[Greens-Media] Media release: Hospitals face funding crisis under new funding model

[John Kaye]

Hospitals face funding crisis under new funding model

Media release: 7 February 2014

NSW hospitals face a budget shortfall of millions of dollars for treating serious trauma patients under the new federal-state activity-based funding system, according to Greens NSW MP John Kaye.

('Hospitals face huge shortfalls in funding for major trauma', Sydney Morning Herald, 7 Feb, page 5, http://j.mp/smh140207) 

Dr Kaye was commenting on a study that analysed NSW hospital spending on serious trauma cases and compared it to the money that they would be paid under the activity-based funding system that classifies each patient into a treatment cost class according to the condition they present with. The research identified a $14.7 million shortfall.

('Major trauma: the unseen financial burden to trauma centres, a descriptive multicentre analysis', Kate Curtis, Mary Lam, Rebecca Mitchell, Cara Dickson and Karon McDonnell, Australian Health Review 38(1) 30-37 http://dx.doi.org/10.1071/AH13061) 

Dr Kaye said: "A loss of 8 per cent of funding is completely unsustainable for any public hospital trauma service.

"Something will have to give and it is likely that patients and clinical staff will suffer as a result of a funding formula that fails to account for the complexity of hospital treatment costs.

"The capacity of public hospitals to treat the range of cases presented to them is being compromised.

"The activity-based funding model tries to shoehorn patients into a limited number of treatment cost categories.

"State and federal governments have enthusiastically signed up to pigeon-holing complex conditions, often including multiple injuries, into treatment cost classes and dumping budgetary pressures onto nurses and doctors.

"Trauma treatment is the tip of the iceberg. The NSW public hospital system will receive funding that is hundreds of millions of dollars below the real costs of providing high quality patient care.

"The study shows the impossibility of codifying the costs of complex, highly variable medical treatment into simple dollar-value treatment classes.

"In their rush to squeeze the health budget, Labor and Coalition governments have condemned hospitals to choosing between running up debt or refusing to treat patients with complex  injuries," Dr Kaye said.

For more information: John Kaye 0407 195 455