Unpacking the budget health spend

It’s worth taking a closer look behind the headlines announced in the state budget to sort out the truth behind the flashy figures, says Martyn Goddard

A$10.7bn investment in health, $900m more than last year. An extra 29,300 elective surgeries. Another 50 hospital beds. New computer systems.

Every budget is accompanied by a flood of press releases with flashy figures and inspiring initiatives. They always provide glowing headlines for the government of the day, and they always mislead. Political spin occurs whoever is in power but trickiness at this level is unprecedented.

The $900m figure was widely reported but little understood. It doesn’t mean the government will spend $900m more this year than it did last year. The actual increase is only $112m. They get to $900m by adding up the amount the new budget promises to spend over 202122 to 2024-25, and comparing it with the amount the previous budget promised over 2020-21 to 2023-24.

Both of those are projections, not actual spending. So the minister’s press release is comparing one set of estimates that may never have happened with a second set that may not happen either. It’s meaningless.

Then there’s the elective surgery blitz, the fifth in a decade. The government promises to provide an extra 29,300 surgeries and endoscopies between now and mid-2025, an extra 50 beds, and funding of $746m over four years and $204m this year.

But total funding for the whole health portfolio is only $112m more than the amount in last year’s budget. So where is the extra $204m coming from? Either the money will not be spent – and we’re already two months into the financial year – or there will be cuts in other areas. Which ones? The government does not say.

Then there are the extra beds, 50 of which are promised this year. From what can be deduced from Health Department documents, most of these will not be directly relevant to elective surgery. At the Royal Hobart Hospital, for instance, approval has been given for another 12 intensive care beds. But few elective surgery patients ever need an ICU. And where are the staff coming from? ICU doctors and nurses need high levels of skill and experience. The Australian Nursing and Midwifery Federation says Tasmanian hospitals are relying on a worrying proportion of relatively inexperienced nurses to keep present ICUs going.

The elective surgery plan promises to recruit “up to” 280 extra full-time equivalent staff. But the national pool of doctors, nurses, paramedics and allied health professionals is finite. New people joining are largely balanced by others leaving. And every state is trying hard to recruit.

So why would they come to Tasmania rather than to anywhere else in the country? Certainly, our current Covidfree status makes us potentially more attractive. On the other hand, the Australian Bureau of Statistics reports that 26 per cent of employers in the healthcare and social assistance industry nationally were having difficulty finding suitable staff. Economist Saul Eslake says it was “at least partly because of the border closure”. And that was in June, before the current lockdowns began.

Nurses comprise about half of all health staff, so the government’s promise to expand the workforce by 280 implies an extra 140 nurses. But on average, 2 to 3 per cent of nurses resign every month. That’s around a thousand a year. Across the state, there are some 200 vacant nursing positions.

Add it up. That means 1340 extra full-time equivalent nursing positions will have to be recruited if the system is to run effectively and the government’s promises are to be kept. Overtime and double shifts have seldom been higher, so the present workforce cannot do any more than they already are.

On average, the number of Tasmanians needing hospital admission rises by about 4 per

cent a year but, over a decade, bed numbers have risen by only 2.4 per cent a year.

We would need about 400 extra beds just to restore the capability we last had in 2010.

As overcrowding in our hospitals increases, efficiency plunges and per-patient costs soar. Two major infrastructure projects are under way – redevelopment of the RHH and LGH. For the LGH, only $25m is allocated this year out of an estimated total cost of $667m. And at the end of the four years covered by this budget only $78m, or 12 per cent, will have actually been allocated.

At the RHH, 44 per cent of the announced total will be spent by 2025 – but much is missing. The budget doesn’t mention the critically urgent second campus on the former Repatriation Hospital site. That’s still in the 30-year wishlist. Perhaps, by 2050, we’ll see something.