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Title: Hospitals - Efficiency and administration - Royal Commission of Inquiry - Interim Report, dated 30 June 1980
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Date: 26-08-1980
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Hospitals - Efficiency and administration - Royal Commission of Inquiry - Interim Report, dated 30 June 1980

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The Parliament of the Commonwealth of Australia

EFFICIENCY A N D A DM INISTRATIO N OF H O SPITA L S

Royal Commission o f Inquiry

Interim Report June 1980

Presented by Command 26 August 1980 Ordered to be printed 11 September 1980

Parliamentary Paper N o. 181/1980

' â . · â · ' . " . ' ' ‘ ,« , t 6 Î¯ I Î '! / · ' v <’ \ Î¯ ^ ' â - · ' r

; t , 1 f i y " 1 \ *

S@ i£16#

COMMISSION OF INQUIRY INTO THE

EFFICIENCY AND ADMINISTRATION OF HOSPITALS

I N T E R I M R E P O R T

JUNE 1980

A u s tr a lia n Government P u b lis h in g S e rvice Canberra 1980

ISBN 0 642 04910 6

P rin te d by C .J . Thompson, Commonwealth Government P r in te r , Canberra

Your E x c e lle n c y ,

In accordance w ith L e tte r s P a te n t dated 6 March 1980, I have th e

honour to p re s e n t to you th e In te rim R eport o f th e Commission o f In q u iry

(in to th e E f fic ie n c y and A d m in is tra tio n o f H o s p ita ls .

I have th e honour to be s i r ,

Your E x c e lle n c y 's most o b e d ie n t s e rv a n t,

J.H . JAMISON

Chairman

H is E x c e lle n c y S ir Zelman Cowen,

A .K ., G .C .M .G ., G .C .V .O ., K . S t . J . , Q .C .,

G overno r-G e n eral and C om m ander-in-C hief,

Government House,

(CANBERRA. A .C .T. 2600

( i i i )

Your E x c e lle n c y ,

In accordance w ith L e tte r s P a te n t dated 13 A p r il 1980, I have the

honour to p re s e n t to you the In te rim R eport o f the Commission o f In q u iry

in t o th e E f fic ie n c y and A d m in is tra tio n o f H o s p ita ls .

I have th e honour to be s i r ,

Your E x c e lle n c y 's most o b e d ie n t s e rv a n t,

J.H . JAMISON

Chairman

H is E x c e lle n c y The Honourable S ir S ta n le y C harles B u rb u ry,

K .C .V .O ., K .B .E .,

Governor o f Tasmania,

Government House,

HOBART. TAS. 7000

(v)

· ' "

Your E x c e lle n c y ,

In accordance w ith L e tte r s P a te n t dated 17 A p r il 1980, I have the

honour to p re s e n t to you th e In te rim R eport o f th e Commission o f In q u iry

in t o th e E f fic ie n c y and A d m in is tra tio n o f H o s p ita ls .

I have th e honour to be s i r ,

Your E x c e lle n c y 's most o b e d ie n t s e rv a n t,

J.H . JAMISON

Chairman

H is E x c e lle n c y Commodore S ir James M axwell Ramsay,

K .C .M .G ., C .B .E ., D .S .C .,

Governor o f Queensland,

Government House,

BRISBANE. QLD. 4000

( v i i )

Your E x c e lle n c y ,

In accordance w ith L e tte r s P a te n t dated 6 March 1980, I have the

honour to p re s e n t to you th e In te rim R eport o f the Commission o f In q u iry

in t o th e E f fic ie n c y and A d m in is tra tio n o f H o s p ita ls .

I have th e honour to be s i r ,

Your E x c e lle n c y 's most o b e d ie n t s e rv a n t,

J .H . JAMISON

Chairman

H is E x c e lle n c y A ir C h ie f M arshal S ir W allace K yle ,

G .C .B ., K .C .V .O ., C .B .E ., D .S .O ., D .F .C ., K . S t . J . ,

Governor o f Western A u s tr a lia ,

Government House,

PERTH. W.A. 6000

( ix )

COMMISSION OF INQUIRY INTO THE

EFFICIENCY AND ADMINISTRATION OF HOSPITALS

Mr James H ardie Jamison, O.B.E. Chairman

Dr John Samuel Yeatman Commissioner

Mr C harles W illia m Lane de Boos Commissioner

Mr F.C. Boyle S e c re ta ry

( x i)

CONTENTS

Page

INTRODUCTION 1

AUSTRALIA'S HEALTH B IL L 9

FACTORS BEHIND COSTS AND COST INCREASES 29

SUMMARY 45

APPENDICES

A Commonwealth L e tte r s P a te n t 47

B Tasmanian L e tte r s P a te nt 51

C Queensland L e tte r s P a te n t 55

D Western A u s tr a lia n Commission 59

E M in is t e r ia l S tatem ent - Commonwealth M in is te r fo r H e a lth 62

F C a ll f o r Subm issions 65

G O rg a n is a tio n s o r Persons from whom Subm issions Received 77

H Commission Survey 85

I C u rre n t H e a lth In su ra n ce and N ursing Home B e n e fit Arrangements 89

3 The D e fla tio n o f H e a lth E xp en d itures 93

K Commonwealth-State H e a lth Funding Arrangements 95

L U t i l is a t i o n S t a t is t ic s 102

( x i i i )

