How Will the Extra Funding for Public Hospitals Help?
This week, the federal government announced it will pay states and territories an extra, one-off, A$1.7 billion for public hospitals. This has been billed as a way to fix some ailing hospitals and shorten waits for care in emergency departments and for elective surgery. But will it really make a difference?
How are hospitals funded?
Australian public hospitals are funded through a collaborative arrangement involving state, territory, and federal governments. The federal government provides 37% of public hospital funding annually, primarily through the National Health Reform Agreement. States and territories fund nearly all the rest.
How the extra funding compares
The federal government will spend $30.19 billion on public hospitals this financial year. The extra funding will grow its public hospital spending by 12% in 2025–26. Extra funding will likely impact Northern Territory hospitals the most, receiving $51 million more, a 30% increase. While larger states will receive additional funding, they have more public hospitals and patients. For example, New South Wales will receive $407 million, but this equates to only an 11% increase from the federal government.
Pressure in public hospitals
Public hospital pressure has been building for over a decade. Emergency departments are often clogged, leading to long wait times, mostly because of staff shortages. Around 10% of patients wait more than two hours. There is little slack in the system to counter unpredictable surges in demand for care.
Will the money help?
While additional funding will help, there is no magic wand. Public hospitals need to substantially reorganize their staff, workflows, beds, and buildings. This in an environment that has workforce shortages, burnout, and wage pressures making major health system changes particularly difficult. Some hospitals may reduce their waiting times substantially, if states and territories allocate their extra funding to poor performers. However, poor performance can be related to systemic issues out of the hospital’s control, such as workforce shortages.
What else needs to happen?
All governments need to invest more in prevention programs to slow the growth in public hospital demand. More Australians are obese, as a proportion of the population, compared to other OECD countries. This has created a heavy burden. Reducing financial waste in the health-care system is of huge importance. Savings could be used for long-term improvements in waiting times once the extra funding runs out.
Conclusion
The extra funding is a welcome step, but it is only a one-off payment. Public hospitals need ongoing funding to keep up with demand. The federal and state governments must work together to reduce waiting times and improve the overall health-care system. This includes investing in prevention programs, reducing financial waste, and setting national performance targets for states and territories.
FAQs
Q: How much extra funding will public hospitals receive?
A: The federal government will provide an extra A$1.7 billion for public hospitals.
Q: How will the extra funding be allocated?
A: The allocation of the extra funding will depend on the states and territories, but it is expected to be used to reduce waiting times and improve hospital performance.
Q: Will the extra funding solve the problems in public hospitals?
A: While the extra funding will help, it is only a one-off payment and will not address the underlying issues in public hospitals, such as workforce shortages and burnout.
