Revealed: Tassie’s $2b health rip-off

No doctor, nurse or bureaucrat can fix the underspending, says Martyn Goddard

IN all the furore over hospital resourcing, one thing tends to be missing. Detail.

The State Government claims it funds hospitals adequately, compared to the rest of the country, and that there have been no funding cuts. Hospital staff and many patients ask why, if this is the case, the system is so obviously overwhelmed.

Day-to-day recurrent public hospital funding comes from many sources – the Commonwealth, states, GST, private insurance, workers’ compensation, accident insurance and patients’ own outof-pocket charges.

In the current debate the important questions to ask are: does the State Government’s contribution match up to other states? How much do patients contribute through their own insurance? And how does all this match up with the real needs of the nation’s oldest, sickest and poorest population?

Figures for 2017-2018 from the Australian Institute of Health and Welfare, the most recent data, show the Tasmanian Government put in $581 million from its own resources, which include the GST. That was 46.9 per cent of the total compared with a national average of 51.8 per cent. This represents a shortfall of $60.3 million in that year alone. Unusually, the Commonwealth put in more than the state. The federal contribution was 47.4 per cent, compared with 39.4 per cent for all states and territories. There are two reasons for this. One is relative underfunding of public hospitals by the Tasmanian Government. The other is the very high number of private patients treated in public hospitals. At least 22 per cent of admitted patients are private, about double that of other states. In 2017-2018 the Commonwealth contributed $9 million for these patients in health insurance subsidies and $14 million for veterans. Another $26 million came from private health insurance and $20 million in out-ofpocket costs for patients. A further $26 million came from workers’ compensation and accident insurance.

If Tasmania’s population had the same needs for hospital care as other Australians, the $60 million below-average State Government contribution would not be so important. After all, the total recurrent costs in that year were $1.24 billion. A much more important question is whether our much greater-thanaverage needs are being met.

The Commonwealth Grants Commission, which doles out the GST, makes sure every state is equally able to provide services. First, it redistributes money from rich states (like NSW) to poor (like us) to put us on an equal footing. Then it looks at the differing needs of each state for government services such as health. Because our government needs to spend more, the Grants Commission gives it more. We got an extra $267 million in 2017-2018,

$299 million in 2018-2019 and $321 million this year.

If that was being spent on health and hospitals, the State Government’s contribution would be much higher than the average, not lower. Adding the two tells you the amount in GST we were given for health but failed to spend.

It happens every year. Since the Hodgman Government came to power in 2014, that total short-changing of health and hospitals amounts to about $2 billion. That’s the problem. No doctor, nurse or bureaucrat can change it. And the Government won’t.