To the Editor: The articles by Reid1 and Paterson,2 former bureaucratic leaders of the New South Wales and Victorian health systems, respectively, on the process for developing the 2003–2008 Australian Health Care Agreements (ACHAs) are disappointing. They offer few original conceptual insights or clear proposals.

Reid's dream is that the 2003–2008 ACHAs will see "a new expression of national health policy on which funding decisions can be based". However, he presents only old ideas, such as "ACHAs will need to extend beyond public hospital issues to incorporate primary care", and, on the perennial cost-shifting between the two levels of government, "clearer lines of financial management of care and appropriate incentives are needed". Reid laments that the focus of all previous agreements has been "narrowly limited to one aspect of healthcare . . . the maintenance of universally accessible public hospital care free of charge".

Paterson does propose something radical, and the core of his proposals is that "the payer must stand behind the patient and not between the patient and the provider". The way to Paterson's "outcome-enabled health system" is to "relieve the constraints that bind inputs and distort the 'production' system". Does he mean we need more doctors and nurses, or does he mean substitutes should perform some of their current activities? Patterson proposes more investment in "information and communications technology" to facilitate a gradual move to "patient-based funding". Does this mean capitation, medical savings accounts, or is he proposing non-insurable copayments? Whatever it means, there will be "no outcome-driven healthcare until the system recognises the whole patient", and this will only be achieved with "electronic patient record systems in routine and ubiquitous daily use by providers".

Given their experience as senior health system administrators, it is a pity neither Reid nor Paterson provides any explicit suggestions that recognise the key factor that will determine the outcome of the ACHAs. This is the policy gridlock that any federal system almost inevitably imposes.

A recent issue of the Journal of Health Politics, Policy and Law was devoted to health politics and policy in a federal system. The editor, Petersen, concludes with a view relevant to Australia: "You can love it, you can hate it, but . . . federalism thwarts uniformity and universalism, frustrates responsiveness and policy analysis, limits large scale innovation while churning more localized mills of idea generation and promotion, and offers a permanent employment plan for health policy researchers".3

Parts of Australian health arrangements certainly need an overhaul. An example is general practice. This sector, differently organised and financed, could deliver much more to the community, the rest of the healthcare system, the Federal Government and to general practitioners themselves. Change in this sector would not depend on improbable cooperation between levels of government, and would be more manageable than the multifarious whole-of-system reforms about which Reid and Paterson speculate.