Fewer NDIS patients languishing in hospital saves up to $550m

Sydney Morning Herald, 12 February 2023

The average length of time NDIS patients spent in hospital beds awaiting discharge was slashed by four months last year, cutting up to $550 million in health spending after new measures were implemented by the federal and state governments.

The “exit block” problem in public hospitals – where patients who need disability or aged care in the community stay in hospital for weeks because they cannot be moved out safely – still costs the health system billions of dollars each year, and the Health Services Union (HSU) on Sunday said the block was pushing emergency departments to breaking point.

An analysis published by the Australian Medical Association (AMA) last week found between $205 million and $548.8 million in health spending was saved between June and November last year, after a new agreement on hospital discharges for NDIS-eligible patients was struck between the Commonwealth and state and territory governments.

The time National Disability Insurance Scheme participants were left languishing in hospital beds when they were medically ready to leave was slashed from an average of 160 days to 36 under the new system.

The new measures boosted the number of staff involved in hospital discharges in each state, developed patient transition plans and improved data collection, while the National Disability Insurance Agency committed to contacting every NDIS participant within four days of being notified they were admitted to hospital.

The millions in savings have been celebrated by NDIS Minister Bill Shorten, who is reviewing the multibillion-dollar scheme to restore trust and slash waste while his government also seeks to reform the health system.

In June last year, before the new measures were in place, there were 1433 NDIS-eligible patients in public hospitals, and they spent an average of five months waiting for adequate supports to be put in place so they could leave.

That cost the health system between $253.8 million and $679.4 million, according to the AMA analysis, which used data obtained through the NDIA.
By November, however, there were 1224 NDIS-eligible patients in public hospitals waiting an average of 36 days to be discharged with appropriate supports, which cost between $48.8 million and $130.6 million.

The AMA said the health system would save between $495 million and $1.32 billion annually if the plan continued to be effective.

Shorten said the improvements demonstrated Labor was meeting its commitment to “get the NDIS back on track” amid warnings the scheme would cost $50 billion per year in 2025-26.

The daily cost of keeping someone in a hospital bed was between $1107 and $2963, he said.
“Languishing in the wrong setting is not only detrimental to the wellbeing of the person with disability but is a shocking cost for state hospital systems. There are no winners,” Shorten said.

When hospital beds are occupied by people who are otherwise medically fit to be discharged, there is less capacity for new patients and therefore waiting times are longer for ambulances, emergency department services and essential elective surgeries.

While the AMA report recognised there had been improvements for NDIS-eligible patients, it said more targeted programs to address the exit block – particularly for aged care patients – could save up to $2.17 billion a year.

“Public hospitals cannot afford to keep operating at this level of exit block, particularly as our public hospitals already have limited capacity and are struggling to meet demand,” the report said.
“The Commonwealth and state and territory governments need to work together to refine the current arrangements around transitioning people out of inpatient wards into appropriate care.”

The HSU on Sunday also released a report calling for reform of a “fragmented health system at breaking point”.

The union blamed the blow-out of emergency department wait times on an underfunded primary care system as well as failures in delivering aged care and disability services, which led to people staying in hospital longer than necessary.

“We can identify billions of dollars worth of spending that needs to be properly scrutinised and probably redirected to have more impact,” HSU national president Gerard Hayes said.

“I encourage all politicians to read this report and then tell us if they were designing the health system from scratch whether it would look like this. I’m certain the answer is no.”

Prime Minister Anthony Albanese last month said the country’s struggling health system was the top priority for both the Commonwealth and state governments this year.

The states have been pushing for more hospital funding and a Medicare overhaul to improve access to GP services as their emergency departments come under strain.

The Albanese government has committed to reforming the 40-year-old universal healthcare system but has repeatedly warned it will take more than one budget, with only $750 million currently allocated to strengthening Medicare over the next three years.