CONTENTS

Tables

1 Growth in H e a lth E x p e n d itu re s and Gross Domestic P ro du ct,

1968-69 to 1978-79

2 P ric e and Wage Movements in A u s tr a lia , 1968-69 to 1978-79

3 Growth In T o ta l and Per Person H e a lth E x p e n d itu re s, A c tu a l

and D e fla te d 1968-69 to 1978-79

4 M ajor Areas o f C u rre n t H e a lth E xp e n d itu re 1969-70 to 1977-78

5 I n s t i t u t i o n a l E x p e n d itu re s , 1977-78

6 N o n - I n s titu tio n a l E x p e n d itu re s , 1977-78

7 'O th e r' E x p e n d itu re s , 1977-78

8 Sources o f Funds f o r C u rre n t H e a lth E x p e n d itu re , 1977-78

9 Sources o f Funds f o r th e D if f e r e n t S ectors o f C u rre n t H ealth

E x p e n d itu re , 1977-78

10 A llo c a tio n o f Funds Between D iffe r e n t S e cto rs o f C u rre n t H ea lth

E x p e n d itu re , by S ource, 1977-78

11 The P ro v is io n o f Funds f o r D if f e r e n t S e cto rs O f C u rre n t H ealth

E x p e n d itu re , by Source, 1966-67 to 1977-78

12 Recognised P u b lic H o s p ita l E x p e n d itu re by S ta te and T e r r it o r y ,

1968-69 to 1978-79

13 Recognised P u b lic H o s p ita l C o s ts , by S ta te s and T e r r it o r ie s ,

1968-69 and 1978-79

14 Growth in C u rre n t E x p e n d itu re s on P u b lic H o s p ita ls , A c tu a l

and D e fla te d , 1968-69 to 1978-79

15 Payments by P u b lic H o s p ita ls to V is it in g M edical O ffic e r s ,

1978-79

16 R e la tiv e Share o f Item s o f E x p e n d itu re f o r P u b lic H o s p ita ls

17 R a tio s o f S t a f f to D a ily Average o f Occupied Beds,

1968-69 to 1978-79, Commission Survey

18 A u s tr a lia n P o p u la tio n , 1966 to 1978

19 Approved Beds in P u b lic and P r iv a te H o s p ita ls and N ursing Homes

20 Occupied Bed Days in P u b lic and P riv a te H o s p ita ls 37

21 P u b lic H o s p ita ls - Bed C ap acity and U t i l is a t i o n by S ta te , 38

1968- 69 and 1978-79

22 In c re a s e s in D ia g n o s tic S e rv ic e s , 1968-69 to 1978-79 40

23 Non-Labour Costs in H o s p ita ls w ith 6-50 beds and more than 42

501 beds, 1978-79, Commission Survey

H .l P o p u la tio n f o r Survey o f H o s p ita ls 85

H . 2 Payments to V .M .O .'s and T o ta l S a la rie s and Wages, 1978-79 88

I . 1 Source o f Funds 91

K . l Sources o f Funds f o r P u b lic and P riv a te H o s p ita ls , 96

1969- 70 to 1977-78

K.2 Commonwealth R e c u rre n t Payments f o r H o s p ita l S e rvice s 98

and B e n e fits , 1974-75 to 1979-80

K . 3 N u rsin g Home A s s is ta n c e , Community H ea lth Program and R e p a tria tio n H o s p ita ls , Commonwealth O u tla y s , 1974-75 to 1979-80 101

L . l In p a tie n ts T re a ted i n P u b lic H o s p ita ls , by S ta te 103

L .2 S e p a ra tio n s from P u b lic H o s p ita ls 1977-78, by S ta te 103

L .3 P u b lic H o s p ita ls - C ost per In p a tie n t T re a te d , by S ta te 104

F ig u re s

1 C u rre n t E x p e n d itu re on H e a lth , by S e c to r, 1977-78 13

2 C u rre n t E x p e n d itu re , by Item , P u b lic H o s p ita ls , years

1968-69 to 1978-79 28

(x v )

COMMISSION OF INQUIRY INTO THE EFFICIENCY

AND ADMINISTRATION OF HOSPITALS

I N T E R I M R E P O R T

To H is E x c e lle n c y S ir Zelman Cowen, K n ig h t o f th e Order o f A u s tr a lia , K n igh t

Grand Gross o f th e Most D is tin g u is h e d O rder o f S a in t M ich ae l and S a in t

George, K n ig h t Grand Cross o f th e Royal V ic to r ia n O rder, K n ig h t o f th e Most

V enerable O rder o f th e H o s p ita l o f S a in t John o f Jerusalem , one o f Her

M a je s ty 's Counsel le a rn e d in th e la w , G overnor-G eneral o f the Commonwealth

o f A u s tr a lia and C om m ander-in-C hief o f th e Defence Force.

MAY IT PLEASE YOUR EXCELLENCY

INTRODUCTION

E s ta b lis h m e n t o f th e Commission

The Commonwealth Government f i r s t announced i t s in t e n tio n to h o ld a n a tio n a l

in q u ir y in t o h o s p ita ls in May 1979. Mr J .H . Jamison, O.B.E. (Chairm an),

Dr J .S . Yeatman and Mr C.W.L. de Boos were subse qu en tly app ointed

Commissioners by L e tte r s P a te n t issue d under th e G reat Seal o f th e

Commonwealth o f A u s tr a lia , b e a rin g date th e s ix t h day o f March, 1980.

L e tte r s P a te n t were i n i t i a l l y issue d on 29 August 1979. These were revoked

on th e acceptance o f Mr M.R.H. Holmes a C o u rt's re s ig n a tio n as a

Com m issioner, to be re p la c e d by L e tte r s P a te n t re a p p o in tin g Mr Jamison and

Dr Yeatman and a p p o in tin g Mr de Boos to th e Commission.

A l l S ta te Governments expressed t h e ir su p p o rt fo r the In q u ir y , w ith

Tasmania, Queensland and Western A u s tr a lia is s u in g complementary

a u t h o r it ie s , th e Terms o f Reference o f which are s u b s ta n tia lly th e same as

those o f th e Commonwealth (Appendices A -D ).

The L e tte r s P a te n t s ta te th a t the Commonwealth, th e S ta te s and th e N orthern

T e r r it o r y are concerned a t e s c a la tin g e x p e n d itu re on recognised h o s p ita ls

( in c lu d in g h o s p ita ls conducted by the R e p a tria tio n Commission) and on

a s s o c ia te d and r e la te d i n s t it u t io n s and s e rv ic e s . The L e tte r s P a te n t

fu r th e r s ta te th a t the Commonwealth, the S ta te s and th e N orthern T e r r ito r y

d e s ire th a t th e h ig h q u a lity o f th e care p ro v id e d by such h o s p ita ls ,

i n s t it u t io n s and s e rv ic e s be m a in ta in e d . The Commission i s re q u ire d to

in q u ir e in t o and r e p o rt upon th e fo llo w in g m a tte rs , namely:

(1 ) fa c to rs behind the c o s ts and e s c a la tio n o f c o s ts o f h o s p ita ls and

a s s o c ia te d o r r e la te d in s t it u t io n s and s e rv ic e s ;

(2) e ffe c tiv e n e s s o f m achinery fo r d e te rm in in g o b je c tiv e s , p o lic y and

re so u rce a llo c a tio n in h o s p ita ls and a s s o c ia te d o r r e la te d

i n s t it u t i o n s and s e rv ic e s ;

(3 ) ways in which the e ffic ie n c y o f th e h o s p ita l and a sso cia te d o r

r e la te d h e a lth systems and s e rv ic e s m ight be im proved; and

(4 ) ways in which c o s t in c re a s e s in h o s p ita l and a s s o c ia te d o r re la te d

s e rv ic e s can be c o n s tra in e d ;

w ith o u t r e s t r i c t i n g th e scope o f th e in q u ir y , to g iv e p a r t ic u la r a tte n tio n

to the fo llo w in g m a tte rs :

(a) th e budgetary process f o r , and c o s t a c c o u n ta b ility o f , h o s p ita ls ;

(b) the e ffe c tiv e n e s s o f e x is tin g o rg a n is a tio n a l s tr u c tu r e s , and the

r e la tio n s h ip s between c e n tr a l h e a lth a u th o r itie s (Commonwealth,

S ta te and T e r r it o r y ) , h o s p ita l boards and managements, and m edical

and o th e r s t a f f , in c lu d in g any c o n s tra in ts a d ve rse ly a ffe c tin g

e ffic ie n c y in h o s p ita l management;

(c ) s t a f f u t i l i s a t i o n and t r a in in g , purchasing p o lic y , management

methods and a d v is o ry s e rv ic e s ;

