Health spending to swamp budgets (Australia)

[mr friendly guy]

linky

Health spending to swamp budgets
JONATHAN PEARLMAN AND LINTON BESSER
January 25, 2010

KEVIN RUDD has warned that the states are being ''overwhelmed'' by rising health costs as he gears up for an election fight over an overhaul of hospital funding.

Citing figures from the coming third intergenerational report, the Prime Minister said yesterday health spending was set to swamp the public purse and he sought to pave the way for a battle with the states over control of funding.

He singled out NSW, where the Treasury estimates spending will more than double over 22 years to 55 per cent of the budget.

''Rapidly rising health costs create a real risk - absent [of] major policy change - state governments will be overwhelmed by their rising health spending obligations,'' he said in a speech in Sydney. ''Without reform, states' ability to provide the services they currently provide will be significantly strained. That is why 2010 must be and will be a year of major health reform.''

Mr Rudd is under pressure to fulfil his election pledge to seek a mandate for a federal takeover of hospital funding if states fail to meet healthcare benchmarks.

In July he put off his announcement for six months when an expert panel urged the Government not to rush into a takeover and recommended sweeping changes. The proposals, by the National Health and Hospitals Reform Commission, included a voucher system for patients to use private clinics. It suggested national access targets, under which patients would wait no more than two days to see a GP or three months for planned surgery.

The intergenerational report, expected to be released within weeks, says health spending will rise from 4 per cent of gross domestic product to 7.1 per cent by 2050, equivalent to $200 billion, or an increase from $2290 a person to $7210. Treasury modelling for the report found that by 2045 health spending would exceed the states' non-GST tax revenues - a result that Mr Rudd said would occur possibly earlier in some states. By 2050, health spending on those aged 65 plus is expected to rise seven-fold and spending on those aged 85 plus will increase by 12 times.

In NSW, health dominates the state's budget. In 2009-10, it was set to soak up $15.1 billion - more than double the $7 billion for transport - and has been growing faster than inflation.

In 2007, NSW health department spending increased 7 per cent but last year it grew more than twice as fast. In all, between 2005-06 and 2009-10, health expenditure has ballooned by more than $3 billion. If the present rate of growth continues, health will eat into all other portfolios.

Mr Rudd had promised to release his plans after consulting with the states and receiving the intergenerational report. He consulted them last month and the report will be released soon.

''We will put a proposal to the states and territories,'' Mr Rudd said last week. ''What we have said consistently is that if they accept that well and good. If they don't then we'd seek a mandate from the people in terms of the Commonwealth moving to take over the system.''

The Opposition Leader, Tony Abbott, yesterday labelled Mr Rudd a ''fraud'' and challenged him to deliver on his election promise. ''Mr Rudd promised if there had not been any improvements in health he would move to a federal takeover,'' Mr Abbott said. ''Most people say that if anything, things have gotten worse … Mr Rudd is a fraud. He shouldn't make commitments he doesn't intend to keep.''

Mr Abbott, who as health minister signalled a federal takeover, has indicated he will push for a referendum on reform but would like to retain local boards to administer funding. ''We will announce a comprehensive policy in due course,'' he said.

I am somewhat open minded about a Federal takeover despite criticisms from the AMA. The only fear / question I have is who decides how much hospital staff gets paid. Generally WA (at least with interns and RMOs) are paid a bit on the low side, apparently SA pays their junior doctors more than we do. However we are nowhere as bad as Victoria, and I do have a fear that someone may try and standardise pay to the lowest common denominator.

[Lusankya]

Even in the event of a Federal takeover of healthcare, I'd still expect SA doctors to get paid more than interstate doctors. Part of the reason for the high pay in SA is that nobody wants to live in Adelaide, for reasons that are either completely unfounded or quite incomprehensible. I don't know about WA, but SA is classified as regional for the purposes of immigration, so in the event of a takeover, I'd imagine that there would be incentives given to doctors who were willing to move there (as though cheaper housing, more parks and higher-quality fresh produce aren't incentives enough).

[The_Saint]

Lowest common denominator around would probably be us (Tas) ... I'm not even sure we're classed as "regional" for most things as an insult to the injury.

Pity Kevin can't smack a bit of sense into the current state government (which is the same party but fights everything Labor that comes from Canberra simply because it comes from there... which on the whole sounds like a good reason to fight it).

There's still a big question mark over the hospital in the North of the state that the Federal government took over ... mostly because the federal government hasn't come up with the goods and state treats it like a leprous traitor.

[mr friendly guy]

I am wondering how the Federal government will fix the problems in health. I can assume broadly speaking there are two main reasons.

