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COAG's public hostpital funding deal a welcome stop gap, but long-term solution still needed

April 2016

Australia’s largest non-government provider of public hospitals has characterised COAG’s $2.9 billion deal on public hospital funding as welcome “short-term relief” but has urged a substantial, fair and long-term solution is still needed.

St Vincent’s Health Australia (SVHA) – which operates St Vincent’s public hospitals in Sydney and Melbourne – said the Commonwealth and states needed to strive harder to permanently end funding uncertainty in the sector.

“Even if it is stop gap funding; even if it doesn’t reflect a full reversal of the 2014 Budget cuts, today’s announcement is still better than having public hospitals disappear over a fiscal cliff in 2017 – which was the alternative,” said SVHA’s CEO, Toby Hall.

“It’s explicit recognition by the Commonwealth that its previous position on public hospital funding – which it’s held for the last two years – was unsustainable and unfair.

“It’s also recognition that without the necessary funds, public hospitals would have had no choice but to ration staff, beds and procedures, meaning longer waiting times and poorer health outcomes.

“And it would have been low income and marginalised Australians worst-affected because they carry a higher burden of disease and have a greater reliance on public health care.

“While I’m frustrated we’ve wasted two years debating an untenable policy, I’m at least glad the Commonwealth has returned to the negotiating table.

“It’s important having the Commonwealth re-engaged because it means they continue to have a financial stake in reducing preventable hospital admissions. This is critical because the Commonwealth controls a number of the key levers that can help achieve this goal – particularly primary care, pharmaceuticals and aged care.

“But while we’ve dodged a disaster in the short-term, unless the Commonwealth and states come to a satisfactory long-term solution on public hospital funding before June 2020, we’re going to be back in this same place. We can’t let that happen.

“The Australian public – and the hospitals that serve them – deserve better. They deserve a model that guarantees adequate funding of their public hospitals. They’re sick and tired of the constant uncertainty.

“Our view is that sustainable and fair public hospital funding can only occur via a long-term agreement between the Commonwealth and states and territories to share in real hospital cost growth.

“Public hospitals have a role to play as well. We need to strive for greater efficiencies. There are always better ways of doing things. St Vincent’s has put forward a number of reforms which could improve health outcomes, deliver savings and reduce demand on public hospitals.

“For example, more and better use of same-day ambulatory care clinics in public hospitals have the potential to improve both efficiency and patient outcomes.

“We need to expand trials of more assertive triage models and improve access to after-hours GP care – including co-location of GP services with hospitals – to divert non-emergency cases to more appropriate care.

“Another area where there’s much work to do is in the cost-shifting that goes on between the residential aged care system and the public hospital system.

“I encourage the Commonwealth and states to redouble their efforts to achieve a long-term solution for public hospitals. The health of Australians depends on it,” said Mr Hall.