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Legislative Assembly for the ACT: 1996 Week 3 Hansard (28 March) . . Page.. 769 ..

MR DE DOMENICO (continuing):

The Auditor-General also makes some comments about the model. Once again, let us read the Auditor-General's report - which is what we are debating here today - and see exactly what he says. The Auditor-General's main criticism concerns the doubtful validity of the model used by the department for estimating the 1995-96 VMO costs and savings. Let us have a look at the report. At page 3 it says:

During discussions on the audit, Health Department and Woden Valley Hospital management provided comment that the contracts, while being a significant reform, are only part of an integrated approach which is being progressively developed to change medical practices at the hospital.

That is an important statement. He is saying that the VMO contract is only part of the reforms. He goes on to say:

Management also commented that over a period of years, it could be expected that changes in medical practices will produce significant benefits.

So, he is saying that, over a period of time, because this Government did settle the dispute with the VMOs, because of the contract that this Government put into place, it can be expected that changes in medical practices will produce significant benefits in the future. But in here we do not want to talk about the future, do we? We try to think of the past; we try to make some political points because it might make a good headline tomorrow in the Canberra Times. But members on this side of the house do think of the future, notwithstanding what members opposite might think from time to time.

Mr Speaker, the Auditor-General's report goes on - this is the significant part:

The scope of this audit did not extend to an assessment of potential benefits which may be generated from the medical practice changes referred to in the previous paragraph.

So, its scope was to have a look at the VMO contract and the projected savings this year - not at what is going to happen in the future. What did it say on page 4? Let us have a look at what it said, because there has been some conjecture about whether this model is good or whether this model is bad. The Auditor-General said this:

... there is considerable doubt as to the validity of the cost model developed by Health to predict potential savings from changes in contract mix ...

On page 14 he went a step further and said:

... there are concerns about the robustness of the model for detailed cost forecasts. Some of the reductions forecast are substantial and appear unachievable, at least in the short term.

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