News of the resignation of 11 emergency doctors from Launceston General Hospital due to a chronic bed shortage comes shortly after news that the health minister is considering boosting bed numbers in New Norfolk Hospital to ease the pressure on Royal Hobart’s Hospital’s emergency department.
Both stories are yet another sign that the state’s health system is like the frog in the boiling pot due to increasing demand for services at time when the health budget is stressing Tasmania’s finances. Both highlight the need to implement innovative and cost-effective alternative policies to create a more sustainable hospital system for Tasmanians.
The recent state budget forecasts that spending on health will increase from $1.56 billion in 2015-16 to $1.62 billion in 2016-17, and will consume almost 30% of total government revenue.
Projections show this will rise to more than two-fifths of the state budget by mid-century if current rates of spending growth continue.
This is unaffordable, given the additional impact of the ageing of the population, and Tasmania’s heavy reliance on federal grants, which may be cut in the future as Canberra strives to balance its books.
Meanwhile, higher health spending is not necessarily making the state healthier. Tasmanians currently experience some of the worst health outcomes in the nation, with high rates of chronic disease. The state also lags behind on elective surgery, with the average waiting time of 55 days recorded in 2014-15 the worst in the nation.
The Tasmanian public hospital system is under-performing despite consuming two-thirds of the health budget.
The $689 million redevelopment of the Royal Hobart Hospital will deliver a state-of-the-art facility. But getting healthcare right in the 21st century depends on more than simply building more hospitals.
Australia already has some of the highest rates of hospital usage in the world compared to other OECD countries, due to our having a ‘one size fits all’ hospital system suited to a bygone era — and not tailored to the diverse needs of modern patients — whereas other nations have discovered better ways to manage patient care.
What the hospital-heavy health system doesn’t do well is address the rising burden of chronic illnesses such as diabetes, heart disease, and respiratory disease. This is particularly the case in Tasmania.
An estimated 10% of hospital admissions (many of them chronic disease sufferers) in Australia are classified as potentially avoidable if patients had received appropriate prior care.
But the waste doesn’t stop there. Many of these patients are admitted to — and stay for the whole time -– in an expensive acute public hospital bed, despite not needing this as they do not require a high-tech test or procedure.
Beds occupied by chronic patients cannot be used for patients who do need tests, procedures, and admission from emergency departments, which results in longer waiting times. This is not cost-effective and the additional expense represents money that cannot be utilised to fund other services.
Other countries have addressed these problems by establishing an alternative and lower-cost sub-acute model of care, such as the ‘step-down care facility’ (SDCF) model operating in Scandinavia, the US and Germany.
A SDCF facility provides community-based care for patients with a chronic condition, or who have progressed beyond the acute phase of their treatment, at a significantly reduced cost. Similar to the common practice of sending new mothers to a hotel to ‘lie in’, they are purpose-designed medi-hotels co-located near hospitals, which use the latest information technology combined with hotel quality rooms to deliver the best quality patient care and the best quality patient experience.
Why Australia is yet to follow this innovative path is hard to fathom. The structure of our health system doesn’t help. Because the federal government funds community-based care and state-governments run hospitals, it seems that developing a transitional care setting half-way between a hospital and the patient returning home has fallen through the cracks.
A circuit breaker in Tasmania may be the One State, One Health System, Better Outcomes reform agenda, which has consolidated the three regional health services into one state-wide Tasmania Health Service to facilitate the restructure of health services state-wide.
Strategic investment in the SDCF model would yield savings, free up beds, and release funding to cut waiting times. Because the provision of these services could be outsourced to the most efficient and quality private sector provider, the state budget will gain additional relief from health costs, as the capital cost of establishing SDCFs will be borne by private investors.
The best way to manage the state health budget is to ensure more hospital patients receive the right kind of care in the right kind of place – at the best price for taxpayers.
Jeremy Sammut is a Senior Research Fellow and Director of the Health Innovations Program at The Centre for Independent Studies His latest report is MEDI-VALUE: Health Insurance and Service Innovation in Australia – Implications for the Future of Medicare.
