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The capacity of the public hospital system is one of the fundamental foundations for delivering high-quality, safe, and accessible health services. A key issue in the last Federal election was who was best placed to fund and run our public hospitals.

Doctors working in public hospitals can contribute essential expertise to the management and operation of the hospitals. Local knowledge from local doctors is essential to improve clinical care and decisions about strategic planning, budgeting and resource allocation.

There is insufficient funding and capacity in our public hospital system now – not enough beds – to ensure that patients are treated either in the emergency department or admitted into hospital in safe and clinically appropriate timeframes. Public hospital funding needs to be increased to provide sufficient beds and the staff required to treat the patients in them. Otherwise, patient care in hospital is delayed and the safety of patients is put at risk.

Performance indicators, national standards, and benchmarks are all essential tools in monitoring, evaluating, and improving the quality, safety, efficiency and accessibility of the health care system – but we need to ensure that they do not interfere with decisions about best care for patients.

Most public hospitals also undertake research and training as part of their normal functions. Ensuring that ‘on the ground’ research and training is ongoing in our public hospitals means that we can continue to improve the care of future patients and to train future generations of doctors.

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Insufficiently funded hospitals reduce the number of services they provide to their communities, or reduce the range of services, to come in on budget. This compromises patient access to services and the type of care they receive.

Insufficient numbers of public hospital beds mean that people in emergency departments who need to be admitted into the hospital instead wait on trolleys in corridors. Insufficient public hospital capacity means that public patients wait longer than they should for elective surgery and other specialist medical services.

This isn’t just a matter of inconvenience. It has been estimated that there is a 20-30 per cent excess mortality rate every year that is attributable to access block and emergency department overcrowding in Australia.¹ Not enough funding means that hospitals can’t meet national standards and targets that aim to ensure that patients can expect the same reasonable level of service and quality of health care, wherever they receive treatment across Australia.

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Unless hospitals are properly funded they cannot deliver the acute care services that communities need, nor can they meet expected national standards for quality and timely access to hospital care.

There is a shortfall in funding for public hospitals that needs to be urgently addressed, and future growth in demand must be met.

Hospitals need to be supported to deliver a range of services and perform a range of functions to high standards. Performance standards and monitoring are important but must not introduce perverse incentives that compromise good patient care.

The management of health care services works best when local doctors are engaged in their clinical and corporate governance, including in service planning and decisions about the allocation of such things as resources, budgets, staffing, equipment and capital expenditure.

In the context of best care for patients, doctors can identify potential efficiencies in one area that can safely free up resources for other patient needs.

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More beds

Every public hospital must have sufficient capacity to operate at an average bed occupancy rate of 85 per cent. Expanding the capacity of the public hospital system will result in more timely access into hospital for patients, and safe occupancy rates once patients are in the hospital.

The next Government must introduce a transparent mechanism for tracking whether any new funding commitments actually result in the opening of new beds by:

• Commissioning a monitoring system called Bedwatch to publicly report on the number of new and existing beds available in public hospitals;
• Ensuring that Bedwatch also monitors important factors related to hospital occupancy such as access block in emergency departments; and
• Requiring the State and Territory Governments to report the number of available beds for each public hospital, and their average occupancy rates, on an ongoing basis as part of their obligations to report against performance benchmarks.

Doctor engagement in decision-making

Doctors must be genuinely involved in decision-making at the local level. The next Government must ensure that:

• Local doctors are represented on any local hospital governance body;
• Members of such a body are selected transparently and free from political influence;
• Such a body has the power to hire and fire the CEO of the hospital; and
• Decisions made by local hospital governance bodies are transparent and publicly available.

Secure funding for research and training in public hospitals

Research and training are integral parts of the role of public hospitals in improving patient care and in training junior doctors. The next Government must ensure that:

• There is sufficient funding allocated for research and training undertaken in public hospitals;
• Doctors are involved in decisions about how this funding is distributed and used at a local level; and
• Funding for research and training in public hospitals is linked to transparentlyreported and independently-audited performance indicators.

Performance indicators

The next Government must ensure that:

• Public hospital performance indicators are sensible, evidence-based, achievable, and sufficiently resourced so that they can be used to improve the quality, safety and accessibility of health care;
• There is flexibility in the development and implementation of performance indicators so that they don’t introduce perverse incentives in the way that patient care is managed, or compromise patient care in any way;
• Doctors are involved in the development and implementation of all national performance indicators and targets;
• There are no penalties for failing to achieve national targets and, instead, information about performance is used to identify areas for improvement and additional investment; and
• Waiting lists are transparent so that patients and doctors can make decisions about care options.

Effective funding of public hospital services

The goal of hospital funding systems should be to support effective health care services, rather than the cheapest services. A nationally ‘efficient’ price risks underestimating and oversimplifying the complexity of hospital services across different hospitals and different geographical areas and, therefore, their capacity to meet demand.

The next Government must ensure that:

• Hospitals are paid on the basis of the ‘effective’ cost of care, which will require more funding for public hospitals, not less, rather than on the basis of ‘efficient pricing’;
• The ‘effective’ price is indexed annually at an appropriate rate that recognises real increases in operating costs, such as wages and equipment;
• The ‘effective’ price allows variation for local flexibility and incorporates sufficient loadings and adjustments to reflect the variable geographic and other circumstances of individual hospitals;
• The ‘effective price’ does not compromise or limit clinical decisions that doctors make for their patients; and
• ‘Effective pricing’ is available to cover the real cost of care.

¹ Forero R and Hillman K. Access block and overcrowding: a literature review – prepared for the Australasian College for Emergency Medicine. University of NSW and The Simpson Centre for Health Services Research, 2008.

* For a full pdf version of the Key Health Issues for the 2010 Federal Election click here