(d) methods o f payment and c o n d itio n s o f s e rv ic e f o r m edical and o th e r

p r a c titio n e r s u sing h o s p ita l f a c i l i t i e s and o th e r associated or

r e la te d s e rv ic e s , in c lu d in g ch argin g p r a c titio n e r s fo r use o f

h o s p ita l f a c i l i t i e s and reso urces, and th e e ffe c t o f these m atters

on th e le v e l o f s e rv ic e s p ro v id e d ;

(e ) th e e f f e c t o f c u rre n t fin a n c in g methods (in c lu d in g h e a lth

in s u ra n c e ) on h o s p ita l u t i l i s a t i o n in c lu d in g th e p ro v is io n o f

m edical s e rv ic e s in h o s p ita ls ;

( f ) th e r e la tio n s h ip between community based h e a lth and re la te d

s e rv ic e s and h o s p ita ls ;

(g) th e value o f a c c re d ita tio n o f h o s p ita ls ;

(h ) e x is t in g and p o s s ib le Commonwealth/State arrangem ents f o r m eeting

o p e ra tin g c o s ts o f h o s p ita ls and a s s o c ia te d o r r e la te d s e rv ic e s , and

( i ) any o th e r m a tte rs o f s ig n if ic a n t im portance to (1 ) to (4 ) above;

w ith o u t r e s t r i c t i n g th e n a tu re o f th e recomm endations, to have reg ard to the

scope f o r r a t io n a lis a t io n o f f a c i l i t i e s , s e rv ic e s and reso urces o f a l l types

( in c lu d in g th ose p ro v id e d by th e Department o f V e te ra n s ' A f f a ir s , p riv a te

h o s p ita ls , m ed ica l p r a c titio n e r s and o th e r h e a lth -c a re p r a c titio n e r s ) and to

any b a r r ie r s to th e achievem ent o f such r a t io n a lis a t io n .

The L e tte r s P a te n t a ls o re q u ire th e Commission to p ro v id e i t s In te rim and

F in a l R ep orts n o t la t e r than 30 June 1980 and 31 December iv 8 0 r e s p e c tiv e ly ,

a lth o u g h p ro v is io n i s made fo r th e G overnor-G eneral to approve an e xte n sio n

o f tim e fo r th e F in a l R e p o rt.

These Terms o f Reference r e f l e c t th e grow ing concern o f governments in

A u s tr a lia w ith th e r is in g c o s t o f h e a lth ca re in g e n e ra l, and h o s p ita ls in

p a r t ic u la r . Three re p o rts p u b lis h e d in 1979 in d ic a te t h i s emerging

co ncern. The South A u s tr a lia n P u b lic Accounts Committee R ep ort, the

Commonwealth Department o f H e a lth 's ' R eport on R a tio n a lis a tio n o f H o s p ita l

F a c i l i t i e s and S e rv ic e s and on Proposed New Charges - A D iscu ssio n P a p e r',

and th e R eport o f th e Senate S tanding Committee on S o c ia l W e lfa re 'Through a

G la ss, D a rk ly - E v a lu a tio n in A u s tra lia n H e a lth and W elfare S e rv ic e s ' (th e

Baume R e p o rt), a l l drew a tte n tio n to th e problem s o f g e ttin g v a lu e f o r money

from h e a lth ca re s e rv ic e s . T h is concern p ro v id e s th e theme o f th e M in is te r

fo r H e a lth 's sta te m e nt to th e A u s tra lia n P a rlia m e n t on 24 May 1979,

announcing th e planned e s ta b lis h m e n t o f t h i s In q u iry (Appendix E ).

Scope o f th e R eport

The Commission has chosen to devote t h is In te rim R eport to an e xam ination o f

a spe cts o f i t s f i r s t Term o f R eference: 'f a c to r s behind th e c o s ts and the

e s c a la tio n o f c o s ts o f h o s p ita ls and a s s o c ia te d o r r e la te d i n s t it u t io n s and

s e r v ic e s '. T h is h is t o r ic a l a n a ly s is has proved to be a fa r from

s tr a ig h tfo r w a r d ta s k . The problem s in d e s c rib in g these 'c o s ts and th e

e s c a la tio n o f c o s ts ' a r is e from two m ajor fa c to r s . F i r s t , th e re have been

many im p o rta n t changes in th e h e a lth care ' in d u s t r y ' in re c e n t ye ars;

second, much o f the in fo rm a tio n sought by th e Commission in o rd e r to

document th e changing c o s t to th e n a tio n o f i t s h e a lth care s e rv ic e s , has

n o t been r e a d ily a v a ila b le . For example, in fo rm a tio n is n ot always

c o lle c te d in th e same way now as i t was te n years ago. T his la c k o f a

com prehensive, c o n s is te n t and r e a d ily a v a ila b le s e rie s o f n a tio n a l

s t a t i s t i c s on h o s p ita l and h e a lth care c o s ts has been a m ajor problem

c o n fro n tin g the Commission, and w i l l re q u ire more a tte n tio n as in q u ir ie s

proceed.

These problem s have in flu e n c e d b oth th e tim e p e rio d and th e range o f

s e rv ic e s examined in t h is R eport. Wherever a v a ila b le in fo rm a tio n a llo w s ,

the Commission has focussed on th e p e rio d 1968-69 to 1978-79. These years

embrace th e m ajor changes in h e a lth p o lic y and the p u b lic a tio n o f most o f

th e re p o rts re le v a n t to t h is I n q u ir y , as w e ll as th e s t a r t o f a m ajor

e s c a la tio n in A u s tra lia n h e a lth c o s ts . Again, where p o s s ib le , the

Commission has examined the e s c a la tio n o f the t o t a l h e a lth b i l l , made up o f

i n s t it u t i o n a l s e rv ic e s , n o n - in s t it u t io n a l s e rv ic e s and o th e r s e rv ic e

c a te g o rie s . But in some in s ta n c e s th e e xam ination has co n ce n tra te d on

fa c to rs behind c o s t e s c a la tio n in i n s t it u t i o n a l s e rv ic e s a lo n e , re c o g n is in g

th a t these re p re s e n t over h a l f o f t o t a l h e a lth e x p e n d itu re . F u rth e r

e xam ination has co n ce n tra te d on p u b lic h o s p ita l fin a n c e , s in c e th is

re p re s e n ts th e m ajor component o f t o t a l h o s p ita l e x p e n d itu re .

The Commission i s n o t in a p o s itio n to q u a n tify every fa c to r o f co st

in c re a s e , nor i s i t a b le to ran k th e fa c to rs in a f i n a l o rd e r o f

im p orta nce . I t i s a c c o rd in g ly in a p p ro p ria te a t t h is stage to make

d e f in it iv e statem ents on the 1 causes' o f c o s t e s c a la tio n o r to o f f e r

recommendations fo r fu tu re a c tio n . R athe r, t h is Report p re sen ts some o f

the in fo rm a tio n on p a s t events a v a ila b le to th e Commission from i t s

in q u ir ie s to date and some in t e r p r e t a tio n s . T h is a n a ly s is w i l l p ro vid e the

fo u n d a tio n fo r a c o n s id e ra tio n o f th e fu tu re o f A u s tr a lia 's h o s p ita l and

h e a lth care system in the Commission's F in a l Report.

