Inquiry to scrutinise healthcare funding amid escalating ‘crisis’ across states

The Special Commission of Inquiry into Healthcare Funding will commence its public hearing in Sydney today. NSW’s top health officials have underscored the pressing need for a fundamental transformation in the state’s healthcare system. Chief Health Officer Kerry Chant, alongside senior NSW Health figures Dr Nigel Lyons and Deb Wilcox, delivered a stark warning, highlighting the increasing strain on public hospitals, particularly due to the shortcomings of aged care and primary care services.

Their joint report, a response to the Inquiry, unveiled a concerning trend where public hospitals are becoming the last resort for patients who have been failed by aged care and primary healthcare systems. It emphasised the need for a significant shift in focus towards out-of-hospital services and preventative care. The report foresees a significant surge in conditions associated with ageing, such as communicable diseases more severe in the elderly, which are expected to contribute to 15% of major health system activities by 2032, up from 8% in 2019. Moreover, demands for services treating diabetes and mental health conditions are projected to soar.

Projections from NSW Health’s Future Health report, released last year, also paints a worrisome picture. By 2032, if the current care model persists, the health system could experience a 1.7-fold increase in activity. Notably, individuals aged over 65 are anticipated to account for a staggering 45% of healthcare activity.

Dr Lyons, Special Advisor, NSW Health, and Ms Wilcox, Deputy Secretary, Health System Strategy and Patient Experience, stressed the limitations imposed by the National Health Reform Agreement (NHRA).

“The NHRA Addendum restricts growth funding under this agreement in any one year to a national 6.5% growth cap. This cap should be removed to ensure more equitable sharing of risk and to enable a timelier movement of the Commonwealth share of public hospital funding to 45% [from the current 40%].

“Integrated funding models to support care in the community need to be fast-tracked, with a more blended funding model moving away from a reliance on activity-based funding in dominating decisions on budget allocations at the state level. This would assist in enabling the delivery of different models of care and provide more scope for innovation,” they said in the report.

The pressing need for healthcare reform is further underscored by the ongoing healthcare crisis in other states, including Queensland. Last week’s deaths of two individuals amidst ambulance ramping incidents prompted a $20 million, five-point plan by Queensland Health to address the issue.

The plan aims to bolster resources, including the recruitment of more triage nurses, creating a “medical commander” role in hospitals to manage patient flow, and expanding rapid access clinics and surgical assessment units. The emphasis lies on enhancing healthcare accessibility and streamlining patient care pathways to alleviate the strain on emergency departments.

As QLD Health Minister Shannon Fentiman pledged immediate action, acknowledging the complexity of the challenges faced, it is evident that a multifaceted approach and systemic reforms are imperative to tackle the burgeoning pressures faced by the state.

The NSW Healthcare Funding Inquiry, promised during the state election, was announced by Health Minister Ryan Park in August, with findings expected by August 2024.

Receiving more than 160 submissions, including submissions from Local Health Districts, Medical Technology Association of Australia (MTAA), Edwards Lifesciences, Pharmacy Guild Of Australia, Private Healthcare Australia and Honeysuckle Health, the inquiry will investigate current funding arrangements in NSW, how they relate to the quality and accessibility of healthcare, patient and staff experiences, as well as different models of service delivery.

The MTAA highlighted that NSW Health has yet to fully embrace value based healthcare. Cost cutting without a value-based healthcare model will result in worse patient outcomes and unanticipated expenditure increases through knock-on effects.

“That is why it is a strong recommendation from the MTAA that all stakeholder groups have a seat at the table to enable the shift to value based healthcare including the medtech industry, physicians, patients, providers, payers, policy makers, and procurement leaders. A value-based healthcare approach, particularly when coupled with appropriate digital health initiatives, can deliver better models of care that are provided in a timely way in the right setting, rather than waiting for costly hospital admission,” MTAA said in its submission.

The Edwards Lifesciences submission pointed to NSW lagging the rest of the country and comparable healthcare systems in adopting innovative health technologies such as the Transcatheter Aortic Valve Implantation (TAVI) for heart valve disease.

“In NSW, the waitlist for TAVI varies from 3-4 weeks in the private sector to upwards of 6-12 months in the public sector. Based on the average waiting time per hospital, we estimate that up to 28% of patients die while waiting for a TAVI at Australian public hospitals, in 2022 in NSW, this translates to between 9 and 59 deaths,” Edwards Lifesciences wrote in its submission.

“Given the ageing population, increasing comorbidities and workforce challenges, it will be increasingly important to work as one system, engaging effectively with partners, both across governments and with non-government organisations, the private sector and communities. Ensuring equitable access to healthcare and supporting a healthy and well community requires considerable action outside of Health,” Dr Chant, Dr Lyons and Ms Willcox stated in the joint Inquiry report.

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