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No early relief for cash-strapped hospitals

Hopes of short-term funding relief for the nation’s cash-strapped public hospitals have been dashed following a decision of the nation’s political leaders to defer discussions on the issue to a special retreat to be held in July.

In a sign that there will be little new spending on public hospitals in next month’s federal Budget, Prime Minister Tony Abbott has convinced his State and Territory counterparts to delay talks on health financing for consideration as part of proposals to reform the Federation.

AMA President Associate Professor Brian Owler said that, although doctors would have preferred the meeting to have reached an agreement on hospital funding, the fact that it would be on the agendas of the COAG leader’s retreat was welcome.

Mr Abbott said the country needed to take a “very holistic look” at the way it funded public hospitals to ensure “we get the best possible value for our dollar, because we’re under pressure”.

“Sure, the states and territories are under pressure for their hospital funding, but we’re under pressure for our tax take,” the Prime Minister said. “No-one is volunteering to pay more tax. So, we need to handle this in a way which acknowledges the need for ever-better health services, but which also appreciates that resources are not unlimited, and that’s what we want to be able to discuss in an honest and candid and collegial way as part of the leaders retreat later on in July.”

Treasury figures show the Federal Government’s decision to walk away from National Health Reform Agreement funding guarantees and cut the indexation rate of future contributions will rip $57 billion out of the public hospital system in the next 10 years.

The massive funding cuts are due to hit a system already showing signs of strain.

The AMA’s Public Hospital Report Card, released a day before Mr Abbott met with the nation’s premiers and chief ministers, showed that elective surgery waiting times remain stubbornly high (for the fourth year in a row the national median waiting time in 2013-14 was 36 days), admission delays remain unsatisfactory and the proportion of beds per population is shrinking.

A/Professor Owler warned the looming funding cuts would create “a perfect storm” for public hospitals already struggling to cope, and would cause patient waiting times to blow out.

“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,” he said. “Funding is clearly inadequate to achieve the capacity needed to meet the demands being placed on public hospitals.”

The issue threatened to dominate the Council of Australian Governments meeting on 17 April after NSW Premier Mike Baird led a chorus of complaints from State and Territory leaders about the Commonwealth’s funding cutbacks.

But, following the meeting, Mr Baird said the fact that it would now be considered in the context of broader federal-state relations was “a tremendous step”.

“This is not just an individual state issue, it’s not a Commonwealth government issue – we have to do it together,” Mr Baird said. “It is a huge challenge. It is the number one challenge to our finances – full stop. Commonwealth and state.”

Setting the tone for discussions, Mr Abbott made it clear that, while acknowledging the increased financial pressure on the states, the Commonwealth would not be putting more money on the table.

“I accept that, with public hospitals in particular, there are a lot of cost pressures, I absolutely accept that,” the Prime Minister said. “I’m a former Health Minister, I know all about the health rate of inflation, [that it] tends to exceed the general rate of inflation because all the time we’re coming up new and better treatments which are very expensive.”

In the absence of more money, focus is turning to identifying further savings and efficiencies in the way the health system is managed and care is provided.

Mr Abbott said that although this would include examining funding arrangements, more importantly it must also involve overhauling “the structures” to achieve greater efficiencies.

Mr Baird said that “the only way we can deal with it is come together, and what we need to do…is look at the roles and responsibility; can we do it better, can we do it smarter, take away duplication, and can we make sure that we have got the funding to continue to deliver the health care services we do and, importantly, it has to be patient focussed.”

Adrian Rollins