The fo llo w in g s e c tio n , 'A u s t r a lia 's H e a lth B i l l ' , p re se n ts in fo rm a tio n

summ arising the A u s tra lia n h e a lth b i l l in the year 1978-79, and the growth

in th a t b i l l o ver th e preceding te n ye ars. T h is a n a ly s is g iv e s both a c tu a l

and, where a v a ila b le and a p p ro p ria te , r e a l e x p e n d itu re s . The s e c tio n a lso

examines th e changing c o s ts o f th e d if f e r e n t s e c to rs o f th e h e a lth b i l l , and

the changing c o n tr ib u tio n s o f d if f e r e n t le v e ls o f government and o f

non-government sources to m eeting t h is b i l l . Some o f th e d iffe re n c e s

between the S ta te s are a ls o examined. The s e c tio n , 'F a c to rs Behind Costs

and Cost In c re a s e s ', p ro vid e s some a d d itio n a l in fo rm a tio n on th e co s ts o f

h e a lth s e rv ic e s , b ut p r im a r ily a tte m p ts to o u tlin e some o f the fa c to rs

w hich, a t t h is s ta g e , appear to l i e behind th e e s c a la tio n in c o s ts .

A lthough some o f these fa c to r s , most n o ta b ly i n f la t i o n , are g e n e ra l to the

A u s tra lia n economy, o th e rs are more s p e c ific to th e way in which h e a lth

s e rv ic e s are p ro v id e d .

A c t iv i t i e s o f th e Commission

In i t s in q u ir ie s th e Commission has looked a t overseas e xpe rie nce o f h e a lth

care c o s ts . As in many m a tte rs o f s o c ia l p o lic y , A u s tr a lia is n o t alone in

i t s concern o ver in c re a s in g h e a lth s e rv ic e e x p e n d itu re s . Some o th e r

developed c o u n trie s have a ls o taken a t le a s t p re lim in a ry a c tio n in an

a tte m p t to curb c o s ts . For example, th e U n ite d S ta te s has in tro d u c e d some

c o n tr o ls on h o s p ita l adm issions and s ta y s , w h ile o th e r c o u n trie s have

a tte m p ted t o c o n tr o l th e s u p p ly o f s e rv ic e s . R e -o rg a n is a tio n o f s e rv ic e

d e liv e r y and fu n d in g arrangem ents in New Zealand and Canada r e s p e c tiv e ly may

c o n tr o l c o s ts th e r e , w h ile c o s ts have been k e p t down in th e U n ite d Kingdom

by t i g h t c o n tr o l o f f in a n c ia l a llo c a tio n s by th e c e n tr a l government.

A lth ou g h A u s tr a lia now has th e o p p o rtu n ity to b e n e fit from a stu d y o f the

e ffe c tiv e n e s s o f these a lt e r n a tiv e s , th e Commission c o n s id e rs th a t i t is

u n lik e ly th a t any o f them w i l l be e a s ily tra n s fe ra b le to th e A u s tra lia n

h e a lth care system.

The Commission c a lle d fo r w r it t e n subm issions by a d ve rtise m e n ts placed in

newspapers th ro u g h o u t A u s tr a lia in 1979 (Appendix F ) . In d iv id u a ls o r

o rg a n is a tio n s in te n d in g to make a subm ission were asked to a d vise the

Commission o f t h is by 19 O ctober 1979 and to lodge subm issions no la t e r than

30 November 1979. However, s in c e many o rg a n is a tio n s in d ic a te d th a t i t was

im p o s s ib le both to meet t h is d e a d lin e and to p ro v id e a s u b s ta n tia l body o f

evidence and argum ent, th e Commission c o n tin u e s to accept subm issions lodged

a f t e r 30 November 1979. A t 20 June 1980, 396 n o tic e s o f in t e n tio n and 254

n o n -c o n fid e n tia l subm issions had been re c e iv e d .

Subm issions have been re c e iv e d from government departm ents, m e d ica l,

p ro fe s s io n a l and employee o rg a n is a tio n s , p u b lic and p r iv a te h o s p ita ls ,

n u rs in g homes, community h e a lth c e n tre s , consumer o rg a n is a tio n s and

in d iv id u a l d o c to rs , h e a lth s e rv ic e a d m in is tra to rs and in te re s te d c itiz e n s

(Appendix G). A p a rt from those i t has been agreed to t r e a t as c o n fid e n tia l,

a l l subm issions a re a v a ila b le fo r p u b lic in s p e c tio n a t th e Commission's

o f f ic e s in Sydney and in s u ita b le lo c a tio n s in o th e r c a p ita l c i t i e s .

The Com m ission's p u b lic h e a rin g s have p ro vid e d a forum fo r both an

exam in a tion o f th e o p in io n s and v ie w p o in ts p resented in many o f these

su bm issions, and an o p p o rtu n ity to c o lle c t a d d itio n a l in fo rm a tio n re le v a n t

to th e Terms o f R eference. The form o f th e p u b lic h e a rin g s was o u tlin e d a t

a P ro ce d u ra l H earing in Sydney on 6 March 1980, a t which tim e th e d e s ire fo r

th e h e a rin g s to be conducted w ith a minimum o f fo r m a lity was s tre s s e d .

C onsequently, the h ea rin gs to date have been conducted w ith o u t le g a l

re p re s e n ta tio n . The Commission decided to a llo w le g a l re p re s e n ta tio n o n ly

under what i t judged to be e x c e p tio n a l circu m stan ces.

The p u b lic h e a rin g s commenced in Sydney on 15 A p r il 1980 and are p re s e n tly

planned to c o n tin u e u n t i l a t le a s t m id -J u ly 1980. In a d d itio n a number o f

h e a rin g s have been h e ld in camera to a llo w d is c u s s io n o f c o n fid e n tia l

m a tte rs . Evidence has been heard in each A u s tra lia n c a p ita l c i t y . Verbatim

tr a n s c r ip ts o f th e h e a rin g s have been made by th e Commonwealth R e p o rtin g

S e rv ic e , to whom those in te r e s te d in o b ta in in g co pies should a p p ly .

In a d d itio n to these fo rm a l subm issions and th e program o f h e a rin g s , the

Commission has re c e iv e d numerous o ffe r s o f su p p o rt from in d iv id u a ls and the

re p re s e n ta tiv e s o f in te re s te d a s s o c ia tio n s , many o f whom have o ffe re d to

p ro v id e fa c tu a l m a te ria l th a t may n ot o th e rw is e have been a v a ila b le .

D iscussion s have a ls o been h e ld w ith a number o f o rg a n is a tio n s in th e h e a lth

f i e ld . R e p re s e n ta tiv e s o f these have p a r tic ip a te d in sem inars and workshops

a t th e Commission o ff ic e s , and Commission s t a f f have a tte n d e d v a rio u s

m eetings o f p ro fe s s io n a l groups as o b s e rve rs. Such in fo rm a l m eetings,

separate from th e p u b lic h e a rin g s , w i l l c o n tin u e as th e Com m ission's

in q u ir ie s proceed.

