Sunday, April 11, 2010

Hospital Reform Driven Wrongly

According to a number of polls, most Australians support the Federal Government in its efforts to improve public hospitals. They support the concept of the Federal Government funding hospitals more directly. Prime Minister Rudd's offer is to withhold 30% of GST revenue from the states and use it, and other federal money, to more directly fund 60% of hospitals' costs.

A number of states, driven by Victorian Premier, John Brumby, have proposed a model of 50-50 funding. That's 50% from the Federal Government, 50% from the states. The Federal Government does not, under his plan, keep any of the GST money to fund hospitals, AND the states would receive the "bucket of money" for hospitals - well States' Treasuries would get the money! I think this has been much of the problem - states use too much of the money on bureaucracies to "manage" the public hospital system. Kevin Rudd's model of direct funding of more local hospital networks avoids some of the bureaucracies, and should give better value.

With state resistance building, Kevin Rudd has added a sweetener - $500 Million, over 4 years to cut hospital waiting times. Federal Health Minister Nicola Roxon has told the media that about one in three patients wait for more than eight hours in emergency wards for treatment. The "plan" is to cut that to less than 4 hours. Of the $500 M on offer, $150 M is on offer from 1 July this year. The sting is that hospitals have to cut the waiting time in ED's in half, BEFORE they get the extra $350 M! Yet in order to reduce waiting times, public hospitals need: more ED doctors, more nurses, more hospital beds (which require more nurses). With about 760 public hospitals throughout Australia, that $150 M represents about $200 000 per hospital, or perhaps 3 nurses for 1 year. That's just 1 extra nurse per shift.

The concept of more money for more "efficient" hospitals is NOT a suitable model of funding for something as important as health. Yes, hospitals need to improve, but to deny funding to a hospital because a political target is not met, is not appropriate.