Here it is, exposed, the financial shame that reveals the extent of the ACT government’s financial neglect that has led to today’s deadly crisis in the hospital system. JON STANHOPE & Khalid Ahmed Follow what happened when Andrew Barr and Shane Rattenbury cut hospital spending in 2015 – and the years the ACT was the only jurisdiction in Australia to cut healthcare spending.
THE recent unspeakably sad death of two children attending the Emergency Department of Canberra Hospital has brought renewed focus to the state of our public health system.
We have written several times over the past few years about what we have described as the “crisis” in Canberra’s healthcare system.
We have attributed the central cause of this “crisis” to ongoing and sustained real cuts in health care funding and a concomitant shift in health care funding policies.
For example, between 2015-16 and 2018-19, emergency department visits in Canberra that resulted in hospitalization increased by an average of 2.5 percent per year, while spending was reduced by 2.5 percent annually. Nationally, such presentations grew 3.5 percent annually, while spending increased 4.8 percent annually. The ACT was the only jurisdiction in Australia to cut spending.
The funding constraint wasn’t limited to emergency rooms, however. Over the past decade there has been a significant change in the ACT government’s priorities and a concomitant shift in health care funding policies. The changes become clear, for example, by examining the number of beds in our public hospitals (Diagram 1).
The change in funding policy coincided with the retirement of then Chief Minister and Health Secretary Katy Gallagher in late 2014 before moving to the Senate.
Gallagher, consistent with a 2011 Cabinet decision, had approved and fully implemented an investment plan that included a $2.8 billion investment in the ACT’s healthcare infrastructure, including $1.3 billion in redevelopment of the Campus of the Canberra Hospital, the implementation conscientiously follows the plan.
Notably, by 2015, the supply of public hospital beds has increased in line with demand forecasts and actual hospital disconnects. Similarly, in real terms, recurring healthcare expenditure increased faster than population growth. In other words, subsidy policies during this period (taking into account inflation) ensured population growth as well as increased demand.
However, as of 2015, under the leadership of Andrew Barr and Shane Rattenbury, the hospital redevelopment was scaled back to less than half of the original plan and then postponed, with the bed supply remaining essentially unchanged over a three-year period. Amazingly, the number of beds fell in 2017-18 despite continued population growth and demand for services growing faster than population growth.
Table 1 details the population growth and demand measured by hospital separations in the two respective periods, i.e. before and after the decision to abandon the capital asset development plan.
Notably, the Productivity Commission reports that real recurring expenditures for public hospitals in the ACT declined 1.6 percent annually over the period 2015-16 to 2018-19.
We previously found that if the ACT government had simply maintained per-person health care spending at 2015-16 levels, public hospital services would have received approximately $175 million more in real terms in ACT 2018-19 than the Fall.
Similarly, if health spending in the ACT had increased at the same rate as the national average, the additional funds this year would have been $238 million.
While increases in healthcare spending in 2019-20 and the following year have brought healthcare spending growth into positive territory, it still remains scandalously lower than any other Australian jurisdiction (Diagram 2).
Source: Australian Institute for Health and Welfare.
In the four-year period in which healthcare spending grew by 1.4 percent in real terms, the population grew by 2.4 percent a year, according to ABS. In other words, per-person health funding in the ACT is now lower than it was seven years ago.
The impact of continued funding cuts has been severe. The emergency department’s performance in treating patients on time, once better than the national average, is now the worst in Australia.
Likewise, overall wait times for elective surgeries are among the worst in the nation. It goes without saying that low- and middle-income households, particularly those without private health insurance, are disproportionately affected by underfunding of health care.
The most regressive aspect of the government’s adopted health policy is the discrepancy between access and treatment times for Aboriginal and non-Indigenous Canberrans. 2020/21, the 90thth The percentage waiting time for elective surgery was 52 days longer for an Indigenous person than for a non-Indigenous person.
On one level, it is remarkable that the ACT’s hospital system continues to function as well as it has done, and we all owe a debt of gratitude to the dedication, perseverance and professionalism of its staff, while acknowledging the unacceptable costs that have been imposed on them pay.
Regrettably, the 2022-23 budget signals that the government is determined to maintain the status quo.
It is important to note that the budget estimates are nominal and not expressed in real terms, ie not adjusted for inflation.
The economic parameters underlying the 2022-23 Budget, as described on page 8, show that the wage price index will remain above 3 percent over the estimation period and the consumer price index will remain above while falling from 3.75 percent in 2022-23 2 percent in recent years.
By adjusting budget estimates for staff wage cost increases and consumer prices for non-salary spending, the most recent ACT budget reflects a real reduction in health care spending before considering population or population increases. Demand for health services.
Of particular note is the nominally flat spending profile (0.4 per cent annual growth) for community mental health services. Given the regular underscoring of the lack of services and care options for the mentally ill by clinicians, service providers and the families of loved ones with mental health problems, we would have thought that this level of funding was unsustainable.
During the hearings of the Special Committee on Estimates, when asked by Opposition Leader Elizabeth Lee about the small growth in spending entering the budget, Treasurer Andrew Barr stated that the budget base for 2021-22 was inflated due to one-off Covid-related spending, and that the actual Growth (presumably when such temporary expenses are removed from the base) was higher.
While Ms. Lee’s question related to total household spending, it nevertheless raises an important question, most pertinently in relation to the healthcare budget. Namely, can the Treasurer advise which expenditures were temporary in the 2021-22 health care allocation and whether they have been discontinued?
Jon Stanhope is a former Chief Minister of the ACT and Dr. Khalid Ahmed a former senior ACT finance official.
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