The Commissioners have c a lle d on su ccessive Commonwealth M in is te rs fo r

H e a lth , on a l l S ta te H ealth M in is te rs and have had d is c u s s io n s w ith o f f ic e r s

o f th e Commonwealth Department o f H e a lth and a l l S ta te and T e r r it o r y h e a lth

a u th o r itie s . W hile on a p r iv a te v i s i t to New Zealand, one Commissioner had

d is c u s s io n s w ith s e n io r o f f i c i a l s o f th e Department o f H e a lth . The

Commission acknowledges the a s s is ta n c e o f a l l these h e a lth a u th o r itie s in

p ro v id in g much o f th e in fo rm a tio n presented in t h is re p o r t.

The Commission decided to become f a m ilia r w ith the processes o c c u rrin g

w ith in h o s p ita ls and to observe h e a lth s e rv ic e s a t th e p o in t o f d e liv e r y in

each S ta te and T e r r it o r y . A c c o rd in g ly , a program o f v i s i t s to h o s p ita ls and

re la te d i n s t it u t i o n s was undertaken in la t e 1979 and e a r ly 1980.

D uring these v i s i t s the Commission was s tru c k by the wide v a r ia tio n s in

w orkload and c o s ts o f i n s t it u t i o n s o f a b ro a d ly s im ila r s iz e and fu n c tio n

( f o r example in s m a ll c o u n try h o s p it a ls ) . I t was p r im a r ily t h is o b s e rv a tio n

which prompted th e Commission to undertake i t s own survey o f a sample o f

p u b lic h o s p ita ls th ro u g h o u t A u s tr a lia (Appendix H ). Some r e s u lts from t h is

survey are d iscu ssed la t e r in t h is R ep ort.

AUSTRALIA'S HEALTH BILL

The O v e ra ll H e a lth B i l l

T o ta l n a tio n a l e x p e n d itu re on h e a lth fo r th e ye ar 1978-79 was e stim a te d to

be $7950 m illio n . A p p ro xim a te ly 7 per ce n t o f t h is was c a p ita l

e x p e n d itu re . T h is t o t a l compares w ith a t o t a l h e a lth b i l l f o r th e year

1968-69 o f $1476 m il l i o n . T his re p re s e n ts an in c re a s e o f 439 per c e n t.

E x p e n d itu re on h e a lth has been grow ing a t a fa s te r r a te than t o t a l n a tio n a l

e x p e n d itu re as measured by Gross Domestic P roduct (G .D .P .) fo r most o f these

te n y e a rs . H e a lth e x p e n d itu re has grown from 5 .4 per ce n t o f G.D.P. fo r the

year 1968-69 to an e s tim a te d 7 .9 per ce n t fo r the year 1978-79. However,

h e a lth e x p e n d itu re has n o t in cre a se d a t a steady r a te th ro u g h o u t t h is

p e rio d . Table 1 shows th e annual in cre a se s and in d ic a te s th a t th e m ajor

a c c e le r a tio n was between th e years 1973-74 and 1975-76.

Table 1 Growth in H e a lth E xp en d itures and Gross Domestic P ro du ct, 1968-69 t o 1978-79

H e a lth

E x p e n d itu re Annual Growth

Gross Domestic P roduct

Annual Growth in G.D.P.

H ealth to G.D.P.

$ m illio n % $ m illio n % %

1968-69 1 476 27 408 5.4

1969-70 1 668 13.0 30 393 10.9 5.5

1970-71 1 922 15.3 33 601 10.6 5.7

1971-72 2 232 16.1 37 535 11.7 5.9

1972-73 2 505 12.2 42 730 13.8 5.9

1973-74 3 012 20.2 51 270 20.0 5.9

1974-75 4 136 37.3 61 742 20.4 6.7

1975-76 5 596 35.3 72 654 17.7 7.7

1976-77 6 428 14.9 83 102 14.4 7.7

1977-78 7 275 13.2 90 507 8.9 8.0

1978-79 7 950 9 .3 101 206 11.8 7.9

Sources: A u s tr a lia n Bureau o f S t a t is t ic s

Commonwealth Department o f H ealth

I t i s o f course tru e th a t p ric e s and wages in a l l s e c to rs o f th e economy

in cre a se d m arkedly between 1969 and 1979. In o rd e r to is o la te th e e ffe c ts

o f in c re a s e s in the p ric e o f th e raw m a te ria ls used ( f o r example, la b o u r,

drugs and fo od ) as d is t in c t from th e amounts used, i t i s necessary to

d is c o u n t the money in c re a s e s in e x p e n d itu re shown in Table 1 by some measure

o f i n f la t i o n . S e vera l methods a re a v a ila b le to do t h is , based on d if f e r e n t

in d ic e s . Table 2 shows the v a r ia t io n d u rin g the p e rio d 1968-69 to 1978-79

o f p ric e and wage movements in A u s tr a lia , as expressed in term s o f th e

I m p lic it P ric e D e fla to r f o r Government F in a l Consumption E xpenditure on

H e a lth , S o c ia l S e c u rity and W e lfa re ( I . P . D . ) , th e Consumer P ric e Index

( C . P . I . ) , Average Weekly Earnings ( A.W .E .) and Average Minimum Award Wages

(A .M .A .W .).

Table 2 P ric e and Wage Movements in A u s tr a lia , 1968-69 to 1978-79

I.P .D . C .P .I.( a ) A.W .E .(b) A.M .A.W .(c)

1968-69 100.0 100.0 100.0 100.0

1969-70 106.9 103.2 108.4 105.1

1970-71 117.6 108.1 120.4 117.2

1971-72 133.3 115.5 132.7 129.5

1972-73 146.7 122.4 144.6 149.4

1973-74 171.0 138.3 168.0 190.9

1974-75 222.2 161.4 210.7 228.3

1975-76 261.3 182.4 240.9 261.4

1976-77 292.2 207.5 270.9 289.7

1977-78 314.9 227.4 297.6 308.7

1978-79 334.7 245.9 320.6 335.0

Source: A u s tra lia n Bureau o f S t a t is t ic s

N otes: (a) T his form o f th e C .P .I. is th e a l l groups ind ex and is

the w eighted average f o r th e s ix S ta te c a p ita l c i t i e s .

(b) T his s e rie s r e fe r s to A.W.E. per employed male u n it in

A u s tr a lia . (c ) T h is s e rie s r e fe r s to the w eighted average minimum

weekly wage ra te s (a d u lt m ales) payable fo r a f u l l

week's work (e x c lu d in g o v e rtim e ) as p re s c rib e d in F ederal awards, d e te rm in a tio n s and c o lle c tiv e agreements.

The Commission i s in te r e s te d in id e n t if y in g th e ra te o f in c re a s e in h e a lth

co sts a d d itio n a l to th e r a te o f i n f l a t i o n which was g e n e ra l to th e

A u s tr a lia n economy, and fo r t h is p urpo se , the a p p ro p ria te b a s is fo r

com parison i s th e C .P .I. But th a t in d e x o n ly measures changes i n th e p ric e

o f consumer ite m s and the h e a lth s e c to r in v o lv e s d if f e r e n t in p u ts .

