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Reducing elective surgery waiting times - is more money the answer?

Performance of public hospitals is rarely out of the news. Attention is often focussed on elective surgery waiting times or episodes of poor care. Recently there have been reports of ward closures in Victoria and the Tasmanian government has announced cuts to elective surgery in an attempt to balance the budget. Likewise, funding arrangements for hospitals are guaranteed to generate community debate, with more, not less, funding often proposed as the answer.

The most recent COAG Reform Council Progress Report presents a sobering, if not contradictory, view of public hospitals in Australia. This report is a high level examination of implementation of the Government’s reform agenda across a range of measures through COAG and National Partnerships Agreements. For hospitals, the report considered changes to hospital funding arrangements including the implementation of the activity based funding arrangements (ABF) and elective surgery waiting times. It also reflects on whether key reform indicators are being met and if progress is being made on key performance indicators.

For hospital funding arrangements, the report concludes that ‘reforms to funding public hospitals are complete’. This perhaps is premature as one of the key components of hospital reform, the Independent Hospital Pricing Authority (IHPA), has not yet been established. Legislation to establish the IHPA is due to be debated next week. In the meantime, the Government has established an interim IHPA and has appointed an interim CEO.

The IHPA will determine the ‘nationally efficient price’ of public hospital services which will be used to determine the Commonwealth’s contribution to hospital funding. States and Territory governments will not be obliged to pay the efficient price but will negotiate with each Local Hospital Network about the price paid for each procedure. The IHPA will also be responsible for advising Government on which type of funding would be used for hospitals— ABF, block funding or a combination of both. It will also advise on cross-border disputes and regional loadings (see here for further detail about the functions of the IHPA). Work has commenced on the initial determination of efficient pricing and associated payment rules but nothing has yet been publicly released. Funding for public hospitals on the basis of ABF will not commence until 1 July 2012.

One of the key promises of the Rudd Government’s health reform agenda was to reduce waiting times for public hospital emergency departments and elective surgery. In 2008, it committed $600 million to the Elective Surgery Waiting List Reduction Plan (ESWLRP). There were three stages to the plan: stage one focussed on the immediate reduction of patients on waiting lists, stage two provided money for investment in infrastructure to improve elective surgery in the future and stage three was aimed at reducing the number of ‘long wait’ patients and improving overall efficiency of public hospitals. The plan applied up to 2010; the recently agreed National Partnership on Improving Public Hospital Services builds on this.

Results from the ESWLRP are mixed. While the total volume of elective surgery under the plan exceeded expectations (41 584 operations were completed against a target of 25 278), the number of ‘long wait’ patients actually increased over the period 2007–08 to 2009–10. This means that while some patients were seen within clinically recommended times, the number of people who waited for significant periods of time continued to increase. There is insufficient detail in the data to determine why this occurred; and it is likely that there is significant variation across (and within) states and territories and surgical specialities. The data may not also reflect current waiting times - some States (for example WA) have more up-to-date information publicly available.

The COAG Reform Council concluded that apart from additional elective surgery procedures, it was not possible to determine what activities were undertaken by jurisdictions in ‘seeking to achieve the targets under the National Partnership Agreement’. One of the Stage three targets is improved management of elective surgery waiting lists. This is measured by a reduction of ‘long wait’ patients as well as the number of patients who are seen within the clinically recommended time by urgency category and the number of patients who have waited for longer that is clinically necessary.

Under the ESWLRP, states and territories are rewarded for achieving targets under each stage. When the performance payments for Stage three were announced, only three states qualified for the full amount of reward funding (NSW, QLD and VIC). The remaining states received partial payments. Clearly, it will take some time before there is national consistency on the management of elective surgery waiting lists.

The new National Partnership Agreement on Improving Public Hospital Services has two main objectives for elective surgery: increasing the number of patients seen within clinically recommended times and the progressive reduction of long wait patients. Funding of up to $650 million is available with up to $200 million in reward funding. As with the previous Agreement defined targets have been set. Minister Roxon has been clear about improving the accountability of hospital financing and this Agreement goes some way towards ensuring this, despite concerns about the appropriateness of using waiting lists as the sole measure of performance.

Broader questions of health financing and hospital funding remain. As the COAG Reform Council Report has shown, more money doesn’t necessarily solve all the problems. Questions about how much funding is enough and the best way to reduce preventable hospital admissions persist. And how can underperforming states be best supported? Tasmania is likely to face significant challenges in meeting elective surgery targets into the future with its recent ban on elective surgery. Waiting times for public hospitals is a perennial issue and one that is unlikely to go away despite additional investment from the Commonwealth.