we are moving towards is greater private sector involvement in the running of hospitals if, and only if, the quality and volume of services is right," the Minister said.

"The private sector has a lot to offer and if a private company puts forth a business plan to build and in some cases to operate a public hospital, we will look at that plan very closely and with great interest."

Mr Kierath said that in the case of Joondalup and Peel, current hospitals were expanding and private hospitals were being built in the same location.

The Government would look at private sector proposals to do all the building.

"It makes sense that if a private company is going to be building a private hospital on a nearby site, it is a lot more efficient for one agency to do the lot," the Minister said.

"Likewise, it would be more efficient to have one agency operating the two hospitals, and we will be looking very carefully at private proposals to do that.

"But I will make it clear:  any such proposal has to include satisfactory arrangements for current staff.

"The price has to be right and the services have to be up to scratch.

"And the Government is still paying the piper - it is still calling the tune.

"Any agreement eventually reached will have been carefully and thoroughly negotiated to set out clearly prices to be charged and services to be provided.

"There will be a strict monitoring of the quality of those services, with stiff penalties for non-compliance."

Mr Kierath said the situation with contracting-out and private management of health services was one case where there were distinct advantages in not being the first to move.

The State would learn from mistakes which had been made by others and was devoting resources to getting it right.

There was a band of dedicated and capable people to negotiate hard with the private sector to get the best possible deal and to make sure contractual arrangements were impeccable.

"At the end of the process, if change is to happen it must provide an equal or better service to our primary concern - the patients - and cost less so those savings can be used to further improve our health services," Mr Kierath said.

Media contact: Brian Coulter  222 9595 / 481 2133