❓ Mr. Cook questions the Minister for Health about the cost-effectiveness of the Serco contract at Fiona Stanley Hospital, suggesting it's a financial burden. The Minister defends the contract, stating it's cheaper than public sector alternatives and addresses broader hospital funding challenges.
AnsweredQoN 836Legislative Assembly
QuestionView source ↗
FIONA
STANLEY HOSPITAL — SERCO CONTRACT — MINISTER FOR HEALTH'S
COMMENTS
836. Mr R.H. COOK to the
Minister for Health:
I have a supplementary question. To refresh the minister's
memory, in evidence today it was made clear that in terms of cutting costs,
there was not much flexibility on the non-clinical side—does the
minister remember that? I therefore ask: when the minister said that the
privatisation contract would make this hospital cost-competitive, is it not now
clear that his privatisation at Fiona Stanley Hospital is a millstone around
the hospital's neck?
STANLEY HOSPITAL — SERCO CONTRACT — MINISTER FOR HEALTH'S
COMMENTS
836. Mr R.H. COOK to the
Minister for Health:
I have a supplementary question. To refresh the minister's
memory, in evidence today it was made clear that in terms of cutting costs,
there was not much flexibility on the non-clinical side—does the
minister remember that? I therefore ask: when the minister said that the
privatisation contract would make this hospital cost-competitive, is it not now
clear that his privatisation at Fiona Stanley Hospital is a millstone around
the hospital's neck?
AnswerView source ↗
The answer is no. Once again, I did not say that, but I will
relate what the conversation actually was. The member for—sorry, what
is she?—West Swan asked —
Mr
R.H. Cook interjected.
The SPEAKER :
Member for Kwinana!
Dr K.D. HAMES : I always get West Swan and Swan Hills confused—West Swan and
Swan Hills always get me.
Several members interjected.
The SPEAKER :
Members! Hansard is trying to record what is happening.
Dr K.D. HAMES : The
question was around the fixed component of the contract for south metropolitan,
but particularly for Fiona Stanley Hospital, and—I am paraphrasing—what
flexibility that gave the government in terms of adjusting its costs when, as
the member knows, we are above the national efficient price. The suggestion was
made from the member's first question that I had said it was above that
of other hospitals. We know Sir Charles Gairdner Hospital is pretty right, but
Royal Perth Hospital is above the national efficient price and so is Fremantle.
But we did not know, and my staff were not able to answer at the time, what the
comparative rates were, and I think we agreed that we would provide that answer
later. But they are above the national efficient price, as is our country
hospital service. In fact, we have a state price that we are above as well. Part
of the problem has been the relocation of patients coming away from Swan
District Hospital, away from Royal Perth Hospital and away from Fremantle
Hospital, and balancing all those numbers. So, our total price for that
hospital and others is higher than it should be, and it is something we have
acknowledged through budget.
Several members interjected.
The SPEAKER :
Members!
Dr
K.D. HAMES : I am getting to that; be patient. Patience is a virtue—my
wife tells me that all the time!
The opposition says that the
privatisation restrains our ability to adjust prices. In some ways that is
correct because there is a fixed component of the price, and we can only fiddle
with what is left with the rest to be able to adjust that price.
Several members interjected.
The SPEAKER :
Members!
Dr K.D. HAMES : But
assume, as the public sector comparator shows, that the price of that service
being provided by the private sector is much less than it would have cost us —
Several members interjected.
Dr K.D. HAMES :
What the opposition is saying is not true and it is making assumptions that
have not been confirmed. Assume that the public sector comparator price is
cheaper —
Several members interjected.
The SPEAKER :
Members!
Dr K.D. HAMES : If
we have control of the whole hospital and that gives us more ability to cut
prices, how can we cut prices by cutting the number of orderlies or by cutting
the number of cleaners? What the opposition is saying is that it wishes —
Ms R. Saffioti interjected.
Dr K.D. HAMES : The member for West Swan should not be talking because she is on the
committee. The opposition is saying that if it were in government, it would
like to have the opportunity to have that in the public sector so it could cut
funds from that as well to get back to the national efficient price. Our
contention is that we have already cut prices in that section by going to the
private sector and doing it cheaper, so that leaves us with the other component
that has to be adjusted. Because of the Labor Party and its union mates—the
big donors to the Labor Party, the big donors to everybody—the poorest
paid workers in the state are making the biggest financial contributions of any
union. That is why it has so much power, because it gives all you guys so much
money.
relate what the conversation actually was. The member for—sorry, what
is she?—West Swan asked —
Mr
R.H. Cook interjected.
The SPEAKER :
Member for Kwinana!
Dr K.D. HAMES : I always get West Swan and Swan Hills confused—West Swan and
Swan Hills always get me.
Several members interjected.
The SPEAKER :
Members! Hansard is trying to record what is happening.
Dr K.D. HAMES : The
question was around the fixed component of the contract for south metropolitan,
but particularly for Fiona Stanley Hospital, and—I am paraphrasing—what
flexibility that gave the government in terms of adjusting its costs when, as
the member knows, we are above the national efficient price. The suggestion was
made from the member's first question that I had said it was above that
of other hospitals. We know Sir Charles Gairdner Hospital is pretty right, but
Royal Perth Hospital is above the national efficient price and so is Fremantle.
But we did not know, and my staff were not able to answer at the time, what the
comparative rates were, and I think we agreed that we would provide that answer
later. But they are above the national efficient price, as is our country
hospital service. In fact, we have a state price that we are above as well. Part
of the problem has been the relocation of patients coming away from Swan
District Hospital, away from Royal Perth Hospital and away from Fremantle
Hospital, and balancing all those numbers. So, our total price for that
hospital and others is higher than it should be, and it is something we have
acknowledged through budget.
Several members interjected.
The SPEAKER :
Members!
Dr
K.D. HAMES : I am getting to that; be patient. Patience is a virtue—my
wife tells me that all the time!
The opposition says that the
privatisation restrains our ability to adjust prices. In some ways that is
correct because there is a fixed component of the price, and we can only fiddle
with what is left with the rest to be able to adjust that price.
Several members interjected.
The SPEAKER :
Members!
Dr K.D. HAMES : But
assume, as the public sector comparator shows, that the price of that service
being provided by the private sector is much less than it would have cost us —
Several members interjected.
Dr K.D. HAMES :
What the opposition is saying is not true and it is making assumptions that
have not been confirmed. Assume that the public sector comparator price is
cheaper —
Several members interjected.
The SPEAKER :
Members!
Dr K.D. HAMES : If
we have control of the whole hospital and that gives us more ability to cut
prices, how can we cut prices by cutting the number of orderlies or by cutting
the number of cleaners? What the opposition is saying is that it wishes —
Ms R. Saffioti interjected.
Dr K.D. HAMES : The member for West Swan should not be talking because she is on the
committee. The opposition is saying that if it were in government, it would
like to have the opportunity to have that in the public sector so it could cut
funds from that as well to get back to the national efficient price. Our
contention is that we have already cut prices in that section by going to the
private sector and doing it cheaper, so that leaves us with the other component
that has to be adjusted. Because of the Labor Party and its union mates—the
big donors to the Labor Party, the big donors to everybody—the poorest
paid workers in the state are making the biggest financial contributions of any
union. That is why it has so much power, because it gives all you guys so much
money.
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