Yes, of course it’s a pre-election, pre-emptive strike by the Labor states and territories in their perennial battle with the Feds over hospital funding. But that doesn’t mean the report analysing Federal health funding, released yesterday by states and territories, doesn’t say a few things worth hearing.

It’s a shame that the politicians’ sound bites have made it sound like the document (Caring for our health? A report card on the Australian Government’s performance on health care) is all about public hospital funding when it is raising a much bigger issue: how should we best spend our health dollars to suit our changing health needs?

At the moment we’ve got it all a-se about; much of the debate and focus remains stuck on hospitals rather than primary care whose importance – both in maximising health and controlling health costs – is emphasised by just about every health planning document in the world.

What this report shows is that Australians are finding it more difficult to see a GP – particularly if they live outside the most affluent urban areas – while the costs of private medical specialists continues to increase way ahead of inflation. This inversion of what a health system should look like is being helped along by Federal policies promoting private health insurance and private hospitals.

For a Government which prides itself on economic management, the Howard team is remarkably relaxed about what it is achieving for the $3 billion-plus annual subsidy for private health insurance (about 7 per cent of its total health spending). It’s buying plenty of equity for private health funds and encouraging private specialists’ fees to continue their merry rise, and yet we don’t know much about what health returns we’re getting for all that no-strings investment.

It’s a very safe bet that the main beneficiaries are the well-to-do. These include those who can afford escalating private health insurance premiums and the ever-increasing out-of-pocket costs of health care, as well as the medical specialists and private hospital investors who do very nicely out of the whole arrangement.

It’s the poor and those in greatest need of a strong primary health care system who are the greatest losers. The contrast between the open-ended subsidy of the private sector and the continuing crunch on public hospitals is glaring.

But it’s not surprising this issue – the elephant in the room – hasn’t figured much in the political sound bites about the report. No doubt the document would have taken a much tougher line if the rebate wasn’t such an awkward issue for Federal Labor, who are just as happy as the incumbents to support a health care system focused firmly on servicing the well-heeled.