Is $325 million enough for Tasmania's health care system?

 Last week, after much speculation, the Federal Government announced that it would provide an extra $325 million over four years to Tasmania’s health care system. Previously the Tasmanian Government had announced cuts of up to $500 million over four years to the health care system, commencing from 1 July 2011. Many of these cuts were directed to elective surgery, reduced services and the closure of hospital beds. The most recent Tasmanian budget (May 2012) announced a reduction of the savings target by $120 million.

Of the $325 million, only $31.2 million will be directed towards elective surgery with the majority of funding to be spent on better care in the community, improved discharge care and training of medical specialists and more scholarships for nurses and allied health professionals.

Additional health funding for Tasmania (millions)
$31.2 Elective surgery (around 2600 operation with a focus on long wait patients such as orthopaedic and cataract surgery)
Around $22Establishment of walk-in clinics in Hobart and Launceston to provide basic care for minor illnesses and injuries at no cost
$48.7 (over 4 years)Improved care in the community to prevent and manage chronic disease through coordination of care with allied and preventive health services. This will be undertaken by the Tasmanian Medicare Local
$74.5 (over 4 years)Better care for patients when they are discharged and better palliative care in the community
$53.9 (over 4 years)Training for additional medical specialists and the provision of more scholarships for nurses and allied health professionals
$15.4 (over 4 years)To address gaps in mental health services
$36.8 (over 4 years)Roll out of the Personally Controlled Electronic Health Record in Tasmanian hospitals and the enabling of allied health, pathology and diagnostic imaging services to connect to eHealth
$42.0 (over 4 years)To support innovation in clinical services to improve the efficiency and effectiveness of the delivery of care. This includes $1 million towards the establishment of the ‘Virtual Health Sciences Precinct’ which brings together hospitals, universities, research institutes and primary care providers

Whether this will have an impact on the Tasmanian health care system remains to be seen. Many of these initiatives are not readily measurable, for example, improved care in the community to manage chronic disease and better care for patients when they are discharged. Despite this, the Federal Government has required the Tasmanian Government to report monthly on how it spends any of the components of package it delivers, and what services it provides. The Federal Government also sought a guarantee that the Tasmanian Government will not undertake any more cuts to the health care system. A Commission on Tasmanian Government Delivery of Health Services will also be established to examine the effectiveness and efficiency of the delivery of health care by the Tasmanian Government.

The problems facing the Tasmanian health care system are not new. Successive Council of Australian Government (COAG) Reform Council reports have documented the performance of the Tasmanian health care system. Tasmania had the second longest waiting times for elective surgery in 2010-11 (359 days), although this was shorter than the baseline year (369 days). Tasmania was the only jurisdiction not to improve the waiting times in emergency departments for triage category 2 for the period 2007-08 to 2010-11. Tasmania qualified only for 80% of the reward funding under the Elective Surgery Waiting List Reduction Plan as it focussed on low cost, high volume operations (such as cataracts) rather than tackling more complex procedures and reducing the number of people who had been waiting for a long time. Affordability of health care is also a key issue in Tasmania and the number of people who delayed or did not see a GP due to cost increased from around 5% in 2009-10 to 11% in 2010-11.

The election of the Rudd-Gillard government heralded additional Commonwealth funding for health care through an increase of one billion in 2007-08 and various National Partnership Agreements in Health. As part of the negotiations for national health reform, an additional $16.4 billion (across all State and Territories over five years) was secured to account for the growth in public hospital expenditure. The extra money came with accountability and transparency requirements but, as noted by the COAG Reform Council its 2010 report, the current reporting framework does not facilitate this.

Yet additional money, or increased reporting requirements, is not likely to solve the underlying problems of Tasmania’s health care system. As noted by Martyn Goddard, a consumer health advocate in Tasmania, expenditure by the Tasmanian Government on public hospitals rose year on year by an average of 11% from 2002-01 to 2009-10. Other government expenditure rose on average by around 5.7% and total government revenue only increased by 6.1%.

Hospital costs in Tasmania are the highest in the country (see Table 3.15 of Australia’s Hospital Statistics 2010-11), although there are limitations to this data. These costs may be explained by longer stays in hospital (compared to the Australian average), discharge planning processes and organisational culture. On average, Tasmanians have poorer health and health outcomes than most Australians and this may also contribute to increased hospital costs.

What then is the solution? Martyn Goddard has proposed a federal takeover of the Tasmanian health care system with day to day administration of the system at the local level. This has been dismissed by Minister Plibersek. The Tasmanian Greens have proposed a trial of a ‘single funder’ model but it not clear who the single funder will be. The Federal Parliament has recently passed a Bill which will enable greater transparency of public hospital funding but this does not address the underlying structural issues of the Tasmanian health care system or the challenges associated with the Federation. Reform of Commonwealth-State relations is unlikely to ‘fix’ all the problems of the health care system but clarification of the roles and responsibilities is likely to improve accountability. For Tasmania, and the thousands of patients waiting for elective surgery, the money and (potential) improvements to the health care system can’t come quick enough.


Flagpost is a blog on current issues of interest to members of the Australian Parliament

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