Opinion & Commentary
Beds not bureaucrats can ease health crisis
It’s a quarter of a century since Medicare was established but no one is celebrating. No wonder considering the critical condition of the public hospital system throughout Australia.
Instead we have a three-hundred page reform ‘blue print’ from the National Health and Hospital Reform Commission.
At least the report has identified the major problem. The reality is that Australia’s dangerously overcrowded public hospitals don’t have enough beds to provide a safe and timely standard of care even for emergency patients.
Unfortunately, the NHHRC has strongly supported a range of non-solutions. The primary care reforms it proposes will not help our dysfunctional State-run public hospitals cope with an inexorable rise in demand from an ageing population.
Since 1983 the State health bureaucracies that are responsible for allocating funding, planning services, and rationing public hospital care have cut the number of public hospital beds by one-third – from 74,000 beds to just over 54,000. This is a 60% cut taking population growth into account from 4.8 public acute beds per 1000 head of population to 2.5 beds at present.
Overcrowding occurs when bed occupancy exceeds 85% in hospitals operating near or beyond full capacity. Average bed occupancy in most major metropolitan public hospitals is above 90% and hospitals routinely operate above 100% occupancy due to political pressure to reduce electorally-sensitive waiting times for elective surgery.
The nation-wide bed shortage means one-third of emergency patients wait longer than eight hours for admission into a bed. Emergency staff spend over one-third of their time caring for these patients, which leads to over 30% of patients not being seen in emergency departments within the recommended time. The queue for ‘free’ public hospital care now starts in crowded hospital corridors lined with ailing, mostly frail elderly patients that are parked on trolleys for hours and sometimes for days.
The pressure on hospitals is intensifying because rising numbers of older patients with complex conditions are requiring unplanned admission for bed-based medical and nursing care. In the last five years, admissions by patients aged between 75 and 84 and 85 and over increased by 25%. A decade ago, the 85-plus demographic wasn’t even distinguished in the statistics.
The problem is not that hospitals are underfunded. Over the last decade, real expenditure on public hospitals increased by 64% to top $27 billion in 2006-07. The real problem is that not enough of the money gets through to the frontlines.
Between 1996 and 2006 the number of acute public hospital beds fell by 18% per 1000. But between 2001 and 2006, the number of administrators increased by 69%. The large and costly area health services which administer public hospitals in most states are better at paying for bureaucrats than for beds, and have a deservedly notorious reputation among overworked hands-on hospital staff for warehousing armies of clerks and managers who have no involvement in patient care.
As more and more people live to older ages, a tsunami of demand will break in public hospitals. Increasing numbers of ‘very old’ patients will inevitably require emergency and bed-based hospital care due to the age-related onset of chronic conditions.
Going by the state of the health reform debate, the ‘hospital crisis’ will become a catastrophe. The wrong-headed premise of the Rudd Government’s reform agenda is that the Commonwealth must spend billions on a national network of comprehensive general practice ‘Super Clinics’ to take pressure off hospitals.
The NHHRC has fully endorsed this approach. It claims that 10% of public hospital admissions are potentially prevented by providing better coordinated primary and allied health care for chronically ill and elderly patients. Yet even the discussion paper on the subject commissioned by the NHHRC showed that trial coordinated care programs have failed to keep people out of hospitals.
The 15% boost in bed numbers recommended by the Commission is welcome. But even if the government accepts this, a one-off and costly boost in bed numbers is not a long-term solution.
Instead of wasting money building stand-alone elective hospitals and wasting political capital trying to take full responsibility for the primary care system, the Rudd Government should focus on structural reform of the hospital system. Flexible and responsive funding and administrative arrangement must be created to allow hospitals to increase the supply of beds and meet the demand that rising numbers of older and sicker patients will generate in coming decades.
The first step towards rebuilding the hospital system is for the Commonwealth to take full control of public hospital funding and introduce Medicare-issued, casemix-calculated hospital vouchers to pay for treatment in either public or private hospitals.
The second step is for state governments to agree to re-introduce local public hospital boards with full financial and administrative responsibility for their facilities. The third step is to close down the area health services and use the money saved to fund vouchers and open and staff more hospital beds.
This isn’t a plan for Canberra to take over and run hospitals. Funding will be centralised by converting the current federal grants and state hospital budgets into vouchers, while the management of hospitals will be decentralised to local boards.
Nor is this a plan to privatise the health system. Tying taxpayer funding to the treatment of patients, increasing choice and competition, and freeing hospitals to respond appropriately to the health needs of the community is not that radical. This parallels the voucher-based policies the Rudd Government is considering implementing to increase efficiency and improve access to publically-funded education in schools, TAFE, and the universities.
A 50% increase in patients presenting at emergency aged over 85 is predicted over the next five years alone. Bed numbers must increase significantly to equip the hospital system to cope with the unprecedented impact of demographic change. The challenge for policy makers is to dispense with the failed methods of running public hospitals that have created a continuing crisis twenty-five years in the making.
Dr Jeremy Sammut is a research fellow at The Centre for Independent Studies. His report, ‘Why Public Hospitals are Overcrowded: Ten Points for Policy Makers’, was released by the CIS in July.
