“Budget Mirrors Fail To Disguise Bad News For Public Hospitals”

“Health funding mirrors in today’s Budget fail to disguise the bad news for public hospitals,” said Mr Ian Powell, Executive Director of the Association of Salaried Medical Specialists, today.

“A close analysis shows that public hospital funding for existing services will only increase by about 0.5%. But through inflation and population growth the cost of running public hospitals is increasing by about 3.7%. In other words, despite increasing patient needs for public hospital services, their funding is in effect to decrease by about 3%.”

“Much of the extra $330 million announced by the government is soaked up by rolling over current funding (eg, elective surgery), unavoidable demand driven services (eg, primary care) and new services (eg, mental health). This leaves peanuts for maintaining existing services.”

“Public hospitals will be left with two choices. Either they will have to reduce patient services and sacrifice the quality of patient care or they will have to increase their deficits. Increasing deficits is the lesser of two evils but it is poor economics because it is simply postponing and increasing the problem.”

“It is good to see more money being put into new services but their effectiveness will be reduced if at the same time existing services are eroded. You can’t safely add new building blocks if the foundations are already creaking and straining under intense pressure,” concluded Mr Powell.

Ian Powell

EXECUTIVE DIRECTOR

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