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Australian Healthcare & Hospitals Association (AHHA) ACERH Policy Forum Hospital Financing - Viewpoints 22 February 2008 your voice in public healthcare About AHHA

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australian healthcare hospitals association ahha

Australian Healthcare & Hospitals Association (AHHA)

ACERH Policy Forum

Hospital Financing - Viewpoints

22 February 2008

your voice in public healthcare

about ahha
About AHHA

The Australian Healthcare & Hospitals Association (AHHA) is the only national organisation representing the public healthcare sector and the professionals working in it

your voice in public healthcare

about ahha3
About AHHA

your voice in public healthcare

Members of the AHHA are state health departments, health services, other providers, individuals; National Councillors are senior health administrators, clinicians, academics

AHHA is independent of government and financed through membership and publications

Our primary role is to uphold and improve Australia’s public health care sectorthrough high-level advocacy and representation

3

setting the scene
Setting the Scene

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  • Public hospitals experiencing unprecedented demand demonstrated by a 25% increase in admissions in the 10 years from 1996 [AIHW Hospital Statistics]
  • Coupled with pressures created by workforce shortages, there is an undeniable and predictable impact on capacity to deliver safe services
  • High profile incidents dominatingmedia illustrate this

4

setting the scene5
Setting the Scene

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The Commonwealth Government’s share of public hospital funding (through the AHCAs) declined by 3.1 percentage points (45.8% to 42.7%) between 2003-04 and 2005-06 (1st 3 years of current AHCA)

State/territory government funding increased 3.1 percentage points from 54.2% to 57.3% [AIHW: Health Expenditure in Australia 2005-06].

5

setting the scene6
Setting the Scene

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The magnitude of this Commonwealth funding shortfall on public hospitals is significant

The total amount of Commonwealth funding that public hospitals missed out on in 2006-07 was $1.6 billion [based on Australian Institute of Health and Welfare data, excluding DVA payments)

6

setting the scene7
Setting the Scene

your voice in public healthcare

Inadequate indexation factor applied in the AHCA - 1.7% (plus factors for population increase (1.2%) and utilisation (1%))

After allowing for inflation, growth in publichospital expenditure over the last decade (to 2005-06) averaged 4.6 %

AHHA is advocating for indexation of at least 4.5% above inflation

7

the new era
The New Era

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  • Labor’s National Health Reform Plan – aims to end cost-blame shifting (by mid 2009) and to improve health outcomes:
    • National Healthcare and Reform Commission
    • Rationalisation of Special Purpose Payments – focus on outcomes and outputs (HoTs) – National Partnership Payments
    • 2008-2013 AHCAs (?)
    • Elective surgery waiting lists
    • Preventative Health Care Partnership (Taskforce mid 2008)
    • GP Super Clinics
    • Workforce (nursing package)
    • Transition care (2000 places)
    • Dental (1 million consultations)

8

the new era9
The New Era

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The waiting list reduction strategy is the first new policy to be rolled out

Worth $600m in total, funding aimed at reducing lists, extending capacity and ultimately linking to performance

Value is small compared to cost of running public hospitals = $25b per year

Additional resources welcome

9

elective surgery
Elective Surgery

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  • Ist stage “elective surgery blitz funding” ($150m) allocated and due for completion in 2008
  • 2nd stage ($150m) proposals due 25 February for implementation over 3 years on capital and infrastructure.
  • 3rd stage ($300m) dividend payments to be paid in 2009-10 and 2010-11.

10

the next ahcas
The Next AHCAs?

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  • The next major challenge will be re-framing and negotiating the 2008-2013 AHCAs
  • These new agreements will be crucial in setting the direction for our health system
  • Must deal with increasing demand on hospitals and incentives for integration by focusing on
    • Prevention
    • Chronic disease management
    • Community care

11

pressure on public hospitals
Pressure on Public Hospitals

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  • Evidence shows that increased pressure on hospitals is due (in part) to:
    • Lack of prevention strategies and services
    • Deficiencies in early diagnosis and treatment services
    • Poor management of chronic disease in the community
    • Poor integration of hospital and other services

12

pressure on public hospitals13
Pressure on Public Hospitals

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    • 500 000 + Australians admitted to hospital every year with conditions that could have been prevented or treated in the community = almost 11% of all hospital admissions [Atlas of Avoidable Hospitalisations in Australia AIHW 2007]
  • Many conditions driving demand for public hospital care are largely preventable [State of our public hospitalsreport Federal Government 2007]:
    • kidney disease, the single most common cause of admission to public hospitals
    • other chronic conditions, such as heart disease and type 2 and diabetes.

13

public private funding
Public-Private Funding

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  • Reduction in share of Commonwealth funding for public hospitals is in sharp contrast to increases in the subsidy for private health insurance
    • PHI rebate has risen sharply in past 5 years with annual increases often above 8%
    • Only 40% PHI rebate goes to hospital services (60% is spent on administration, anciliary services etc

14

public private hospital issues
Public-Private Hospital Issues

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  • There is a role for both public and private hospitals but this role is generally not inter-changeable
  • Many public hospital services not generally available in private sector eg
    • 50% of public hospital patients are emergencies compared with 8% in private sector (2005)
  • Meet different community demands – not parallel systems

15

public private hospital issues16
Public-Private Hospital Issues

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AHHA has not found any convincing evidence that PHI rebate is an efficient use of public funding

Contributes to increasing gap betweenpublicly and privately funded services and access disparities between insured and non-insured

Heavily subsidised – mixture of incentives and penalties – where is the scrutiny?

16

conclusion
Conclusion

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Hospital and health financing system is piecemeal and uncoordinated

Imposes uneven cost burdens on consumers

Creates perverse incentives that work against the delivery of effective / efficient care

Problems will be exacerbated as more people with chronic disease seek care from multiple providers over extended periods of time

17

conclusion18
Conclusion

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What we need is a health system that promotes access to the most appropriate care in the most appropriate setting

We must articulate goals for delivery of healthcare – standards for access and equity – and develop a financing system to achieve this

May require radical restructure eg responsibility to one level of govt

Commitment to address communityexpectations through consultation

18

ahha 2008 policy priorities
AHHA 2008 Policy Priorities

REFORM

A new government = fresh ideas

Three major opportunities:

  • Early innovations
  • The Australian Health Care Agreements
  • The National Health and Hospitals Reform Commission

your voice in public healthcare

ahha 2008 policy priorities20
AHHA 2008 Policy Priorities

REFORM

A new government = fresh ideas

Three major policy areas:

  • National benchmarking and data
  • Information management (including but not limited to ICT)
  • Service integration (between providers; settings)

your voice in public healthcare

ahha 2008 policy priorities21
AHHA 2008 Policy Priorities
  • Topic Priorities
    • Dental and Oral Health
    • Chronic Disease Management
    • Mental Health
    • Indigenous Health
    • Rural/Remote Health
    • Women's and Children's Health
    • Workforce

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events
Events

AHHA Think Tank Exchange

The Early Health Reform Agenda: AHCAs and Early Innovations

When: Friday 2 May, 10am to 4pm

Where: Rydges Lakeside, Canberra

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events23
Events

AHHA Congress

Reform – A New Era

When: 25 and 26 September

Where: Rydges Lakeside, Canberra

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contact us
Contact Us

P: 02 6162 0780

F: 02 6162 0779

E: admin@aushealthcare.com.au

W: www.aushealthcare.com.au

your voice in public healthcare