More than half of hospital funding increases go to wage, fee rises for medical and administration staff

More hospital cost increases go to the rising wages of doctors, nurses and admin staff, rather than service improvements.

South Australian hospital costs are being swallowed up by wage and fee increases for doctors, nurses and administrators more than service improvements, a study has found.

The study also found powerful unions getting good deals for their members was a bigger influence in SA than other states.

The University of Adelaide and Health Department study found wages and fees for medical staff took up more than half of the hospital cost increases over more than a decade.

The study found that over a 12-year period every South Australian contributed $375 more a year to the pockets of doctors, nurses and other workers, up from $1063 to $1438, or 56.2 per cent of total cost increases.

But non-labour costs for equipment and supplies increased from $423 to $706 for each South Australian, or 43.8 per cent of cost increases.

“Policy narratives often centre around demand pressures from an increasingly older, overweight, and chronically ill population,” the study, ­published in the journal Australian Health Review this month, says.

“Comparatively little attention has been paid to the influence of increases in real input costs.

“Real salary growth has been a major driver of acute public hospital recurrent expenditure growth in SA, whereas hospital utilisation rates have played a minor role.”

The study used latest state government figures available for the 12 years prior to 2017-18.

During this period, hospital spending more than doubled from $1.8bn to $3.72bn but the population only grew by 11 per cent from 1.57 million to 1.74 million people.

The biggest cost increases for staff were:

DOCTORS fees and wages – up from $337 to $517 per capita, or 53 per cent;

NURSES wages and fees – up from $522 to $709 per capita, or 35 per cent; and

OTHER healthcare workers – up from $100 to $136 per capita, or 36 per cent.

The study says upward pressure on labour costs has “perhaps been influenced by local industrial conditions such as a strong union presence and workforce shortages”.

South Australian Salaried Medical Officers Association spokeswoman Bernadette Mulholland said the data showed an average increase in medical officers’ salaries of 2.9 per cent a year over the 12-year period.

“This is not excessive and is consistent with salary movements generally,” she said.

Australian Nursing and Midwifery Federation spokeswoman Elizabeth Dabars said the wage growth was “relatively modest considering the important work and vital contribution nurses and midwives make”.