Hospitals in city's west fear Rudd's changes

SMH
JULIE ROBOTHAM AND KATE BENSON March 19, 2010

STRUGGLING western Sydney hospitals, already among the most cash-strapped in the state, could stand to lose about $130 million in funding under the Prime Minister's hospital reform plan, NSW Health Department analysis suggests.

The area's high and growing population, combined with its relatively lower per-capita provision of hospital beds and services, would mean that it would be disadvantaged under such a formula, according to figures circulated to doctors.

As nurses from the Sydney West Area Health Service yesterday demonstrated against long-term staff freezes which they say are compromising patient care, the departmental calculations show that any shift to so-called activity-based funding could force the area's hospitals to take a further hit.

Under the modelling - based on the 2008-09 financial year and conducted to predict the consequences of activity-based funding - Westmead Hospital, the state's largest, would be worst affected, losing $83 million a year.

The formula sets a fixed price for individual types of treatment and that fee is paid for every patient actually treated. Under the version proposed by the federal government - about which the Premier, Kristina Keneally, has expressed the strongest doubts of any state leader - a uniform "efficient price" would be set nationwide, and Canberra would provide 60 per cent of this directly. Hospitals are now funded mainly under block grants negotiated with NSW Health.

But Patrick Cregan, the chairman of NSW Health's Surgical Services Taskforce, said the concept was inherently prejudiced against hospitals serving larger populations, because emergencies represented a higher proportion of their work. This in turn meant they could not perform elective procedures in sufficiently high numbers to reap economies of scale that would allow them to reduce their costs.

Hospitals that treat patients more cheaply benefit under the model, because they can keep and reinvest the difference between their own expenditure and the higher fee reimbursed by government.

Dr Cregan said this would entrench the position of well-resourced centres of excellence in affluent areas, and further reduce hospital access in western Sydney. "That sort of inequity is going to be locked in," he told the Herald.

"You can't gear up [to do large numbers of elective procedures]. Hospitals are going to lose money, and potentially lots of money."

More than 800 nurses rallied outside seven hospitals in western Sydney yesterday to protest against unsafe staffing levels, including one maternity unit which cannot find midwives for more than 420 shifts this month.

Nepean Hospital, where about 4300 babies are born each year, needs another 20 full-time midwives to fill shifts on the antenatal, postnatal and delivery wards, and in the neonatal intensive care unit. ''We will have a death there soon because it is hugely unsafe,'' said Sally Tracy, a professor of midwifery research at the University of Sydney. ''There is huge dissatisfaction. Midwives do not want to work there.''

More than 120 people at the Lithgow rally were told about half its hospital beds were shut due to staffing shortages.

''I've been in the health system for 30 years and this is the worst I have ever seen it,'' said union representative Marny Thomas. The opposition health spokeswoman, Jillian Skinner, said ''nurses were fed up to the back teeth''. The rally at Nepean Hospital was told there were about 30 nurse vacancies but the NSW Health website admitted to only three, she said.