T h e re fo re , exam ining th e e x te n t o f th e r e a l in c re a s e s in h e a lth e x p e n d itu re

re q u ire s th e use o f a d e fla to r s p e c ific to th e h e a lth s e c to r. In the

absence o f a s p e c if ic h e a lth s e rv ic e s p ric e in d e x , th e Commission has

decided to use the I.P .D . (see Appendix J fo r a fu r th e r d is c u s s io n o f t h is

is s u e ) .

Table 3 p re s e n ts th e annual in c re a s e s in h e a lth e x p e n d itu re s d e fla te d by the

I.P .D . and th e annual ra te s o f in c re a s e in these e x p e n d itu re s , d e fla te d in

th e same way. Annual le v e ls o f e x p e n d itu re p er person are a ls o g iv e n .

Table 3 Growth In T o ta l and Per Person H e a lth E x p e n d itu re s, A c tu a l and

D e fla te d 1968-69 to 1978-79

T o ta l H ea lth E x p e n d itu re Annual

Growth

T o ta l D e fla te d H ea lth E xp en d iture

D e fla te d E xp en d iture Annual Growth(a)

E xpenditure p e r person

D e fla te d E xpenditure per person (a)

$m % $m % $ $

1968-69 1476 1476 121 121

1969-70 1668 13.0 1560 5 .7 133 126

1970-71 1922 15.3 1634 4 .7 147 129

1971-72 2232 16.1 1674 2 .4 168 128

1972-73 2505 12.2 1708 2 .0 186 129

1973-74 3012 20.2 1751 2 .5 220 130

1974-75 4136 37.3 1861 6 .3 304 136

1975-76 5596 35.3 2142 15.0 397 155

1976-77 6428 14.9 2200 2.7 461 157

1977-78 7275 13.2 2310 5 .0 515 163

1978-79(b) 7950 9 .3 2375 2 .8 544 166

Source: Commonwealth Departm ent o f H ea lth (e xce p t d e fla te d fig u r e s )

N otes: (a ) T o ta l annual grow th based on t o t a l e x p e n d itu re d e fla te d by I.P .D .

(b ) F ig u re s fo r 1978-79 are e s tim a te s .

T his p ro v id e s a d if f e r e n t p e rs p e c tiv e on the in c re a s e s . For example, in the

year 1973-74 th e percentage grow th in a c tu a l term s was 20.2 per c e n t, but

when p ric e in c re a s e s s p e c ific to th e h e a lth s e c to r are removed, th e ra te o f

r e a l grow th was o n ly 2 .5 per c e n t. By com parison, in th e year 1975-76 the

r e a l grow th was 15.0 per c e n t, r e f le c t in g a s ig n if ic a n t in c re a s e in

resources used w ith in th e h e a lth s e c to r d u rin g th a t ye a r.

In summary, t o t a l h e a lth e x p e n d itu re fo r the year 1978-79 was 5 .4 tim es th a t

fo r th e year 1968-69, in c re a s in g from $1476 m illio n to $7950 m illio n . Of

the $6474 m illio n in c re a s e in e x p e n d itu re , $5575 m illio n (86 per c e n t) could

be s a id to be a t tr ib u t a b le to i n f l a t i o n s p e c ific to th e h e a lth f i e l d , as

measured by the I.P .D . In e ff e c t $899 m illio n a d d itio n a l re a l resources is

now absorbed a n n u a lly in 1968-69 ye ar d o lla r s by th e h e a lth s e c to r. A

p ro p o rtio n o f t h is in c re a s e can be a ttr ib u t e d to both p o p u la tio n growth and

increa se d use o f h e a lth s e rv ic e s . These issue s are discussed la t e r in the

R eport.

What does th e H e a lth B i l l pay f o r ?

Our a n a ly s is o f e x p e n d itu re i s based on the fo llo w in g c la s s if ic a t io n :

. I n s t i t u t i o n a l S ervices

. H o s p ita ls ( p u b lic , p r iv a te , r e p a tr ia t io n and m ental)

. N ursing homes

. O ther (e .g . ambulance)

. N o n - In s titu tio n a l S e rvice s

. M edical s e rv ic e s ( p r iv a te p ra c tic e fe e - fo r - s e r v ic e , in c lu d in g

s t a f f s p e c ia lis ts ' r ig h t s to p riv a te p ra c tic e in p u b lic

h o s p ita ls )

. P harm aceuticals

. D e n ta l s e rv ic e s

. Community h e a lth

. O ther (e .g . p ro fe s s io n a l s e rv ic e s , such as param edical and

fa m ily p la n n in g )

. 'O th e r'

. Research

. P re v e n tiv e s e rv ic e s

. A d m in is tra tiv e (h e a lth departm ents, h e a lth insurance expenses)

The p ro p o rtio n s o f t o t a l h e a lth e x p e n d itu re spent on each o f these s e c to rs

in th e ye ar 1977-78, th e la s t year f o r which d e t a ils are a v a ila b le , are

i l lu s t r a t e d in F ig u re 1.

Figure 1 CURRENT EXPENDITURE ON HEALTH, by Sector, 1977-78

Institutional 5 7 %

Medical Services 17%

Hospitals 47%

Pharmaceuticals 10% Non-institutional

3 7%

Other

I NursingX i Homes \

I 8% \

Other

Other Services 6 %

Other

Source: Commonwealth Department of Health

C ost In c re a s e s in D iffe r e n t S ectors o f H e a lth

Trends r e fe r re d to in t h i s d is c u s s io n are based on in fo rm a tio n summarised in

Table 4 , w hich r e fe r s to the years between 1969-70 and 1977-78, fo r which

d a ta i s a v a ila b le to th e Commission.

Table 4 M ajor Areas o f C u rre n t H e a lth E xp e n d itu re 1969-70 to 1977-78

P re v e n tiv e S e rvice s 68 4 .5 89 3 .8 47 1 .5 64 1 .2 55 0 .9 58 0 .9

A d m in is tra tio n 33 2 .2 42 1 .8 155 4 .0 217 4 .2 285 4 .8 315 4 .6

Research n /a - 12(a) 0 .5 19 0 .5 33 0 .6 44 0 .7 54 0 .8

T o ta l O ther 101 6 .6 143 6.1 221 5 .8 314 6 .1 384 6 .5 427 6 .3

T o ta l 1522(a) 100.0 2355 100.0 3838 100.0 5124 100.0 5925 100.0 6778 100.0

Source: Commonwealth Department o f H ealth Notes: (a ) Excludes Research fo r 1970. Amount spent on Research in 1973 i s an e s tim a te o n ly .

T o ta ls may n o t add due to ro u n d in g .

I n s t i t u t i o n a l s e rv ic e s accounted f o r 57 per c e n t o f t o t a l c u rre n t

e x p e n d itu re in th e year 1977-78 and more than 60 per c e n t o f t h is went to

re co g n ise d h o s p ita ls (w hich are p u b lic h o s p ita ls recognised oy th e

Commonwealth f o r th e purposes o f C o s t-S h a rin g ). Table 5 shows th e

e x p e n d itu re w ith in th e i n s t i t u t i o n a l s e c to r fo r the year 1977-78. Payments

to d o c to rs fo r s e rv ic e s to u n in su re d p a tie n ts in p u b lic h o s p ita ls are

in c o rp o ra te d in th e c o s t o f these i n s t i t u t i o n a l s e rv ic e s .

