Govt under pressure as hospitals stumble

Mounting evidence that public hospitals are struggling to make headway in meeting key performance benchmarks is increasing the pressure on the Federal Government to agree on a permanent boost to funding as part of any overhaul of Commonwealth-State health arrangements.

Australian Institute of Health and Welfare figures show that the performance of public hospitals is slipping back as massive funding cuts announced in the 2014-15 Federal Budget begin to bite.

The proportion of urgent emergency department patients receiving treatment within the recommended time fell back in 2014-15 from 70 per cent to 68 per cent – brining to an end six years of continuous improvement and leaving performance well short of the target of 80 per cent, which was due to be reached two years ago.

The goal for all emergency department visits to be completed within four hours, which was meant to be achieved this year, has also been missed.

The results bear out warnings made by the AMA earlier this year that the Commonwealth’s funding cuts for hospitals would undermine the delivery of care.

Launching the AMA’s annual Public Hospital Report Card in April, President Professor Brian Owler said the Federal Government’s cuts – amounting to $57 billion in the next 10 years – were creating “a huge black hole in public hospital funding”.

“It’s the perfect storm for our public hospital system,” he said. “There’s no way that states and territories can even maintain their current frontline clinical services under that sort of funding regime, let alone build any capacity we actually need to address the shortfalls now.”

Health Minister Sussan Ley rejected the warnings at the time, but the latest evidence of declining performance are likely to make it increasingly difficult for the Government to win State backing for an overhaul of funding arrangements without more money on the table.

Late last week the nation’s leaders were due to discuss a proposal by South Australian Premier Jay Weatherill to increase the goods and services tax to 15 per cent, with the proceeds to go to the Commonwealth. In exchange, the states would be given a guaranteed slice of income tax revenue.

Weak growth in consumer spending has undermined the flow of revenue to the states from the GST, making it increasingly difficult for them to fund fast-growing demand for public hospital services.

Mr Weatherill said giving states a slice of the faster-growing income tax take would enable them to keep funding health.

The states have been ramping up the pressure on the Commonwealth over the impact of its spending cuts.

Queensland Health Minister Cameron Dick told a meeting of the nation’s health ministers last month that the Coalition Government’s cuts would slash $11.8 billion from the State’s hospital system. The Victorian Government has calculated it stands to lose $17.7, while New South Wales has figured a $16.5 billion loss, South Australia $4.6 billion, Western Australia $4.8 billion and Tasmania $1.1 billion.

The big cuts form a challenging backdrop for discussions of reform to Federal-State relations that include proposals for Commonwealth public hospital funding to be replaced by a “hospital benefit payment” that would follow individuals, similar to Medicare.

Government discussions of changes to the private health insurance industry have included reference to option two in the Reform of the Federation Discussion Paper, which proposes a Medicare-style payment for hospital services, regardless of whether they are provided in the public or private system.

Under the arrangement, the price of hospital procedures would be set by an independent body and the Commonwealth would pay a proportion. For patients in the public system, the states would be expected to make up the difference, while in private hospitals the gap would be covered either by insurers or the patients themselves.

States would retain responsibility and operational control of public hospitals, and would be able to commission services from the private sector, while the Commonwealth would discontinue the private health insurance rebate.

Adrian Rollins

A step toward facilitating ethics review of human research in Australia

One of the main obstacles for Australian researchers applying for ethics approval of their research has been the absence of an application form that can deal equally well with all research and, more importantly, simplify the application and ethics review process. Such a form would enable the consideration of the critical ethical issues related to a proposed research project by both the applicant and the reviewing committee. A fresh perspective on the ethics application process has been requested both by applicants and ethics committee members.

The National Health and Medical Research Council (NHMRC) has sought to respond to this need through the development of a concise, streamlined application form, supported by a contemporary technology platform, to facilitate efficient and effective ethics review for all research involving humans. The development of this form — the Human Research Ethics Application (HREA) — is part of a suite of initiatives funded through government budget measures to streamline ethics approval processes.

Designed with a new structure and logic, and with sophisticated filters that generate questions specific to each application, the HREA will assist researchers to consider how the ethical principles and standards that apply to their research will be addressed. We anticipate that the new form will be welcomed by researchers and reviewers alike, and will lead to more efficient human research ethics review and approval.

