New numbers reveal underfunding of ACT hospitals during the pandemic. In 2020-21 spending increased by 2 per cent (the lowest in Australia) while patients rose by 9.1 per cent (the highest). JON STANHOPE & KHALID AHMED report… 

IT was reported recently that it took ACT Health three months to respond to a question on notice from the Opposition health spokesperson, Leanne Castley. 

The question, while on its face very simple (namely: “How many beds are there in the maternity ward at Calvary Hospital, in the years from 2016 onwards?”) it clearly caused much consternation and confusion within the Health Directorate. 

The issue in contention was whether to report the number of “physical beds” or “funded beds” at the hospital. 

The position taken initially, and quite reasonably, was that the question should be interpreted as applying to beds that were being utilised, ie the funded beds. 

A draft response was accordingly prepared advising that there were 19 beds in the ward from 2016-17 to 2018-19 and 18 beds between 2019-20 to 2021-22. 

However, that answer was amended, following internal discussions, to 27 beds and 30 beds respectively, ie the physical beds, including those not being utilised or otherwise in storage.

That such prolonged internal debate was necessary is surprising since national bodies such as the Australian Institute of Health and Welfare and the Productivity Commission have well established definitions and standards for data collection and reporting. 

It is also concerning that it was decided to provide figures, reportedly agreed to by the minister, that are essentially meaningless. 

Surely, what matters is not the physical beds, but beds that are funded, ie, beds that have the necessary staffing allocations – beds that can actually be used by patients. One wonders what possible reason officials or the minister might have for deciding to report on the number of beds lying idle or in storage.

The significant difference between the number of “physical” and “funded” beds raises a serious question, namely why all of the available beds are not in use. The answer is obvious, namely because the hospital has not been allocated sufficient operating funding to staff the beds ie, health services have been defunded or underfunded.

The 2023 Productivity Commission Report on Government Services (RoGS) confirms not only that that is the case but that the ACT government is the only Australian jurisdiction to have done so in recent years. 

The ACT also continues as the worst performing jurisdiction in treating patients on time, in the various categories in the emergency department. In 2021-22 only 48 per cent of patients in the ACT were treated on time compared to the national average of 67 per cent. 

While treatment within four hours is the nationally agreed benchmark for emergency departments, the ACT only met the target for 52.4 per cent of patients, the lowest in Australia, for which the average was 60.9 per cent. Interestingly, the RoGS report shows that in 2016-17, 73 per cent of patients were treated within four hours, the third highest rate across jurisdictions and above the national average of 72.3 per cent.

The expenditure and activity data published by the Productivity Commission clearly identifies the reason behind the deterioration in performance from 2016-17 onwards.

 Chart 1 provides the average annual change over the period 2016-17 to 2018-19 (with 2015-16 as the base year) in both public hospital separations (completed treatment) and recurrent expenditure on public-hospital services in 2020-21 dollars, as adjusted for inflation.

Over this period, hospital separations in the ACT increased at the rate of 3.1 per cent annually, close to the national average of 3 per cent. Real recurrent funding on the other hand decreased by 1.1 per cent on average. 

Apart from the ACT, WA is the only other jurisdiction where recurrent expenditure decreased over this period. However, in WA, hospital separations also decreased at the rate of 0.8 per cent.

Chart 1: Average Annual Change in Recurrent Funding for Public Hospitals and Hospital Separations: 2016-17 to 2018-19 (2020-21 dollars)

Population growth and ageing are among the drivers of the growth required in funding of hospital services. Population growth has varied across jurisdictions and their age profiles also vary. 

The Productivity Commission reports provide data on the age standardised separation rate, as well as per person real expenditure across jurisdictions. These measures, combined, take into account population growth, inflation and age profile.

The age standardised per person hospital use rate decreased in some jurisdictions over the period 2016-17 to 2018-19, for example, in NSW and WA (1.6 per cent per annum), and SA (0.5 per cent). Nationally, it increased at close to 1 per cent. Per person expenditure increased nationally at 1.3 per cent per annum in real terms. 

The RoGS report again highlights the ACT as the only jurisdiction in which the hospital use rate increased at an average of 0.2 per cent while the per capita expenditure decreased at a rate of 3 per cent.

Chart 2: Average Annual Change in Recurrent Expenditure per Person and Age Standardised Separation Rate: 2016-17 to 2018-19 (2020-21 dollars)

These cuts possibly explain why of the 27 beds in the Calvary maternity ward that the health bureaucrats reported, only 19 beds (70 per cent) had the funding available for patient care during 2016-17 to 2018-19. Notably from 2018-19, only 18 beds were available, a further decrease, reflective of further funding cuts in real terms.

The RoGS report also reveals that the underfunding continued after 2018-19 and during the pandemic. In 2020-21, the last financial year covered by the report, recurrent expenditure in ACT public hospitals increased by 2 per cent, the lowest across all jurisdictions, while separations increased by 9.1 per cent, the highest across all jurisdictions. By comparison, nationally, expenditure increased by 4.7 per cent while separations increased by 3.6 per cent.

Coincidentally, the ACT Budget was also required to accommodate about $50 million in recurrent funding of the Light Rail – Stage 1 during this period.

We have previously pointed out that emaciated public health systems have entrenched inequities. It is well known that for those who can afford private health insurance and out-of-pocket costs, wait times for elective surgery are a fraction of those in the public system. 

The RoGS report details that within the public health system those most disadvantaged, as measured by the ABS Index of Relative Socio-economic Disadvantage (IRSD), waited much longer than those least disadvantaged. 

Likewise, Aboriginal and Torres Strait Islander (ATSI) people waited longer compared to other Australians in the ACT with the 50th percentile wait time being 16 per cent more and the 90th percentile wait time being 5 per cent longer.

With regards to trust and confidence in the ACT hospital system, 8.8 per cent of ATSI people did not wait to be seen in the emergency departments, the highest rate across the country. 

An Aboriginal person is almost twice as likely as a non-Aboriginal person to leave an emergency department without having been seen. Likewise, of those seen, 4.3 per cent left at their own risk, the second highest rate in the country. Aboriginal peoples are 2.4 times more likely to leave a hospital at their own risk compared to non-indigenous people.

The chief minister is reported to have expressed his desire for the ACT to have the highest vote in support of the upcoming referendum on the Aboriginal Voice to parliament. 

That is commendable, however, it is perhaps fair to suggest that if Canberra hospitals and health systems received the funding they clearly require in order to meet the needs of the Canberra community including pertinently those of Aboriginal peoples, the need for the Voice may not be so pressing.

Jon Stanhope is a former chief minister of the ACT and Dr Khalid Ahmed a former senior ACT Treasury official.