NSW hospitals are different: Keneally

NSW needs to have its own funding system as part of national health agreement, says Premier.

Gillard government faces an uphill battle to finalise its national health agreement by the middle of this year if comments by NSW Premier Kristina Keneally are anything to go by.

Under Labor's $20 billion plan larger public hospitals will be paid for each procedure they perform rather than via block grants.

The fee will be based on an agreed "efficient price" for each service provided.

But Keneally made it clear on Monday she thinks costs in NSW are higher than in other states and that reality should be reflected in the final agreement.

"We have already, in our discussions with the Commonwealth, highlighted a range of differences in relation to NSW," the premier told reporters in Canberra.

"NSW, unlike Victoria, has big metropolitan areas and vast regional areas.

"NSW, unlike some other jurisdictions, does have higher wages when it comes to nurses and doctors."

Keneally said her state therefore needed to have "a different efficient price for service" compared with that offered to Western Australia, Queensland or Victoria.

The draft COAG agreement signed by the prime minister and premiers and chief ministers last week allows for variations in activity-based funding across the country.

It states that the fees set by a yet-to-be-established independent pricing authority "will take into account a small number of loadings to reflect legitimate and unavoidable variations in the costs of service delivery, including those driven by hospital location".

Some health experts are concerned this provision could lead to a serious bunfight among the states and territories that will delay Labor's health reforms.

But Australian National University academic Robert Wells is convinced the pricing authority "will know what's a fair dinkum argument and what's not" when it comes to varying the efficient price for various services.

AAP

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