AMA Transcript - Public Hospital Funding, Legionnaires' outbreak

Subject: Public Hospital Funding, Legionnaires' outbreak

BRIAN OWLER:     Alright. Well, thanks for coming out this morning. We're still talking about the 2014 Federal Budget. The AMA's been quite vocal in its concerns about a number of the measures, including the co-payment measure, but more recently about public hospital funding. And the reason for that is the rubber starts to hit the road from next year. From 2017 we're going to see the cuts that were announced back in 2014 really start to see services in our public hospital system being challenged. And what I want to do today is really highlight the need for this Federal Government to make sure that they pay proper attention to public hospital funding.

There is the perfect opportunity; it's an election year, obviously, but there's also a new Treasurer and Prime Minister, there's a Federal Budget that's due to be delivered very shortly and, obviously, if we're going to address this problem we need to see some announcements coming out about that very soon.

To refresh people's memories, from the 2014 Federal Budget we saw $57 billion over ten years come out of the Budget. And so this graph illustrates the problem. We've got where expenditure or the Budget was supposed to be, and we've got what happens from 2017. And, as you can see it's almost flat lined. And that is going to translate to less services for patients, it's going to mean patients languish on elective surgery waiting lists for long periods. And those people are not having cosmetic surgery; they are having procedures to deal with painful, disabling conditions, cancers, life-threatening conditions. That's what it means for these people. But it also means that people wait in emergency departments for unacceptable periods, and that's just not a matter of inconvenience, that's a matter of increasing their complications, because we know that if you have overcrowded emergency departments, if you're having patients waiting for too long in emergency departments, that translates to poorer outcomes.

So, if we want to make sure that we maintain the increase in life expectancy, the quality of life that our medical services deliver, we've got to make sure that we continue to fund our public hospital system properly. Now, we are hearing discussions that have been happening between the states and the Commonwealth; I've got to say cobbling together something right at the last minute, and that figure of $6.7 billion has been talked about over the next four years to deal with both health and education, we'll I'm just… 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, and I think if this Government is serious about making sure that we have a healthy society, they need to make sure that they continue to fund our public hospital system.

So, I do hope that this Government will turn its attention to this issue and make sure that we are able to maintain our services, make sure that we are able to deal with things like elective surgery waiting lists, but also the amount of time that people spend in emergency departments, and the treatments that they receive in hospital. Happy to take questions.

QUESTION:  [Inaudible question].

BRIAN OWLER:     No, I've not had any meetings with the Government about this issue. I've certainly raised it with Minister Ley. But of course, a lot of these discussions are really being had at Treasury level. And I've got to say, I understand why that's the case, but it really misses the point of what these services are about. It's not just a number on a page, it's not just dealing with something that you can cobble together at the last minute to get through an election campaign, it's actually about making sure that we have a commitment from the Commonwealth Government to maintain services for patients in public hospitals.

QUESTION:  What would this funding crisis mean for our country hospitals?

BRIAN OWLER:     Well, it affects the hospitals right across the country. Now, already in New South Wales this week we know that our hospitals are struggling. We've seen recently figures released about the states and territories ability to meet NEAT and NEST targets, that is the targets for elective surgery and emergency department access times. And they're really falling away, despite the grounds that had been made with a focus on policy and funding for those targets previously, the performance is starting to drift away.

And in New South Wales this week we've seen Nepean yesterday talking about the ability of it to meet the demand for services, the fact that it's really having trouble meeting the demand. It really is in desperate need of funding. We've got Wagga Hospital, now it's great that we've built a new hospital in Wagga. But the problem is that, they've got 18 unfunded beds that the nurses just can't deliver services to, and they're saying ‘look, we can't staff these beds safely, we can't look after patients in these beds if they're unfunded, and unfortunately those beds may have to close’.

So the problem is, you know, you build a hospital, put the infrastructure in there, that's great. But the real issue is the recurrent funding, the funding that's needed to make sure that we actually staff our hospitals to make sure that we can actually afford to do the procedures that patients need, both in terms of elective surgery, but also other procedures such as emergency procedures as well.

QUESTION:  You mentioned that $6.7 billion between health and education would not be enough. How much are you looking for?

BRIAN OWLER:     Well, the commitment previously was $57 billion just for health over that ten year period, for health and education as you recall it's $80 billion. Now, one might argue that that was a commitment they may not have been able to have been met. But what I can say is that changing the formula for funding public hospitals to CPI and population growth is completely inadequate to maintain the level of services we have now in our public hospitals. So somewhere between the two there must be a reasonable figure. But, 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.