Home > Commentary > Opinion > New approach on hospital services
New approach on hospital services
News of the resignation of 11 emergency doctors from Launceston General Hospital due to a chronic bed shortage comes shortly after news that the health minister is considering boosting bed numbers in New Norfolk Hospital to ease the pressure on Royal Hobart’s Hospital’s emergency department.
Both stories are yet another sign that the state’s health system is like the frog in the boiling pot due to increasing demand for services at time when the health budget is stressing Tasmania’s finances. Both highlight the need to implement innovative and cost-effective alternative policies to create a more sustainable hospital system for Tasmanians.
The recent state budget forecasts that spending on health will increase from $1.56 billion in 2015-16 to $1.62 billion in 2016-17, and will consume almost 30% of total government revenue.
Projections show this will rise to more than two-fifths of the state budget by mid-century if current rates of spending growth continue.
This is unaffordable, given the additional impact of the ageing of the population, and Tasmania’s heavy reliance on federal grants, which may be cut in the future as Canberra strives to balance its books.
Meanwhile, higher health spending is not necessarily making the state healthier. Tasmanians currently experience some of the worst health outcomes in the nation, with high rates of chronic disease. The state also lags behind on elective surgery, with the average waiting time of 55 days recorded in 2014-15 the worst in the nation.
The Tasmanian public hospital system is under-performing despite consuming two-thirds of the health budget.
The $689 million redevelopment of the Royal Hobart Hospital will deliver a state-of-the-art facility. But getting healthcare right in the 21st century depends on more than simply building more hospitals.
Australia already has some of the highest rates of hospital usage in the world compared to other OECD countries, due to our having a ‘one size fits all’ hospital system suited to a bygone era — and not tailored to the diverse needs of modern patients — whereas other nations have discovered better ways to manage patient care.
What the hospital-heavy health system doesn’t do well is address the rising burden of chronic illnesses such as diabetes, heart disease, and respiratory disease. This is particularly the case in Tasmania.
An estimated 10% of hospital admissions (many of them chronic disease sufferers) in Australia are classified as potentially avoidable if patients had received appropriate prior care.
But the waste doesn’t stop there. Many of these patients are admitted to — and stay for the whole time -– in an expensive acute public hospital bed, despite not needing this as they do not require a high-tech test or procedure.
Beds occupied by chronic patients cannot be used for patients who do need tests, procedures, and admission from emergency departments, which results in longer waiting times. This is not cost-effective and the additional expense represents money that cannot be utilised to fund other services.
Other countries have addressed these problems by establishing an alternative and lower-cost sub-acute model of care, such as the ‘step-down care facility’ (SDCF) model operating in Scandinavia, the US and Germany.
A SDCF facility provides community-based care for patients with a chronic condition, or who have progressed beyond the acute phase of their treatment, at a significantly reduced cost. Similar to the common practice of sending new mothers to a hotel to ‘lie in’, they are purpose-designed medi-hotels co-located near hospitals, which use the latest information technology combined with hotel quality rooms to deliver the best quality patient care and the best quality patient experience.
Why Australia is yet to follow this innovative path is hard to fathom. The structure of our health system doesn’t help. Because the federal government funds community-based care and state-governments run hospitals, it seems that developing a transitional care setting half-way between a hospital and the patient returning home has fallen through the cracks.
A circuit breaker in Tasmania may be the One State, One Health System, Better Outcomes reform agenda, which has consolidated the three regional health services into one state-wide Tasmania Health Service to facilitate the restructure of health services state-wide.
Strategic investment in the SDCF model would yield savings, free up beds, and release funding to cut waiting times. Because the provision of these services could be outsourced to the most efficient and quality private sector provider, the state budget will gain additional relief from health costs, as the capital cost of establishing SDCFs will be borne by private investors.
The best way to manage the state health budget is to ensure more hospital patients receive the right kind of care in the right kind of place – at the best price for taxpayers.
Jeremy Sammut is a Senior Research Fellow and Director of the Health Innovations Program at The Centre for Independent Studies His latest report is MEDI-VALUE: Health Insurance and Service Innovation in Australia – Implications for the Future of Medicare.
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