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As noted in the Andersen report, the approaches of the past simply have not worked. I quote from page 42 of the Andersen report:

The current service agreement and global budgeting approach focuses Hospital Management on inputs rather than outputs. This funding approach does not provide any direct or explicit link between the level of funding provided and hospital output. Under the global budgeting approach, expenditure control is focused on inputs to the system that reinforce the use of existing practices, and encourages cost reduction strategies based on reduced outputs (i.e., through bed closure or theatre list reductions) rather than through increased operational efficiency to reduce per-unit expenditure.

That basically says, in a nutshell, that what the previous Government was doing, in focusing on inputs, just meant that we ended up with fewer and fewer beds, fewer and fewer people having minor and major operations, and larger and larger costs.

Mr Speaker, the role of the Government must be to provide clear, unambiguous direction for the future of our health system. The changes that need to be made will require leadership, teamwork and enthusiasm. This, also, has not always been apparent in the past. Today I will outline the broad direction that the Government will take. Our aim is quite simple: To provide a better, more accessible, more cost-effective health system and hospital care for the people of the ACT. To achieve this we will bring a strategic and analytical approach to the direction of service development and reform. It is this sort of strategy that is long overdue.

The reforms have already begun, I am pleased to say. As one of our first initiatives we established the new Department of Health and Community Care to take responsibility for health, and ageing and disability services. This will provide a more focused service delivery for the ACT and place a greater emphasis on continuity of care. Progress is also being made in negotiations with the visiting medical officers. About 20 per cent of VMOs have now signed contracts that are expected to lead to savings of more than $2m in a full year. I said before, Mr Speaker, that we must be cooperative in our approach to health. Certainly, there has been very little cooperation with regard to VMOs in the past.

Mr Speaker, there are three key points to our strategy: First, developing a clear focus for our future directions; secondly, implementing the findings of the Andersen review on the efficiency of the ACT health system; and, thirdly, introducing casemix as part of our funding formula for Health. I will outline each of these in turn. First of all, as to our future directions, to achieve change we need to focus clearly on our future directions and the health outcomes we want for our community. The future directions for the Department of Health and Community Care are fivefold: First of all, to improve Health by providing a system that ensures continually improving health outcomes for the people of the Canberra region. Secondly, to improve quality of life by providing a health and community care system that maximises opportunities for people requiring assistance with daily living skills to enhance and enrich their lives and allow them to live as independently as possible. Thirdly, to improve client service and outcomes by providing quality health and community care services that are appropriately targeted and prioritised to achieve optimal health and quality of life outcomes that have a strong consumer focus and are

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