QUESTION:  Will the AMA be looking to make this an election issue? Are you prepared to fund a public campaign on this?

BRIAN OWLER:     Well, I think it is already an election issue. That is why attention is being paid to it. So, people understand that the health system has really been under attack over the past few years. The last election campaign, you may recall, there was very little discussion of health. But then we had the 2014 Budget, which put fair and square health in the spotlight.

We saw the co-payment announcements, we saw the freeze to the Medicare rebate, we've seen the cuts to public hospital funding, and other cuts as well, we've got pathology and diagnostic imaging cuts. Now, at the moment, the pathologists and diagnostic imaging people, the radiologists, have got material in all of their collection centres and radiology centres right around the country focusing on the fact that these cuts are being made, and that their patients are going to have to pay more out of their own pocket.

I think this is a live issue in this election campaign. I think the public understand that this Government has been trying to push the cost back to consumers, back to patients hip pockets, and we know that that is bad for health outcomes, because we know if patients don't have a test, if they don't access a service, if they don't fill a script, then that means they end up sicker and more unwell, more likely to end up in an emergency department in a more expensive public hospital system.

So, you know, it makes no sense in a policy way to just make these cuts arbitrarily. We need to make sure that we actually invest in health, that we prioritise health as a superior good, to recognise the value that having a healthy society has for making sure that we increase our productivity and adding to the economy. You know, if people are sick they can't work, they can't pay tax, they can't contribute to the economy, then we all end up paying.

QUESTION:  And when you said New South Wales hospitals were struggling this week, do you know any specific examples of where the system isn't working?

BRIAN OWLER:     Well, the two things that have been in the media have been the Nepean Hospital that was in the media yesterday, and again yesterday we saw some problems developing down in Wagga. So there are examples around the place. I mean, New South Wales is probably in a situation that's better than most other states and territories. We know that some of the smaller economies, particularly places like Tasmania, really struggle to meet services, and we've seen that through the [indistinct] targets- the smaller states and territories really struggle to meet their ability to fund hospital services, in particular. My other problem is, when a Federal Government pushes back responsibility to states and territories, it's those smaller states and territories that really struggle to keep up the level of services and so what we have then is inequity of access across the country, where it really depends on what State or Territory you might be living in, in terms of what your life expectancy might be, because the- depends on the health services that you might be able to access.

QUESTION:  Do you have any thoughts on what the tax department might do to solve this problem?

BRIAN OWLER:     Look, the AMA's job is not to advise on tax policy. But I think a case was made, whether it be through increasing the Medicare levy or increasing the GST, to have a tax that's hypothecated towards health. Now, that did have a level of support. I think if there are taxes that are being raised in that way, we know that the Treasurer wanted to give personal income tax cuts, but I think with the cuts that have already been made from the 2014 Budget, unless they've got some other way of restoring that funding, then I think that's something that needs to be examined as well.

QUESTION:  Can I ask you on another issue- the Legionnaires' outbreak in the city, how serious is it and how concerned [indistinct] be in that particular area?

BRIAN OWLER:     Well, the outbreak occurred somewhere between 27 February and 3 March, I believe. The incubation period is up to 10 days. Most cases present within about five or six days, so I think we're probably getting towards the end of that period. Legionnaires disease obviously can be fatal in patients that usually have a lot of other comorbidities or might have immune suppression to begin, with so those cases, more serious cases, are usually in very sick individuals to start with. Most cases can be treated, identified and treated, with antibiotic therapy so I think that's where we're up to at the moment. It's not something that's spread generally through person-to-person contact. It's something that's spread through usually a water mist that comes out of an air conditioning unit, and I understand that the New South Wales Health Department is following through to make sure that they've traced, obviously, the source of where they believe it's come from, and they've taken steps to alert GPs and hospitals to be aware of this potential infection. And so, people are on alert to make sure that we do identify cases.

QUESTION:  Were you satisfied then with the way that the Health Department and the Sydney Council has responded to them?

BRIAN OWLER:     Yeah, I think they've responded quickly, they've put out the alerts through the networks to GPs, so GPs were receiving faxes and emails to alert them to the condition, to be aware of it, and they've obviously identified the source, so I think they've taken all of the steps that are necessary to make sure that they've identified the problem, but also make sure that people are aware of the issue, and obviously put that message out through the public. So, if you do have those symptoms, a respiratory illness, fevers, sweats, cough et cetera, see your GP, but particularly if you're in that area around the Sydney Town Hall, that's something that people need to be aware of as well, and the disease can be diagnosed through chest x-ray and usually urine sample or a blood test as well.

