National Cabinet endorses hospital funding overhaul as surgery waiting lists skyrocket beyond 850,000

MedTech & Diagnostics News: National Cabinet met in Canberra yesterday to make progress on key health reforms. National Cabinet endorsed Commonwealth increasing National Health Reform Agreement (NHRA) contributions to 45% over a maximum of a 10-year glide path from 1 July 2025, with an achievement of 42.5% before 2030.

The NHRA governs annual health expenditure of about $66 billion for a public health system that delivers services to millions of Australians. October statistic from the Australian Institute of Health and Welfare (AIHW) unveiled a significant decline in the Commonwealth’s share of public hospital funding, plummeting to a concerning 41%.

“Health was National Cabinet’s top priority for 2023 and First Ministers remain committed to addressing the pressures facing our health system,” said Prime Minister Anthony Albanese.

However, concerns surfaced regarding the transparency of the NHRA review process, where “a targeted invitation” was made to stakeholder groups and no interim report was released.

Australian Medical Association President, Professor Steve Robson, welcomed the increase in Commonwealth contribution to public hospital funding.

“We’ve seen the release of Australian Institute of Health and Welfare figures showing that, against all measures, our public hospitals are struggling and planned surgery (elective surgery) waiting lists have soared past 850,000. People are quite literally dying before they get the surgery they need,” he remarked.

Additionally, National Cabinet endorsed the current 6.5% funding cap being replaced by a more generous approach that applies a cumulative cap over the period 2025-2030 and includes a first year ‘catch up’ growth premium.

“We also campaigned for the Commonwealth to scrap the arbitrary 6.5% cap on funding growth and we’ve seen a commitment to change that and apply a more generous approach. We are yet to see the detail, but we are hopeful this is the start of an overhaul to a funding agreement that also lacks any kind of performance measures,” Professor Robson emphasised.

Additional outcomes from the National Cabinet meeting included a $1.2 billion package of Strengthening Medicare measures to take pressure off hospitals, including a boost to urgent care clinics.

Concurrently, revisions to the National Disability Insurance Scheme (NDIS) were endorsed to enhance patient support and save the scheme from collapsing. The rates will be increasing from 4% in line with the scheme’s growth and is capped at 8%. The Commonwealth will pay the remainder of the scheme’s costs growth which is set to commence from July 1, 2028. Funding will be agreed through the new Federal Funding Agreements and additional costs will be split 50-50.

“The Commonwealth agreed to an additional expenditure for states and territories on new foundational disability services to ensure that the combination of the health costs and disability costs will see all states and territories better off,” Prime Minister Albanese said.