The continuing engagement of the research community and the ethics committees that support the research is integral to the development of this application. The NHMRC will soon be seeking feedback on a preliminary version of the HREA (https://www.nhmrc.gov.au). An initial launch of the HREA is planned for early 2016.

Hospitals get just $1 more

The Federal Government spent just an extra $1 for each man, woman and child in the country on hospital funding in 2013-14 as it screwed down hard on its health budget.

As the nation’s leaders meet for the last Council of Australian Governments meeting of the year, figures compiled by the Australian Institute of Health and Welfare show that Commonwealth funding for hospitals reached $892 per person in 2013-14, which was a $132 increase from a decade earlier but just $1 more than in 2012-13.

The miserly increase has contributed to a big shift in the burden of hospital funding from the Commonwealth to the other levels of government.

In the 10 years to 2013-14, spending by the states, territories and local governments on hospitals grew at virtually double the rate of the Federal Government.

Over that time, they expended an extra $10.3 billion on hospitals, after inflation – a 69 per cent increase.

During the same period, the Commonwealth’s contribution grew by just $5.7 billion – a 38 per cent increase.

The result provides a sobering backdrop to the tax reform debate.

Weak growth in GST revenues in recent years has intensified the strain of health spending on State and Territory budgets, driving calls by premiers and chief ministers for access to a more dynamic revenue base. One proposal has been to push the GST to 15 per cent and direct the funds to the Commonwealth. In return, the states and territories would get a share of income tax revenue.

But the Commonwealth flagged it is not interested in increasing the GST and is instead pressuring the states to change their own tax mix.

At the same the Federal Government has been paring back on hospital funding, it has been pulling back on its share of primary health spending, which dropped to 36.7 per cent in 2013-14 from 37.3 per cent the previous year.

Instead, it has picked up its spending on other health goods and services, particularly referred medical services, and to a lesser extent research and health administration.

In the 10 years to 2013-14, Commonwealth spending on these services jumped from $11.6 billion to $19.3 billion – including $12.2 billion on referred medical services alone.

Indicating the increasing importance of this type of spending, in 2003-04, it was 8.4 percentage points lower than Commonwealth spending on hospitals. Ten years later, it was just 2.3 percentage points lower.

The figures underline AMA concerns that the Commonwealth is dumping an increasing share of the health funding burden onto the states and territories, intensifying the strain on public hospitals, which have already reported a downturn in performance.

The Commonwealth’s backsliding on primary health funding also lends weight to fears that the reviews it has initiated into primary care, particularly the MBS Review, are being driven by a cost-cutting agenda.

Adrian Rollins

PHNS must not be used to ration healthcare: AMA

The AMA this week released its Position Statement on Primary Health Networks (PHNs) 2015, which replaces the AMA Position Statement on Medicare Locals 2011.

AMA Vice President, Dr Stephen Parnis, said the AMA supports the need for an overarching structure of Primary Health Care Organisations (PHCOs) such as Medicare Locals or Primary Health Networks (PHNs), but they should not become agencies for rationing health funding or devolving the Federal Government’s core primary health care responsibilities.

“PHNs have an important role to play in improving the integration of health services within primary health care, enhancing the interface between primary care and hospitals, and ensuring health services are tailored to the needs of local communities,” Dr Parnis said.

“General practice must be at the heart of PHNs, and GPs must be heavily involved in the leadership and management of PHNs.

Dr Parnis said that the Government’s recent mental health reforms and some of the preliminary work of the Primary Health Care Advisory Group point to a bigger, more controversial, and potentially unwelcome role for PHNs in primary health care funding.

“There are worrying signs that the Government is ignoring the lessons of the failed Medicare Locals experiment as well as diverting significant amounts of Medicare funding to PHNs, potentially establishing new models of care for some population groups that could interfere in the GP clinical care role, restrict patient choice, and ration access to health services.

“It is also unclear from recent Government announcements whether or not PHNs will be used to fundhold for GP services. The Government needs to rule this out immediately.

“The Government must support patients to access GP-coordinated care, and dismiss proposals that undermine this long-established successful model of primary care.

“The PHN network is seriously underdeveloped nationally, and there is the potential, over time, for PHNs to divert money from patient care into bureaucracy and administration.

“The PHNs must not be used as a vehicle to cut funding for health care, or to allow the Government to avoid health care funding responsibility.”

This post was first published in GP Network News.