Expiry of COVID funding raises fears of hospital service cuts

  • Published December 12, 2022

Sydney Morning Herald, 12 December 2022

Doctors and other health workers fear the end of extra federal health funding for COVID-19 testing and hospital care will result in cuts to other health services and PCR testing rates.

The Australian Medical Association and the country’s powerful Health Services Union are concerned about the federal government’s withdrawal of national funding for COVID-19 services at the end of this month, saying it will put more pressure on already stretched state health budgets. The federal government extended the National Partnership on COVID-19 Response in June at a cost of about $760 million and this is due to expire on January 1.

AMA NSW president Michael Bonning said the federal government plan to withdraw the extra funding for COVID-19 testing and hospital care from January 1 would reduce state government funding for other health services, to make up for the shortfall.

“At a time when we are seeing a rise again in COVID cases and increasing demand for hospital services we see a removal of funding as a step backwards in terms of being able to deliver health care services appropriately,” he said.
University of NSW immunology professor John Dwyer said it was essential for COVID-19 testing to be maintained to keep track of infection rates and inform hospital planning.

“I think we need to maintain the current level of testing,” he said. “The ultimate barometer is whether our health system can handle the situation.

“We can’t fly blind on this. To close our eyes and just suggest we have got to live with this, it’s not that bad, would be a very foolish thing.”

A spokeswoman for NSW Health Minister Brad Hazzard said: “the federal government has made it clear it won’t continue the funding”.

“Minister Hazzard’s concerns are no different to those of other states and territories. Any reduction in funding will have implications on state budgets around the country,” she said. “But PCRs can still be undertaken at GPs and the cost will generally be picked up by Medicare.”

Hazzard said that he and other states were in ongoing conversations with federal Health Minister Mark Butler who has been “receptive and understanding of our concerns”.

“I think it would be helpful if the current funding arrangements continued,” he said. “Hopefully, they will find a way to agree on a model that works for everybody going forward.

“If it did turn out that the federal government didn’t want to continue the 50/50 arrangement for COVID [funding] then obviously there are implications for the health system in NSW which is already under pressure.”
A spokeswoman for Butler said the federal government “is finalising COVID arrangements and will communicate widely with the states and sector once a decision is made”.

Health Services Union national president Gerard Hayes, who has called for a royal commission into the distribution of health funding, said the federal government should maintain its commitment to COVID-19 testing and hospital care to prevent states having to cut other services.

“For Labor to withdraw the funding now in my view would not be maintaining the due diligence that is required,” he said.

Professor Dwyer said it would be premature for the federal government to pull out of its funding commitment.

“If those funds are withdrawn, I would be encouraging the states that they must take up the slack,” he said.

Professor Dwyer said the vaccination rate for young people was very poor and about 40 per cent of eligible people have not yet had a third shot. Hospitals also have to cope with “the tsunami of people developing long COVID”.

Mike Toole, an epidemiologist from the Burnet Institute in Melbourne said reduction of federal funding for COVID services was a “very bad idea” when infection rates were surging and vaccine booster rates had stalled.

“We are very vulnerable in relation to immunity and cases keep going up,” he said. “Dropping the federal funding support for PCR testing and hospital care will make the job of states and territories much much harder.”

A Victorian government spokesperson said it was working with other states, territories and the Commonwealth on funding reform to address the costs of COVID, deferred care and the ongoing cost of the public health response, to manage any future risk to the delivery of critical health services.
“With a one-in-one hundred year pandemic and unprecedented demand on our hospitals there needs to be a fit-for-purpose funding model and cost sharing arrangement, not one where the Commonwealth will only fund 45 per cent of hospital funding growth and cap their funding increases at 6.5 per cent each year,” the spokesperson said.