AMA warns of public hospital ‘perfect storm’ as Commonwealth funding decreases and benchmarks are not met
AMA Public Hospital Report Card 2015
The AMA is warning of a possible ‘perfect storm’ in Australia’s public hospital system as Commonwealth funding shrinks, performance benchmarks are not being met, and prices for hospital services under activity-based funding decline.
Releasing the AMA Public Hospital Report Card 2015 in Sydney today, AMA President, A/Prof Brian Owler, said that, despite some small improvements, the public hospital system is not meeting the clinical demands being placed on it, and the situation will only get worse as real Commonwealth funding reduces dramatically in coming years.
A/Prof Owler said that the bleak outlook for public hospitals must be a priority for discussion at tomorrow’s COAG meeting in Canberra and Health Ministers meeting in Sydney, and the Federal Government should be looking at restoring public hospital funding in the May Budget.
“The States and Territories are facing a huge ‘black hole’ in public hospital funding after a succession of Commonwealth cuts,” A/Prof Owler said.
“The Federal Government cut $1.8 billion in May in the 2014-15 Budget by ceasing funding guarantees under the National Health Reform Agreement.
“There was a further $941 million funding reduction to the States in the Mid-Year Economic and Fiscal Outlook (MYEFO) in December.
“On top of this, the Government scrapped the National Partnership Agreement funding to the States, which rewarded performance in meeting waiting time targets for emergency departments and elective surgery.
“The enormity of the ongoing cuts was starkly highlighted when the Treasury advised the Senate Economics Committee that Commonwealth funding for public hospitals from 2017-18 to 2024-25 would be reduced by $57 billion.
“Public hospital funding will be the biggest single challenge facing State and Territory finances for the foreseeable future.
“The hospital funding blame game is back, and bigger than ever. Public hospitals and their staff will be placed under enormous stress and pressure, and patients will be forced to wait longer for their treatment and care,” A/Prof Owler said.
The AMA Report Card shows only marginal improvement in public hospital performance against the performance benchmarks set by all Governments, with no State or Territory meeting the target of 80 per cent of emergency department Category 3 urgent patients being seen within clinically recommended triage times.
A/Prof Owler said that public hospitals must have the capacity to provide treatment efficiently and effectively to people needing acute care.
“Unfortunately, instead of putting the public hospital sector on a sustainable footing for the future, the Federal Government has retreated from its responsibilities in regards to public hospital funding arrangements with the States,” A/Prof Owler said.
“Rather than funding the necessary hospital capacity, the Commonwealth has withdrawn from its commitment to sustainable public hospital funding and its responsibility to meet an equal share of growth in public hospital costs.
“Funding is clearly inadequate to achieve the capacity needed to meet the demands being placed on public hospitals.
“To make matters worse, the price for hospital services under activity-based funding will be lower in 2015-16, at $4,971 than the price in 2014-15, at $5007.
“A perfect storm is building ahead of new Commonwealth public hospital funding arrangements based on indexation and population growth, which will take effect from 2017-18.
“These new arrangements will be imposed on a system already struggling with insufficient capacity, a system that is under-performing against key benchmarks, a system with inadequate and reducing Commonwealth funding, and a system with a reduced price for hospital activity.
“This will lock in a totally inadequate base from which to index future funding for public hospitals.
“State and Territory Governments, many of which are already under enormous economic pressures, will be left with much greater responsibility for funding public hospital services.
“Performance against benchmarks will worsen and patients will suffer. Waiting lists will blow out.
“It is vital that all governments come together to produce an agreed plan to fund public hospitals to sufficient capacity to meet growing demand.
“The Federal Government should also be using the Federation White Paper to address the public hospital funding crisis.”
A/Prof Owler said the Government cannot justify reducing public hospital funding on claims that Australia’s health spending is unsustainable.
“Australia’s health financing arrangements are not in crisis,” A/Prof Owler said.
“Compared with OECD countries, Australia’s expenditure on health is sustainable. In 2012-13, Australia had the lowest growth (1.5 per cent) in total health expenditure since the Government began reporting it in the mid-1980s.
“Without any specific Government measures, there was negative growth (minus 2.2 per cent) in Commonwealth funding of public hospitals in 2012-13, and only 1.9 per cent growth in 2011-12.
“Australia’s expenditure on health has been stable as a share of GDP, growing only one per cent over the last 10 years.”
Key findings of the AMA Public Hospital Report Card 2015 include:
- bed numbers per 1000 of the 65 and over population (at 17.5), and as a ratio per 1000 of the general population (at 2.57), have declined since 2011-12 (from 18.6 and 2.6 respectively). We have maintained roughly the same bed to population numbers over recent years, while there has been increasing demand for hospital services;
- most States and Territories performed well below the target of 80 per cent for emergency department patients seen within clinically recommended times;
- nationally, only 70 per cent of emergency department patients classified as urgent were seen within the recommended 30 minutes. This is a small improvement over 2012-13. If this rate of improvement were to continue, we could be on track to achieve the 80 per cent target in 2018, six years later than intended;
- in 2013-14, only 73 per cent of all emergency department visits were completed in four hours or less (the 2015 target is 90 per cent);
- for calendar year 2013, no State or Territory met the interim National Emergency Access Target. Performance in Victoria, Tasmania, South Australia, the Northern Territory, and the ACT was below their 2012 targets, with the Northern Territory performance in 2013 failing to meet their baseline for this target;
- nationally, median waiting times for elective surgery have increased over the last 10 years. In 2013-14, the national median waiting time remained unchanged at 36 days, meaning no improvement since 2010-11;
- the number of admissions from waiting lists for public hospital elective surgeries in 2013-14 across Australia was 699,023. This was an increase of around 4.2 per cent over the number of elective surgery admissions in 2012-13 (671,033);
- 2.4 per cent or 16,777 of the patients admitted for elective surgery in 2013-14 waited for more than a year;
- data for 2013-14 indicates 79 per cent of elective surgery category 2 patients (those who should be admitted within 90 days) were admitted on time. This is well below the National Emergency Surgery Target (NEST) performance benchmark of 100 per cent set by COAG. There has been no sustained improvement in waiting times for Category 2 patients since 2002-03;
- Commonwealth funding for public hospitals for the years 2013-14 to 2016-17 was reduced by $1.8 billion in the Budget 2014-15 (May 2014). The effects of this reduction will be compounded by the further reduction of $941 million announced in MYEFO 2014-15.
The AMA Public Hospital Report Card presents core information simply and clearly, to show the trend in performance over time. The AMA Public Hospital Report Card 2015 has been compiled using information from:
- Australian Institute of Health and Welfare, Australian Hospital Statistics 2012-13; Admitted Patient Care 2013-14: Australian Hospital Statistics; Australian Hospital Statistics 2013-14: emergency department care; Australian Hospital Statistics 2013-14: elective surgery waiting times; Health Expenditure Australia 2011-12 and 2012-13.
- Commonwealth Budget documents, Budget Paper No. 3 2013-14 and 2014-15; and Mid-Year Economic and Fiscal Outlook (MYEFO) 2012-13, 2013-14, and 2014-15.
- Council of Australian Governments (COAG) Reform Council, National Partnership Agreement on Improving Public Hospital Services: Performance Report for 2013 (NEAT and NEST targets).
16 April 2015
CONTACT: John Flannery 02 6270 5477 / 0419 494 761
Odette Visser 02 6270 5412 / 0427 209 753
Published: 16 Apr 2015