Table 5 I n s t i t u t i o n a l E x p e n d itu re s , 1977-78

$ m illio n %

Recognised H o s p ita ls 2441 63.8

P r iv a te H o s p ita ls 324 8 .5

R e p a tria tio n H o s p ita ls 116 3 .0

M ental H o s p ita ls 335 8 .8

N ursing Homes -D e f ic i t fin a n c e d 96 2 .5

Government and o th e r 420 11.0

Amoulances 91 2 .4

O ther s e rv ic e s 6 0 .2

T o ta l $m3828 100.0%

Source: Commonwealth Department o f H ea lth Note: T o ta ls do n o t add due to ro u n d in g .

I n s t i t u t i o n a l s e rv ic e spending has absorbed a s te a d ily in c re a s in g p ro p o rtio n

o f t o t a l c u rr e n t e x p e n d itu re over the la s t te n y e a rs . T h is has r e fle c te d

th e h ig h growth ra te s o f e x p e n d itu re s on n u rs in g nomes and p riv a te

h o s p ita ls as w e ll as p u b lic h o s p ita ls .

The o th e r m ajor s e c to r o f the h e a lth b i l l , n o n - in s t it u t io n a l s e rv ic e s ,

showed s u b s ta n tia l r is e s in money term s b u t a r e la t iv e d e c lin e in i t s share

o f t o t a l e x p e n d itu re s between the two p o in ts in tim e . E xp en d iture w ith in

th e n o n - in s t it u t io n a l s e c to r fo r th e year 1977-78 i s shown in Table 6.

The main ite m i s th e c o s t o f m edical s e rv ic e s , which has increa se d from $250

m illio n in the year 1969-70 to $1176 m illio n in the year 1977-78. These

c o s ts co ver a l l payments to d o c to rs in p r iv a te p ra c tic e o u ts id e h o s p ita ls .

W ith in h o s p ita ls , th ey in c lu d e n o t o n ly the amounts charged by d o c to rs fo r

s e rv ic e s rendered to p r iv a te p a tie n ts in p u o lic h o s p ita ls but a ls o payments

f o r s e rv ic e s p ro v id e d to t h e ir p riv a te p a tie n ts by s t a f f s p e c ia lis ts , made

p o s s ib le by t h e ir r ig h t s to p riv a te p ra c tic e .

The second la r g e s t ite m o f n o n - in s t it u t io n a l e x p e n d itu re is

p h a rm a c e u tic a ls . T h is ite m has f a lle n as a p ro p o rtio n o f t o t a l e x p e n d itu re

d u rin g th e p e rio d under c o n s id e ra tio n . On the o th e r hand, th e re have been

in c re a s e s in e x p e n d itu re on p riv a te param edical s e rv ic e s and o th e r s e rv ic e s

which are in c lu d e d as O th e r P ro fe s s io n a l S e r v ic e s ', d e n ta l s e rv ic e s and the

Community H e a lth Program.

Table 6 N o n - I n s titu tio n a l E x p e n d itu re , 1977-78

$ m illio n %

M edical S e rvice s 1176 46.5

D e n ta l S e rv ic e s 287 11.4

O ther P ro fe s s io n a l S e rvice s 115 4 .6

Community H ea lth S e rv ic e s -Community H e a lth (a) 89 3 .5

D o m ic ilia ry Care B e n e fit 11 0 .4

Home N ursing 25 1 .0

M ate rna l and C h ild Care 26 1.0

P h arm ace utica ls -B e n e fits p a id item s 410 16.2

A l l o th e r ite m s 234 9 .3

A p p lia n ce s 108 4 .3

O ther 43 1 .8

T o ta l $m2524 100 . 0 %

Source: Commonwealth Department o f H ealth N ote: (a) In c lu d in g A b o rig in a l H ealth

The r e s id u a l 1 o th e r ' ca te g o ry embraces p re v e n tiv e s e rv ic e s (e .g . q u a ra n tin e

and h e a lth e d u c a tio n ), a d m in is tra tio n (e .g . h e a lth departm ent s a la r ie s and

h e a lth in s u ra n c e expenses) and re s e a rc h . The $427 m illio n expended on these

ite m s in th e year 1977-78 (T a b le 7) re p re sen te d 6 per ce n t o f t o t a l c u rre n t

h e a lth e x p e n d itu re in th a t ye a r.

In d is c u s s in g in c re a s e s in s e c to r e x p e n d itu re s , i t would oe h e lp fu l to be

a b le to d is c o u n t fo r i n f la t i o n . However, a f t e r e x te n s iv e in q u ir ie s , the

Commission has decideo th a t the a v a ila b le d e fla to r s are in a p p ro p ria te . The

Commission has been inform e d in evidence th a t they are c u rr e n tly being

developed. (See Appenoix J)

Table 7 O th e r ' E x p e n d itu re s, 1977-78

$ m illio n %

P re v e n tiv e S e rvice s A d m in is tra tio n -58 13.6

In suran ce 182 42.6

Other 153 31.2

Research 54 12.6

T o ta l $m427 100.0%

Source: Commonwealth Department o f H ealth

The co m p o sitio n o f the t o t a l h e a lth b i l l has changed sin ce 1968-69, in as

much as th e re are item s being p a id fo r now th a t were n o t p a id f o r te n years

ago. The new ite m s in c lu d e th e Community H e a lth Program (e s tim a te d to c o st

$41.5 m illio n fo r th e year 1978-79) and payments to V is it in g M edical S t a f f

( t o t a l l i n g $85.7 m illio n fo r the year 1978-79). There are a ls o item s which

were n o t p re v io u s ly in c lu d e d in c u rre n t e x p e n d itu re s , such as in t e r - h o s p it a l

ambulance charges.

Source o f Funds to pay th e H ea lth B i l l

The m ajor sources o f fin a n c e f o r h e a lth e x p e n d itu re s fo r th e ye a r 1977-1978

are p resented in Table 8.

Table 8 Sources o f Funds f o r C u rre n t H e a lth E x p e n d itu re , 1977-78

$ m illio n %

Commonwealth 2560 37.8

S ta te (and lo c a l) 1500 22.1

H e a lth Insurance Funds 1409 20.8

O ther P r iv a te Sources 203 3 .0

In d iv id u a ls 1106 16.3

T o ta l $m6778 100 . 0%

Source: Commonwealth Department o f H ealth

For the year 1978-79, Commonwealth Government h e a lth o u tla y s were e stim ated

a t $2900 m illio n , o r a p p ro x im a te ly 10 per c e n t o f a l l i t s budget o u tla y s .

T his re p re s e n ts a s l i g h t l y s m a lle r p ro p o rtio n than fo r the p re vio u s two

years.

In th e absence o f d e ta ile d in fo rm a tio n on th e sources o f fin a n c e f o r h e a lth

care fo r the year 1978-79, the Commission has used data fo r the year 1977-78

to show where th e money p re s e n tly comes from and goes t o . For th a t

fin a n c ia l y e a r, t o t a l n a tio n a l h e a lth e x p e n d itu re was $7275 m illio n , o f

which $6778 m illio n was c u rre n t e x p e n d itu re .