1) more money.
2) less duplication of administration.

And maybe cheaper adminstration for a third reason. If WA was paying Neale Fong (ex top doctor) more then Kevin Rudd is getting, then I can't imagine Canberra allowing their public servants in health to earn any way near what Fong was getting.

Reason number one is a given. Despite the moans from wankers in letters to the editor who think health is like some type of business, the fail to appreciate as our population grows and ages, shock horror we need to spend more on health to accomodate. Instead in WA we have the razor gang trying to cut 3% off the health budget.

Reason two is not unreasonable as well. In WA we have a high ratio of administration staff to clinicians. The problem lies in that some departments are missing secretaries, clerks etc, which we need. This begs the question, what are the other administration staff doing? I suspect they are in the payroll departments finding ways to pay us less by exploiting "loopholes" ie not real loopholes at all but made up rules and blatantly admitting to breaking rules when these "loopholes" don't serve.

Reason number three applies mainly to Western Australia, and I am not qualified to speak about the other states and territories.

Now there are some suggestions humble old me can suggest to try and keep costs down and dare I say it, increase revenue (no its not what you think. I haven't betrayed our health system for American style healthcare).

To increase revenue
a. Allow more eateries / gift shops to set up shop in the hospitals. I hear some Eastern state hospitals do it, but I got this idea because Canadian hospitals (at least those I have visited) do this. In 2002 when I was there, Western Toronto had a freaking burger king in its food hall, while the bigger Toronto general had Subway, some pizza place for awesome food.

Now you might say, while allowing junk food outlets is sending the wrong message. So what? Putting a junkfood is bad MMkay message won't do as much as taxing the stuff. Or legislating to limit the fatty content. Once you do that, sending the wrong message meme wouldn't be much of an issue.

To decrease cost

1. Voluntary guidelines to prescribe cheaper alternatives. No I am not suggesting just prescribe generics, I mean prescribing different drugs for the same indication with the same effectiveness. Get doctors, pharmacists to volunteer this list with appropriate study quotations and make it available. To give you 2 examples

a) Assasantin vs clopidogrel for the prevention of strokes. The latter is more expensive while the PROFESS trial showed no difference in effectiveness. Note this doesn't mean clopidogrel will suddenly be not prescribed, as its also indicated in cardiac disease.

b) sodium resonium vs calcium resonium in the treatment of hyperkalaemia. The resonium is the active ingredient and according to MIMS 2009 the former costs 1/6 the price of the latter. Already pharmacist at one hospital I worked at inform doctors about this. However not all hospitals do this.

2. Get rid of TED stockings for prevention of DVTs in medical patients. They don't work in them, plus they are expensive. Note surgical patients is another matter altogether as they are more at risk of DVTs and it seems like stockings do work.

3. Encourage doctors to order less unnecessary blood tests. Ok, this is hard especially given the litigious society we live in, but seriously I find that as I get more experience I order tests less frequently. And I am someone who won't mind ordering less common tests if I have the slightest sniff that I might find something. Generally though, this is less of a problem for the physicians. Surgeons I am looking at you. Do you guys really need coagulation function everyday after you already operated on the guy?

Oh, and when measuring warfarin levels, just order INR (no need to order the full coagulation screen). And use CRP (a marker of inflammation) less often. I know its cheap, but once you have a trend I don't bother and just go by clinical findings.

4. Outsource the payroll department to India.

Seriously, you wouldn't put an overweight fatso who can't kick a football on your AFL team. Yet we put people who can't even follow a roster and do basic primary school level maths without their computer doing the calculations for them in charge of our pay. At least we can hire some Indian accountants on the cheap to handle it.

5. Invest in outpatient programmes whose sole aim is to keep patients out of hospital for longer?
We had such a program until the health minister axed it saying it wasn't working according to a study done on it. Too bad the study's author corrected this misconception. Example program is pulmonary rehab for people with emphysema.

6. Increase taxes on cigarettes and fuck those people who whine using a false dilemma that its a money grab by the Federal government and not really about health. Fuck them hard, preferably with a ten foot pole. With spikes at the end.

Oh, and the lowest common denominator isn't Tasmania. Victorian interns get paid worse. Hey maybe they think the honour of working in such an awesome state is enough.

[The_Saint]

At least in Victoria the government didn't ban the installation of a PET scanner at a private hospital because it was going to show up the lack of one in the public hospital.

By the sounds of it you (mfg) might know more about the medical side of that shenanigans than me but I've seen primary school students act better than Lara Giddings did over that shitstorm.