Chronic underfunding of Western Australian regional Hospitals raises questions about their readiness to cope with an imminent flu pandemic.
There are unconfirmed reports that the Western Australian Country Health Service, the division of the WA Health Department responsible for managing regional Hospitals, has been chronically underfunding Hospitals under its control. While demand for services has been increasing in some regions by more than 10 percent, WACHS routinely chooses to increment its budgets by a mere 5%, and also deducts the previous year’s deficit from the following year’s funding allocation. The result is chronic and compounding budget deficits at a time when the Health Service is facing a flu pandemic.
Foundation Professor of Health Economics at Monash University, Professor Jeff Richardson was scathing about the funding policy, when asked whether this was a valid method of funding health services.
“It is reasonable to seek efficiencies in health services, but this sort of funding practice is really an admission that they don’t know how to achieve efficiencies in any rational way, so they simply cut the budget,” Professor Richardson said. “We have had bureaucrats adopting extremely simplistic and I think quite damaging policies. I think they see their job as cutting taxes, and that, from a social point of view, is a pretty mindless policy, and a dangerous policy, if they don’t have evidence that it won’t undermine quality of services.”
When asked about the policy of deducting the previous years inevitable deficit from the following years equally inadequate budget, Professor Richardson was blunt. “Well that’s crazy. They may be given an incentive to save a few pennies here and there, but that is not offset against the damage. The trouble is they are aware of all the pennies they save, but they are not aware of the consequences, because they are not collecting data on the resulting damage. It’s just bad policy.”
“This sort of budgeting practice is foolish, and I don’t think anyone in their right mind would do it with full information. People I think are probably responding to immediate Ministerial pressures, probably from the Treasury, setting a target for the year of X, and we don’t care how you achieve that target, so people are responding to very narrowly based incentives, and long term, its damaging.”
“Queuing can go up, length of stay can go down, the quality of services can go down,” said Professor Richardson, citing some of the indicators of the damage to which he was referring.
The Minister for Health was approached for comment, but did not respond.
The Department of the Premier and Cabinet did not respond to our questions, but offered only general comments about the budget policy for the Health Department overall.