Hospitals get a boost – Medicare gets chopped


There was good news and bad news from two recent government budgets. While NSW hospitals get more money and more beds, the federal government takes a knife to Medicare and the Pharmaceutical Benefits Scheme.

After a decade of closing beds and allowing services to struggle, the NSW government is finally putting serious money into investment in health.

The recent State budget allocated an extra $472 million to relieve pressure on emergency departments and elective surgery waiting lists and to reopen 800 hospital beds.

The news from the recent federal budget was less encouraging. The Howard government took more money from poor and chronically ill patients by cutting Medicare and the PBS (see box).

The state government’s extra health spending was sorely needed. According to NSW Health, 26% of emergency patients waited eight hours or more for a bed during March this year.

NSW Health Minister Morris Iemma said there were 4,194 more patients admitted from emergency departments to hospital wards in the 12 months to March 2005 compared to the same period in the previous year.

The overall health budget for 2005 totalled $10.9 billion in recurrent (non- capital works) spending, an increase of almost $1 billion or 9% over 2004.

Key features of the 2005-06 NSW health budget include:
Hospital beds

  • Funding for 345 additional permanent acute and sub-acute beds over the next 12 months, ‘subject to the availability of nursing and medical staff’.
  • Permanent funding of 200 winter beds which opened last year. These will now stay open year round.
  • Funding for 221 additional permanent beds, effective from May 2005.
  • $25 million to fund a total of 57 new intensive care beds, including 20 new adult intensive care beds, 30 neo-natal intensive care and special care cots, and seven paediatric intensive care beds and ‘step down’ ventilated beds.

Mental health
Mental health services get $854 million, an increase of $71 million (9.1%) over 2004-05.

Enhancements to be funded this year include:

  • $1.4 million for the commissioning of a new 20-bed non-acute unit at Campbelltown Hospital (construction commenced in March).
  • $2.5 million for a 15-bed psychiatric intensive care unit at Hornsby Hospital.
  • $2.5 million for 16 acute beds at Dubbo (increasing to $3.2 million in 2006-07).
  • $8 million to expand the Housing Accommodation Support Initiative to provide medium-to-high-accommodation support places operated by non-government organisations.
  • $4 million for an integrated statewide child and adolescent mental health service encompassing emergency assessment, supported beds in local hospitals, and step-up/step-down day centres linked to tertiary hospitals and community facilities.
  • $1.9 million for workforce development programs including support to universities for mental health nursing development.

The budget expands the Psychiatric Emergency Care unit program. It will permanently fund the pilot PEC units at Liverpool and Nepean hospitals and create PEC units at St George, St Vincent’s and Hornsby hospitals.

Services re-design
The budget allocates $19.7 million to initiate a clinical services redesign program. According to Minister Iemma, ‘This program will ensure that administrators work closely with clinicians and patients, resulting in improved patient treatment and creating better working environments.’

An extra $10 million for the NSW Ambulance Service to recruit more than 100 new staff and lease 22 new vehicles in the metropolitan area.

Dearer drugs and more holes in the safety net

Australians will have to spend hundreds of dollars a year more on visits to the doctor and medicines before they qualify for the Pharmaceutical Benefits Scheme and Medicare safety nets.

The recent federal budget slugged concession card holders by reducing the number of free prescriptions.

It also broke the federal government’s ‘rock-solid, iron-clad’ election promise not to raise the Medicare safety net threshold.

From January next year general patients will have to spend around $957 (up $82) a year on medicines before they qualify for lower rates under the PBS.

Pensioners and concessional patients will have to spend over $255 annually (up $16) on medicines before qualifying for free scripts.

Calcium supplements will be removed from the PBS which means the elderly will have to pay $13 every two months for their tablets instead of $4.60 now.

With higher Medicare safety net thresholds, out-of-pocket medical expenses for low income earners will be lifted from $500, up from $300, before the government picks up 80% of the tab.

The government backed away from its plan to slash Medicare funding for IVF but Health Minister Tony Abbott promised to ‘review’ the issue later.