Union says NSW health system ‘at breaking point’ and calls for royal commission into funding

The Guardian, 12 February 2023

Report commissioned by Health Services Union is scathing of failure to invest in community and preventative healthcare

The Health Services Union has called for a royal commission into New South Wales’ funding for health and hospitals, claiming in a new report that the system is “at breaking point” because it incentivises unnecessary or expensive procedures, rather than primary or preventive healthcare.

The report, prepared for the HSU by Impact Economics and Policy, says the “fragmented” nature of the health system intrenched inequality and did not produce the best outcomes for the money spent.

It is particularly scathing of the state’s failure to invest in community and preventive healthcare, which the report says ultimately costs the state via avoidable hospitalisations. 

It says that from 2012-13 to 2017-18 there was a 25% increase in preventable admissions to NSW hospitals, costing the system more than $1.1bn a year.

At the same time, the report claims NSW spends $100 less a person than the Australian average on preventive and community health care – “a funding shortfall of $872 million per year on services that could prevent illness and hospitalisations”.

“While state premiers and doctors’ groups call for more resources to meet the additional demand (from the Covid pandemic), it is important that any responses reflect that the current crisis is not just about a lack of funding, but is driven by how that funding is being spent,” the report said.

Other findings include:

  • 10% of people in NSW waited more than two hours after calling for an ambulance from July to September;
  • Patient complaints about healthcare services have increased 40% since the start of the pandemic, and 144% since 2011-12;
  • 1,000 hospital beds in NSW are occupied by people staying longer than recommended who could be in aged care or are NDIS participants, costing about $500m a year;
  • Overservicing is a significant problem. For example, half of all babies born in private hospitals are delivered by caesarean section, three times the rate recommended by the World Health Organization;
  • Half of almost 4,500 Health Services Union workers surveyed said they were considering leaving the profession within the next five years.

“Emergency department wait times have blown out not because there is an underinvestment in emergency departments, but because the funding of primary health care does not prioritise keeping people healthy in the community,” the report says.

The HSU NSW secretary, Gerard Hayes, said the case for a royal commission was “overwhelming”.

“Our health system needs to be fixed … but before we apply treatment we need to properly diagnose the illness and this report lays the groundwork for a royal commission,” he said.

“Ambulance ramping and emergency wait times are obviously deeply concerning. These are symptoms of a deeper malaise that needs to be addressed.

Hayes said healthcare providers were often incentivised to provide “expensive procedures that boost their earnings” but do not benefit the wider community.

The report says general practitioners are “disproportionately located in high-income areas where there are lower health needs, but greater financial rewards”.

Hayes said the system was “just completely out of whack”.

“We can identify billions of dollars worth of spending that needs to be properly scrutinised and probably redirected to have more impact.”

NSW Health said in a statement its priorities were “to keep the people of NSW healthy and well, and to deliver excellent experiences and outcomes of care”.

“The NSW public health system is recognised as one of the best in the world, providing safe, high-quality care. Our population is also considered amongst the healthiest in the world,” the department said.

“NSW Health acknowledges the Covid-19 pandemic has had a significant impact throughout its health system, as it has done in health systems across Australia and the world.

“Advances in technology, ongoing investment in preventative health and innovative models of care present us with excellent opportunities to build an even stronger, more flexible, patient-centred health system in NSW.”