My colleague Dr Jennifer Buckingham has exposed the myth about the Abbott government's first budget cutting $80 billion from health and education: federal spending in both these areas will continue to increase. Revising the unaffordable and unfunded 'Gonski' and health promises of the Gillard government cannot properly therefore be defined as a cut.
Under the terms of the health funding agreement with the states in 2011, the federal share of hospital funding was to rise by 185% – from $14 billion in 2013-14 to $40 billion in 2024-25. This would have meant that federal funding alone in ten years' time would have totalled more than the combined federal and state expenditure on public hospitals today.
Under the new arrangements announced in the budget, federal funding will still grow to $25 billion in 2024-25. Naturally, state premiers are complaining about the so-called 'missing' funding. However, the other major health announcement – the $7 GP co-payment – creates an opportunity for the states to access an untapped source of non-taxpayer funded revenue. Health Minister Peter Dutton will allow states to charge people who attend emergency departments to try to avoid the new Medicare co-payments. This is a major policy change. Since Medicare's inception in 1984, federal government funding for state health services has been conditional upon all Australians receiving treatment in public hospitals without user charges.
If the Senate passes the Medicare co-payment, 'free' treatment will no longer need to apply to outpatient public hospital services. The Abbott government should seize this opportunity to also remove the obligation not to charge for inpatient public hospital services.
This would permit state governments to levy a daily accommodation fee. The fee would not cover the cost of medical care, but rather the cost of the 'hotel services' component of a hospital stay – meals, cleaning, etc.
When a person enters hospital, they are relieved of their normal living expenses, which are transferred to the hospital. An accommodation fee is standard practice in European social democracies, such as France, for example, where the forfait hospitalier is currently €18 per day, or approximately $27.
In 2012-13, there were over 5.5 million public hospital admissions in Australia, which equated to over 18.8 million bed days. If each day patient had been charged say, a $30 daily accommodation fee, approximately $565 million would have been raised.
This revenue would have defrayed a small, but not insubstantial portion of the $23 billion state funding to public hospitals. It would also have been a more honest way of charging for hospital care than the standard practice of imposing exorbitant parking fees.
Hospital accommodation charges might help draw attention to the irrationality and unsustainability of the health system. Like GP co-payments, an accommodation fee would signal that public health services were not 'free', and might encourage more informed debate about individuals directly contributing to hospital and other health service costs.
Dr Jeremy Sammut is a Research Fellow at The Centre for Independent Studies.
Home > Commentary > Opinion > Follow the French: Charge patients for public hospital accommodation
Follow the French: Charge patients for public hospital accommodation
Under the terms of the health funding agreement with the states in 2011, the federal share of hospital funding was to rise by 185% – from $14 billion in 2013-14 to $40 billion in 2024-25. This would have meant that federal funding alone in ten years' time would have totalled more than the combined federal and state expenditure on public hospitals today.
Under the new arrangements announced in the budget, federal funding will still grow to $25 billion in 2024-25. Naturally, state premiers are complaining about the so-called 'missing' funding. However, the other major health announcement – the $7 GP co-payment – creates an opportunity for the states to access an untapped source of non-taxpayer funded revenue. Health Minister Peter Dutton will allow states to charge people who attend emergency departments to try to avoid the new Medicare co-payments. This is a major policy change. Since Medicare's inception in 1984, federal government funding for state health services has been conditional upon all Australians receiving treatment in public hospitals without user charges.
If the Senate passes the Medicare co-payment, 'free' treatment will no longer need to apply to outpatient public hospital services. The Abbott government should seize this opportunity to also remove the obligation not to charge for inpatient public hospital services.
This would permit state governments to levy a daily accommodation fee. The fee would not cover the cost of medical care, but rather the cost of the 'hotel services' component of a hospital stay – meals, cleaning, etc.
When a person enters hospital, they are relieved of their normal living expenses, which are transferred to the hospital. An accommodation fee is standard practice in European social democracies, such as France, for example, where the forfait hospitalier is currently €18 per day, or approximately $27.
In 2012-13, there were over 5.5 million public hospital admissions in Australia, which equated to over 18.8 million bed days. If each day patient had been charged say, a $30 daily accommodation fee, approximately $565 million would have been raised.
This revenue would have defrayed a small, but not insubstantial portion of the $23 billion state funding to public hospitals. It would also have been a more honest way of charging for hospital care than the standard practice of imposing exorbitant parking fees.
Hospital accommodation charges might help draw attention to the irrationality and unsustainability of the health system. Like GP co-payments, an accommodation fee would signal that public health services were not 'free', and might encourage more informed debate about individuals directly contributing to hospital and other health service costs.
Dr Jeremy Sammut is a Research Fellow at The Centre for Independent Studies.
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