Public Hospitals - Cycle of Crisis

Chronic underfunding of public hospitals has led to declining performance, putting lives at risk. In the first half of 2021, we have heard stories of people dying waiting to be seen in public hospitals that are operating at breaking point, and ambulance ramping outside public hospitals because there aren’t enough beds and staff to cope with demand.

There are both human and financial costs to our public hospitals operating in crisis mode. Access block and emergency department (ED) overcrowding appear to be getting worse, and this is associated with increased mortality, morbidity and length of hospital stay.

The AMA has been calling out the declining performance of public hospitals for several years. The 2020 AMA Public Hospital Report Card showed that performance is stagnant or declining across all five areas covered in the Report Card. Patients are waiting longer for ED treatment and elective surgery, and the number of available hospital beds per 1,000 people aged ≥65 years – an important measure of public hospital capacity – has been in a trend of decline for decades.

Without reform, public hospital performance will only get worse as demand increases. Australia’s population is growing and ageing, and the burden of chronic and complex disease is increasing. ED presentations are also increasing, as is the urgency of treatment required when patients arrive at the ED. Meanwhile, public hospital finances are being squeezed, as cost growth (inflation) plus demand growth for public hospital services is expected to exceed government funding growth (AMA projection).

The AMA’s vision is for a new funding approach to supplement the current focus on activity-based funding – one that includes funding for positive improvement, increased capacity, and reduced demand, and puts an end to the blame game. While broader reform is needed in the long term, the AMA is calling for targeted reforms that are needed right now to stem the public hospital crisis. 

Our public hospitals need funding to buy extra beds and staff them, and to focus on improving their performance. Funding is also needed for alternative out-of-hospital care, so that people whose needs can be better met in the community, can be treated outside hospital. This is what is needed now to steer public hospitals out of crisis mode.