Harsh hospital lesson costs us all
Tasmanians are still paying for the rejection of an innovative hospital planned for Hobart’s Domain, says Greg Barns
Almost three years ago myopia won the day in Hobart. Health Minister Michael Ferguson rejected a clever, well resourced and sorely needed new Hobart Hospital to be located on the Domain.
The consequences of inability to see behind bureaucrats’ objections about the project is now costing taxpayers of Tasmania dearly as the redevelopment of the existing hopelessly landlocked Royal Hobart Hospital site in Liverpool St falls behind schedule.
The 2014 proposal was the brainchild of Dean Coleman and heavyweight investors in the hospital sector with national and international experience.
Mr Coleman, a Tasmanian, proposed an integrated public and private hospital complex, essentially sited underground and at a low ground level on the Domain.
His proposal, worth $2.4 billion, was along the lines of a public-private partnership model, the optimal way governments around Australia get to build key infrastructure today.
Mr Coleman’s vision included a very neat solution to the Hobart Regatta Grounds and the Cenotaph.
Both would have been substantially enhanced had this proposal been acted upon.
Most importantly, Mr Coleman’s proposal would have moved the RHH away from its current location.
This is of fundamental importance. All around Australia major hospitals are moving to where patients have greater access and where the ambience of the surrounding space is maximised. Head to the Royal Children’s Hospital in Melbourne, located in Royal Park and close to the CBD, and you get the picture.
According to Mr Ferguson in December 2014 his bureaucrats told him the development of the new hospital would have put Tasmania’s balance sheet at risk. This claim was hard to square with Mr Coleman’s point in an opinion piece on December 14 that year in the Mercury that the “only financial input required from the state was for the new RHH Cenotaph Campus, in a manner that Treasury ultimately would select.
“All the other facilities were to be funded by private investors who were either secured or ready to enter negotiations on their offers, in line with the Government’s input on selection criteria.”
And in fact there were serious savings that would have been generated by Mr Coleman and his colleagues because a medi-hotel of 120 beds would have been built at the hospital complex.
Best practice now dictates that when patients are able, they move to a hotel bed rather than occupying a
All around Australia major hospitals are moving to where patients have greater access and where the ambience of the surrounding space is maximised.
valuable hospital bed. It is what happens in Victoria, and Western Australia will shortly have its first medi-hotel.
Writing on these pages on June 23 last year health expert Jeremy Sammut said medihotels deal with the problem of hospital beds “occupied by chronic patients [that] 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 used to fund other services.”
Hospital beds at places like the RHH are around $1700 a day. Medi-hotel beds come in at around $300 per day.
Mr Coleman proposed a 120 bed medi-hotel. In other words $180,000 per day, which is around $75 million a year, could have been the saving to Tasmanian taxpayers.
Instead of pursuing the Domain 500-bed hospital and hotel complex, we have an appalling short-term solution in the existing site redevelopment.
The key feature is K Block — Stalinist nomenclature appears to be appropriate given this statist solution. According to the government on May 15, 2015, K-Block, the 10-storey inpatient facility, would be completed in late 2018. On April 27, 2016, the Health Minister issued a media release in which he asserted “the Royal Hobart Hospital redevelopment remains on time and on budget, and the contract completion date for the RHH redevelopment remains the end of 2018.”
But as Matt Smith reported on August 16 last year, Mr Ferguson’s optimism was misplaced. There would be a six-month delay in completion, the Mercury revealed. Mid-2019 is now the scheduled completion date for the project.
When your builder takes longer to complete your new home or your renovation you, the customer, end up paying more irrespective of any penalty clauses in the contract because they do not cover the total cost of delay. It is no different with the RHH project. The taxpayers of
Tasmania are, and will pay, for the cost overruns, increased labour inputs and delays in this project.
Government, as former US President Ronald Reagan once said, is the problem.
That is why a new, cost efficient hospital on the Domain would be opening shortly if government had not stood in the way back in 2014. Greg Barns is a human rights lawyer. He has advised state and federal Liberal governments.