28/01/2016 5:24 PM AEDT | Updated 15/07/2016 12:51 PM AEST

Hospital Report Card: An 'F' For Funding

We need a vision for health in this country. We need to value health most of all. We can't have an educated, innovative population if it's not a healthy population to begin with.

Steve Bronstein via Getty Images
money bags, investment safety, risk, resuscitation, revived

Every year the AMA releases its Public Hospital Report Card. It's a project that we've been looking at year on year, looking at the performance of our public hospital system. And I think this report card is probably one of the most important report cards that the AMA has ever produced.

We know that previously there was a lot of effort that was put into improving the waiting times in emergency departments, and for elective surgery. There was a lot of policy that was created; funding went into improving infrastructure in our emergency departments, and to provide incentives for our public hospitals to actually meet those targets and, for the large part, they were successful.

We have seen improvements over the past few years, particularly here in New South Wales, but right across the country, in terms of emergency department performance and elective surgery. Unfortunately, this year we've seen those improvements disappear. We've seen, in many cases, states and territories find that they've either stagnated in terms of their performance, or they've actually gone backwards, in some cases quite dramatically.

This comes on the back of the changes that were announced in the 2014 Federal Budget. Those changes actually changed the way that the funding for the public hospital system is calculated by the Commonwealth. That is the Commonwealth's contributions to states and territories. So, instead of the funding arrangements, which were supposed to look at 45 percent of growth funding coming from the Commonwealth then going to 50 percent, they changed the formula for 2017 from next year to mean that the Commonwealth contribution would be on the basis of population growth and CPI.

The Government can argue whatever they want about the fact that $57 billion was taken out compared to the forward estimates over the decade. But what is plainly apparent is that, while there might be an increase in funding year on year, the increase and the contribution from the Commonwealth is going to be woefully inadequate to meet the healthcare needs of all Australians.

The premiers across the country have noted this problem. We saw the COAG leaders retreat back in July. We saw the conversation that's been happening around GST, around other tax reform, maybe raising the Medicare levy, all of which is aimed to try and avoid what Premier Mike Baird described as a funding cliff for states and territories when it comes to public hospitals.

If our hospitals are struggling to meet the demand now, we're seeing more patients, not only more patients but sicker patients, more complex patients, presenting to our emergency departments. Our hospitals are struggling to meet the demand that's there before them, so when these changes come into effect as of 2017, obviously the performance of our public hospitals is going to suffer even further.

When we talk about elective surgery, we're not talking about cosmetic surgery, we're talking about procedures that mean that patients are trying to resolve issues where they might be debilitated, or in severe pain. We're talking about cancer operations, we're talking about heart bypass operations. These are operations which are life saving, life changing for people, and when people wait longer on an elective surgery waiting list it means that they're sicker.

So, for instance, if you can't work, you can't exercise, you put on weight, get diabetes, cardiovascular disease, and a whole range of other issues, which means by the time you actually get your procedure, you will be sicker and your outcome will be poorer.

Likewise in emergency departments.

Steve Parnis, the Vice-President at the AMA, is an emergency department physician, and we know that if you wait longer times in emergency departments it's not a matter of inconvenience; it is a matter of greater complications. We know that the evidence says that if you wait longer in an overcrowded emergency department, if you're not in the right bed, in the right part of the hospital, getting the right care by the right team, you're outcome will be poorer. There will be more complications and morbidity and mortality will increase. That is why we had the policy focus that we had over the past few years.

Now we have a situation where we have had a number of other cuts that have been introduced into the system; we've got the Medicare rebate freeze, we've got the pathology and diagnostic imaging cuts of over $600 million that were introduced in last MYEFO. All of these things that are being taken out of health are going to impact on patients, they're going to be more likely to present to public hospitals, particularly when people can't afford to go and have their tests or their diagnostic imaging, and that is going to put even further strain on our public hospitals.

We need a vision for health in this country. We need to value health most of all. We can't have an educated, innovative population if it's not a healthy population to begin with.

We are at a crossroads here. We need to sort out the revenue that's going to fund our public hospital systems and our healthcare systems into the future. We have a new Prime Minister, we have a new Treasurer, and I think it is going to be up to them and this Government to make the changes in the next Budget, due in May, that will mean that we actually put value on health. That we make health of this nation a priority, and that we fund our public hospital system and put a value on health. That we made the health of this nation a priority, and that we fund our public hospital system adequately to meet the healthcare demands of all Australians.


This is an edited transcript of a speech Professor Brian Owler gave at the AMA NSW Conference Centre on 28 January, 2016.