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Hospitals lose another $1 billion in Commonwealth surgical strike


The Federal Government has slashed a further almost $1 billion from public hospital funding as part of savings outlined in its mid-year Budget update.

The Independent Hospital Pricing Authority has estimated that price growth for hospital services will be lower than previously forecast, saving the Commonwealth $941 million over four years to 2017-18.

The downward revision reflects lower than expected National Efficient Price projections, partly offset by expectations of increased hospital activity, and comes in addition to massive cuts detailed in the May Budget.

In the Budget, the Government announced it would save $1.8 billion between 2014-15 and 2017-18 by walking away from its public hospital funding guarantees, and would save an additional $16.4 billion over five years by scrapping its National Health Reform Agreement commitments. It will also save hundreds of millions of dollars each year by dumping the efficient growth dividend payments that were due to kick in from 2017-18.

The huge cuts to Commonwealth hospital funding have angered State and Territory governments, and have raised doubts about the ability of public hospitals to reach performance targets set out under the NHRA, including cutting waiting lists for elective surgery and boosting emergency department treatment times.

A recent Australian Institute of Health and Welfare report showed that public hospitals continue to fall well short of agreed performance benchmarks, despite improvements.

It found that 73 per cent of emergency department patients were admitted, referred or discharged in four hours or less in 2013-14, up from 64 per cent in 2011-12, but far short of the 90 per cent target set for 2015 by governments under the National Partnership Agreement.

While the National Emergency Access Target is expressed in terms of calendar, rather financial, years, the results underline warnings from the AMA earlier this year that recent improvements in emergency department performance were being put at risk by Commonwealth finding cuts, and that hospitals would struggle to reach the national performance benchmark.

The Commonwealth cutbacks come despite relentless growth in demand for public hospital services.

There were almost 7.2 million presentations to public hospital emergency departments in 2013-14, a 7 per cent jump from the previous year, and equivalent to almost 20,000 presentations a day.

The health system’s ability to respond effectively to medical emergencies was demonstrated by the fact that virtually 100 per cent of patients in need of resuscitation received immediate treatment, while 82 per cent of emergency patients were cared for within 10 minutes.

But this responsiveness has come at a cost for patients with health problems that demand less immediate attention – less than three-quarters of urgent and semi-urgent cases were seen on time.

Adrian Rollins