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Hospital funding becomes mired in blame game once more

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The Abbott Government’s “unconscionable” decision to slash future contributions to public hospital funding has reignited the wasteful Federal-State blame game and will cut treatment to thousands of patients, the AMA National Conference was told.

In one of his last speeches as AMA President Dr Steve Hambleton lamented that the Commonwealth’s Budget decision to walk away from hospital funding guarantees to the states and change the indexation of future contributions had delivered a major set-back to efforts to end the political tug of war over public hospital financing and would lead to much fewer additional hospital beds than had been planned.

Dr Hambleton said that during his five years as AMA Vice President and then President, policy over public hospital funding had gone virtually full circle, from the familiar Commonwealth-State stand-off to “an attempt to implement the AMA plan for a single funder…to an unconscionable abrogation of responsibility to the public hospital sector”.

“The Commonwealth Government has used a very blunt instrument to deal with [forecasts of growth in hospital expenditure], and in what appears to be a very brutal way for the states and territories,” the former AMA President said.

No more hospital funding guarantees

In the Budget, the Federal Government disavowed public hospital funding guarantees made under the National Health Reform Agreement 2011 and scaled back indexation of its contributions from mid-2017 to the consumer price index and population growth rather than the efficient growth dividend.

AMA analysis shows that the combined effect of these measures will be to strip $20 billion from public hospitals over the next five years.

At an emergency meeting held in the aftermath of the Budget, all State and Territory leaders (except WA Premier Colin Barnett) declared that the Commonwealth’s unilateral termination of hospital funding agreements was unacceptable, and warned that, as a result, funding for 1200 extra hospital beds would be axed and there would be an annual $300 million a year cut in concessions for pensioners and seniors.

But Health Minister Peter Dutton told the AMA National Conference that much of the commentary on the Budget decision was “dead wrong”.

“We are not reducing funding for public hospitals,” Mr Dutton said, pointing out that the Commonwealth’s contribution would grow by 9 per cent a year in the next three years before scaling back to 6.5 per cent annual growth from 2017.

“What we will not be doing, unlike the previous Government, is providing open-ended funding guarantees for inefficient and unrestrained growth,” he said.

“Hospitals,” Mr Dutton said, “are the responsibility of the states and territories”.

New AMA President Associate Professor Brian Owler said that although Mr Dutton was correct to say the Commonwealth’s contribution to public hospitals was increasing, “it’s a reduction from the funding that they agreed to put into the health system under the National Health Reform Agreement”.

A/Professor Owler, a neurosurgeon at the Children’s Hospital at Westmead, Sydney, told the Australian Financial Review that “it’s one thing to say it’s the states’ problem and push it back to the states, but at the end of the day it is about patients, their health care, and if the states don’t have the ability to fund it, then front line medical services are going to suffer”. 

Dr Hambleton said the Commonwealth’s decision had derailed hopes for a concerted national effort on health reform, and instead the country would be plunged into yet another debate on tax transfers and the adequacy of the GST.

“The battles over public hospital funding appear to be never ending,” he said. “The nation cannot afford for public hospitals to be used as pawns in political battles over sovereignty and reform of the Federation. [They] need certainty of funding arrangements to plan for and deliver services.”

Emergency department access

As part of its plans to introduce a Medicare co-payment, the Federal Government has relaxed rules to allow public hospital emergency departments to charge a co-payment for patients presenting with ‘GP-like’ health complaints – a measure deemed necessary to prevent patients trying to dodging the GP co-payment from clogging public hospitals EDs.

But Newly-elected AMA Vice President and emergency physician Dr Stephen Parnis said there were serious practical and ethical issues around implementing such a charge.

“In emergency departments, we treat people according to medical need,” Dr Parnis said. “We would hate to see people not seek emergency treatment when they needed it.”

He said the idea of trying to assess patients for the seriousness of their conditions when they arrived at emergency departments would be too hard to implement: “The only way you can really assess whether or not someone is an emergency case is once you have treated them”.

Adrian Rollins