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30 Mar 2016

A deal to inject up to $7 billion from the Commonwealth into the public hospital system was being mooted ahead of this Friday’s Council of Australian Governments meeting amid warnings it will not be enough to sustain services in the face of spiralling demand.

As Australian Medicine went to print, speculation was mounting that Prime Minister Malcolm Turnbull was close to arranging a deal with his State and Territory counterparts to provide a multi-billion dollar funding boost to public hospitals amid warnings that $57 billion of cuts unveiled by the Abbott Government in 2014 would plunge the system into financial crisis and cause a blow-out in waiting times.

Less than a week after meeting with AMA President Professor Brian Owler and the AMA Federal Council on 17 March, Mr Turnbull told reporters he would “have more to say in the lead-up to [the COAG meeting] relating to health and schools and so forth”.

At the AMA meeting, the Prime Minster showed keen interest in reports from Council members that public hospitals were experiencing a rapid increase in demand that vastly outstripped the pace of population growth.

Mr Turnbull wanted to know why this was occurring, and was told a big factor was increased life expectancy, which meant that patients were more likely to present with multiple chronic health conditions that were more expensive and complex to treat, placing huge demands on hospital resources.

These stresses have been reflected in the AMA’s Public Hospital Report Card released earlier this year, which showed that improvements in the performance of public hospitals had already stalled, and in some respects were starting to go backwards.

Professor Owler said this was only going to get worse as big Budget cuts began to bite next year, and warned that suggestions the Federal Government might stump up $6.7 billion over four years, to be shared among the states, would not be enough.

It is understood the Government was considering an increase in the tobacco excise and reduced tax breaks for superannuation to provide the extra funds.

But the AMA President warned that injecting an extra $6.7 billion into the system was inadequate.

“[The] figure of $6.7 billion has been talked about over the next four years to deal with both health and education, …I'm afraid that’s just not going to cut the mustard. It's not going to mean that states can continue to provide the level of services that patients expect and deserve,” he said. “By any stretch of the imagination, cobbling together $6.7 billion over a four year period for states and territories to fund health and education is just not going to make it.”

Professor Owler said the Commonwealth needed to dump plans to index hospital funding at inflation plus population growth, which he said was completely inadequate to ensure hospitals were able to maintain their services.


Adrian Rollins

Published: 30 Mar 2016