QUESTION:  Just getting back to funding here, do you have particular concerns for country patients? Here in Sydney, if one hospital is busy there's the opportunity to go to another hospital, not necessarily the case in the country.

BRIAN OWLER:     Yeah look, I think smaller hospitals and regions are always at greater risk, and one the big problems is about workforce incapacity. We know that if you start to decrease funding you have staff that maybe, may leave. When that happens, it's very difficult to restore those services back again, even when you inject more funding, because those people obviously have systems that they've developed, personal relationships that they've developed, managing the hospital. And so, we've seen in smaller jurisdictions, when those cycles of boom and bust funding come along in health, they really have devastating consequences and I think the same argument can be made when you're dealing with rural or regional hospitals as well. So, I think the impacts are generally greater, and I think that's something that has to be recognised.

QUESTION:  When people talk to the Federal Government about funding, the Federal Government's response, is often, well, this is not money they're taking out, this is just funding that they're not now getting, so [indistinct] they're not actually taking money out, it's just less of an increase, and it's up to state governments to manage their public hospitals. How much probability do state governments have that [indistinct] what's their role in that [indistinct].

BRIAN OWLER:     Well most State governments fund their hospital system. It's about 30 per cent of most State budgets - some are greater, some are a little bit less. So states and territories, already contribute very significantly to the cost of health care. They have a vested interest in making sure that their hospitals run efficiently. But, I've got to say that there has been a tremendous amount of work that has already been done to try and get greater efficiencies through public hospital systems. Both through the activity based funding model that was developed, but also just through the organic process of doctors and nurses working hard in our public hospital system to decrease the length of stays, to keep people out of hospitals, to make sure that they do get greater efficiencies. I mean, when you look back and see what we do now for the same amount of money with what we used to do, say 10 years ago, I mean, it's really chalk and cheese. So, you know, this notion that ‘oh gosh, these guys need to suddenly start to find these efficiencies’, that is something that doctors and nurses are doing every single day. And to suggest that that's somewhere that hasn't been focused on in the past is just, I think, ignorant. So our hospitals are more efficient. Can they be even more efficient? Well, they probably can. But also, you need to make sure that you invest in hospitals to get them operating more efficiently as well. It doesn't just happen when you cut the money or cut the funding.

Now, this notion that no no, there are no cuts, I mean, it is word gymnastics essentially. Yes, there is an increase in funding, but the actual growth in funding is not going to keep pace with the costs- increase in costs associated with delivering health care. Now, in most states and territories the costs associated with staffing naturally increase at about 2.5 per cent per year; in fact, here in New South Wales, that's something that's regulated - all public sector personnel essentially have a wage growth that's regulated about 2 per cent. So, we already know that through the funding formula of the Federal Government, there is no way that they are going to keep pace with the cost- the rising costs of health.

Now, the rising costs of health come from not only things like staff costs, but also increased medical technology; new technology is usually more expensive, and new technology is a good thing, and keeps actually people healthier for longer. We're also a victim of our own success. We have an ageing population. That is because we are keeping people alive for longer, and they are living with more chronic diseases, and we are better at managing those chronic diseases, keeping people well and keeping people in the community. But they get sick occasionally, and they have to come to hospital and need treatment. Plus we have a growing population as well. So, when you add all of those things together, the cost of health care rises - in public hospitals at least - rises at least about 5 per cent per annum. Now this formula of the Commonwealth Government from 2017 on, CPI and population growth, is not going to come anywhere near that amount. So when you say yes, the costs- the funding is going up, yes, but completely inadequate rate to actually fund the cost of health care and maintain the services that we have already.

The only alternative for State and Territory governments is to look at the services they provide, and start to rationalise the services. That means they have to look at what outpatients clinics, for instance they run; do they invest in extra education programs, do they say, ‘look, we're not going to offer that service any more’, do they cut their operating lists so that they finish at three o'clock instead of six o'clock, as some hospitals already do? So then you have infrastructure sitting around that's completely unused. I mean, these sorts of cuts can be very devastating, not just for the workforce, but it actually creates inefficiencies, so I think we've got to get a bit smarter than just taking money out and saying, deal with it, as Joe Hockey did on the 2014 Budget night. You know, it's not just the responsibility of states and territories. The Commonwealth has a responsibility to make sure that it funds public hospitals to an adequate level, and that's something that it's not committed to at the present time.

Thank you.

10 March 2016

CONTACT: John Flannery                            02 6270 5477 / 0419 494 761

                     Kirsty Waterford                       02 6270 5464 / 0427 209 753

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