Cash Injection not
the answer

Courier Mail
21st October2005
(Square bracketed sentences deleted by Editor)

By Des Moore and Julie Novak

In a pre mini-budget diversion exercise Premier Beattie has proposed major changes in national health policies which, while economically and socially sensible, would require extensive consideration by other governments. So far, however, he has not outlined structural reforms to the state’s public hospital system beyond endorsing the Forster review’s assessed need for dramatic changes and adding that the Government is developing measures that could provide tens of millions in extra funding.

Peter Forster’s acknowledgement (“Funds to fix staff overload”, Perspectives, 10 October) that it would be unrealistic simply to compare Queensland’s lower expenditure on public hospitals compared with the national average and fund to this level confirmed our earlier analysis that no basis exists for increasing annual hospitals expenditure by $1.5 billion. However, while indicating that his principal object is to alleviate staffing shortages in Queensland’s public hospitals, Forster’s assessment of possible staffing needs is open to serious question.

Forster supported our proposal for increased usage of private hospitals and confirmed that Queensland private hospitals account for a higher proportion of total separations (47 per cent) than in other states. But, to give Queenslanders similar access to public hospitals as in other states, he proposes public hospital separations be raised 4 per cent to the national average, costing about $200 million a year.

However, Australian Institute of Health and Welfare data shows to reach the national average for public hospital separations Queensland would require an increase of 14 per cent. An already over-loaded public hospital system would have added pressures. Queenslanders should not be forced to reverse their increasing preference for using private hospitals.

[True, Queenslanders have lower private health insurance (40 per cent) than the national average (43 per cent). But, particularly given recent developments in public hospitals, could this seriously be taken as proof more access is required?]

On staffing, Forster’s article argued nurses, allied health professionals and medical practitioners are coping with significantly higher workloads on average than clinicians in other states. Acknowledging the difficulty of estimating the current workforce gap, his review noted Queensland has 11 per cent fewer public hospital staff per 1,000 people compared to the Australian average.

But, as the state has 14 per cent fewer public hospital separations than average, that is no basis for adding to staffing of such hospitals.

More relevant is the Queensland Health analysis of staff workload ratios based on inpatient separations showing the state’s public hospitals have similar levels of doctors compared to other States but lower levels of nursing staff and allied health staff.

The Forster Review draws on Queensland Health’s projections of workforce needs to 2015 to recommend the additional employment over each of the next three years of 160-180 doctors, 500-600 nurses, and 260 allied health professional staff. Over these three years that would add 4,040 public sector medical staff at an estimated cost of $352 million, plus $135 million for more senior medical officers, visiting medical officers and generalist GP’s. Total additional expenditure would thus be about $160 million a year.

[The underlying rationale is that Queensland public hospitals need staffing levels similar to the states’ average. Although this appears a not unreasonable judgment, it implies these hospitals cannot function more efficiently than the average. This is contrary to past political claims.]

All of this implies the problem will mainly be overcome by additional funding rather than changing the structure and culture of the system. True, Forster rightly suggests a shift from centralised decision making to clinician-led decision making. But much more is needed, including giving individual public hospitals greater autonomy over the selection and dismissal of staff.

The Premier’s indication of tens of millions of extra funding still seemingly accepts the falsely based concept of additional spending of $1.5 billion a year. [However, even accepting additional expenditure is required,] Even if that’s accepted, the amount should be relatively small and easily financed without increasing taxes.

Funds should be obtainable from a reduction in general administrative expenditure, which has increased rapidly under the present government to an estimated $1,550 million in 2005-06 and includes extensive business regulation [the reduction of which would stimulate investment.] Alternatively, if the estimated operating surplus of $934 million was reduced (one of its purposes is to finance unexpected expenditure needs) this would not necessarily add to estimated net borrowings of $808 million as they were included to finance what looks like an unrealisable estimated increase in capital spending of over 30 per cent, or nearly $850 million, in 2005-06.

Des Moore, formerly Deputy Secretary, Commonwealth Treasury is now Director, Institute for Private Enterprise. Julie Novak is Senior Policy Adviser, Commerce Queensland.