States better off under hospital deal: Labor

Health Minister Mark Butler has declared the 24 per cent increase in commonwealth funding for hospitals is a much fairer deal for the states as health economists question the spending priorities in the national cabinet deal.

Health Minister Mark Butler has declared the 24 per cent increase in commonwealth funding for hospitals is a much fairer deal for the states as health economists question the spending priorities in the national cabinet deal.

Health Minister Mark Butler has declared the 24 per cent increase in commonwealth funding for hospitals is a much fairer deal for the states as health economists question the spending priorities in the national cabinet deal.

Mr Butler declared the states would be considerably better off under the deal, which massively increases commonwealth spending.

Writing in The Australian online, Mr Butler said the government was also spending $1.2bn in Medicare funding to take pressure off the hospitals.

“This funding will give state governments the confidence to invest in their public hospitals, focusing their efforts on easing ramping and clearing their elective surgery backlogs that built up over the course of Covid,” Mr Butler said.

“Importantly, the final agreement will deliver further integration of our fragmented health system: ensuring that hospitals, aged care and general practices are working together to get better health outcomes.”

But experts say the funding priorities are out of whack and the bigger quantum should have been given to primary care.

Grattan Institute health and aged-care director Peter Breadon warned the $13bn pledge to top up hospital funding would not address systemic problems in healthcare delivery such as chronic disease and GP shortages in rural areas.

It comes after analysis by Mr Breadon of the government’s mid-year budget update found hospital payments from the commonwealth to the states were projected to grow by 23.7 per cent over the next four years.

He warned escalating spending on hospitals ignored growing evidence to support governments investing in prevention and primary care as a first priority to treat people before they get to hospitals.

“This is a huge investment in public hospitals, which is welcome. But everyone knows that we can’t just do more of the same and get a health system that’s set up for the future,” Mr Breadon said.

“This investment shouldn’t crowd out reforms to make hospital care more efficient, or investment in prevention and primary care to keep people out of hospital in the first place.”

The commonwealth has committed to increasing its funding for public hospitals – jointly funded by the states – as part of a series of commitments made by national cabinet in exchange for premiers agreeing to double the annual increase in state funding for the NDIS.

From 2025, the commonwealth will provide an extra $13.2bn over five years under a new hospitals agreement.

Prominent health economist Stephen Duckett said states should be forced to adhere to clear performance targets to ensure taxpayer funds were well spent.

“My main concern is what precisely consumers will notice as a result of this change. It’s all very well for the commonwealth to pay more and that cost is met from taxpayers,but I want to know what exactly have the states committed in exchange for that increase in funding?” Professor Duckett said.