In lo o k in g a t Table 8, i t should be mentioned th a t d ir e c t payments by

in d iv id u a ls do n o t in c lu d e in s u ra n c e premiums p a id by p r iv a t e ly in s u re d

in d iv id u a ls to Insurance Funds. These are n ot lis t e d s e p a ra te ly from the

o v e r a ll in su ra n ce sh are. M oreover, th e c o n tr ib u tio n o f the Commonwealth

Government in c lu d e s th e amounts p a id to insurance funds through the

Reinsurance P ool (See Appendix K) and th e s u b s id ie s p a id to p riv a te

h o s p ita ls and n u rs in g homes. In a d d itio n , the shared government o u tla y s

in c lu d e a su bsidy n o t borne by in d iv id u a ls nor the Funds when s e rv ic e s are

p ro vid e d in p u b lic h o s p ita ls to p r iv a te p a tie n ts . T his amount cannot be

id e n t if ie d in Table 8, o r Tables 9 , 10 and 11.

Table 9 expands on the in fo rm a tio n fo r the year 1977-78 from Table 8 and

th a t p resented e a r lie r in Table 4 , by showing th e r e la t iv e c o n tr ib u tio n s o f

Commonwealth and S ta te (and lo c a l) Governments, Insurance Funds, in d iv id u a ls

and o th e r p r iv a te sources to th e c u rre n t c o s ts o f v a rio u s s e c to rs o f the

h e a lth s e rv ic e s .

Governments pay f o r th e b u lk o f c u rre n t e xp e n d itu re s in h o s p ita ls (7 7 .6 per

c e n t), n u rs in g homes (66 .9 per c e n t) and community h e a lth s e rv ic e s (9 9 .3 per

c e n t) .

Table 10 g iv e s in fo rm a tio n on th e source o f funds from th e o p p o site p o in t o f

view . I t shows how governments and o th e r p ro v id e rs o f funds a llo c a te t h e ir

o u tla y s among th e d if f e r e n t s e c to rs o f th e h e a lth s e rv ic e s .

Table 9 Sources o f Funds fo r th e D iffe r e n t S ectors o f C urren t H ealth E x p e n d itu re , 1977-78

Government P riv a te

Per Cent

S ta te T o ta l

Commonwealth (& lo c a l) Government

H ealth Insurance Funds In d iv id u a ls

T o ta l

O ther T o ta l

(a) P riv a te

H o s p ita ls 39.1 38.5 77.6 15.6 2 .6

N ursing Homes 57.9 8 .9 66.9 6 .6 26.6

Other 17.5 20.6 38.1 3 .1 55.7

4 .2 22.4 100

- 33.1 100

3.1 61.9 100

T o ta l I n s t it u t io n a l 41.1 34.1 75.2 4 .1 7 .2 3 .6 24.8 100

M edical S ervices 33.6 - 33.6 53.5 8 .2

D ental S ervices 5 .9 2.8 8 .7 26.1 65.2

Community H ealth 69.5 29.8 99.3 0 .7 -

Pharm aceuticals 45.8 - 45.8 0 .6 53.1

Other 13.2 10.5 23.7 10.2 63.5

4 .7 66.4 100

- 91.3 100

- 0 .7 100

0 .5 54.2 100

2 .6 76.3 100

T o ta l N o n - In s titu tio n a l 33.6 3 .2 36.8 29.2 31.5 2 .6 63.2 100

8 .4 40.0 100

T o ta l C urren t 37.8% 22.1% 59.9% 20.8% 16.3% 3.0% 40.1% 100

Expenditure________________________________________________________________________________________________________

Source: Commonwealth Department o f H ealth Note: (a) Refers to w orkers compensation, t h ir d p a rty c la im s and c h a r ita b le donations

T o ta ls may n ot add due to rounding.

H e a lth in s u ra n c e o rg a n is a tio n s p ro v id e t h e ir funds m a in ly fo r m edical

s e rv ic e s (4 4 .6 per c e n t) and h o s p ita l s e rv ic e s (3 5 .6 per c e n t) . By c o n tra s t,

th ro ug h d ir e c t payments, in d iv id u a ls spend o n ly 8 .8 per ce nt o f t h e ir

c o n tr ib u tio n on m edical s e rv ic e s and 7 .6 per c e n t on h o s p ita l s e rv ic e s . The

la r g e s t share o f in d iv id u a ls o u tla y s (30 .9 p er c e n t) is spent on

p h a rm a c e u tic a ls . S ta te (and lo c a l) government o u tla y s are m ainly fo r

h o s p ita ls (8 2 .6 per c e n t) . Commonwealth o u tla y s are spread across n ursin g

homes (1 1 .7 per c e n t ) , m ed ica l s e rv ic e s (1 5 .4 per c e n t) and p ha rm ace utica ls

(1 1 .5 p er c e n t) w ith i t s c h ie f o u tla y being on h o s p ita ls (49.1 per c e n t) .

Drawing on both Tables 9 and 10, i t i s in t e r e s tin g to note th a t th e 30.9 per

c e n t o u tla y e d by in d iv id u a ls on p h a rm a ce u tica ls re p re s e n ts over h a lf (53.1

per c e n t) o f a l l monies sp e n t on th a t ite m . S im ila r ly , w h ile o n ly 11.7 per

ce n t o f Commonwealth h e a lth o u tla y s are on n u rs in g homes, t h is rep re se n ts

alm ost 60 per c e n t (57 .9 p er c e n t) o f a l l monies spent in th a t area.

Table 11 in d ic a te s th e changes in the shares c o n trib u te d by th e p ro v id e rs o f

funds between 1966-67 and 1977-78. However, th e Commission i s unable to

p ro v id e d e ta ile d fig u r e s fo r a l l the years d u rin g t h is p e rio d .

Trends in these fig u r e s are discussed in th e S e c tio n 'F a c to rs Behind Costs

and Cost In c re a s e s '.

V a r ia tio n s between th e S ta te s and T e r r it o r ie s

The fa c ts p resented here on the d iffe re n c e s in e xp e n d itu re on h e a lth

s e rv ic e s among S ta te s are r e s t r ic t e d to spending on recognized p u b lic

h o s p ita ls , th e c o s ts o f w hich a re shared between th e Commonwealth and the

S ta te s . These h o s p ita ls com prise th e m ajor area o f e x p e n d itu re on h e a lth by

S ta te governm ents.

Tables 12 and 13 p re s e n t in fo rm a tio n on th e a c tu a l o p e ra tin g c o s ts o f these

h o s p ita ls , by S ta te , fo r th e years 1968-69 and 1978-79.

O p e ra tin g c o s ts o f p u b lic h o s p ita ls in a l l S ta te s increa se d m arkedly over the

te n ye a rs (T a b le 1 2 ), b ut th e s iz e o f th e in c re a s e s v a rie d . Increases in per

person c o s ts (T a b le 13) were g re a te s t in South A u s tr a lia (750 p e r c e n t) and

le a s t in Queensland (424 p e r c e n t) . In the ye ar 1978-79, the lo w e s t per

person c o s ts were in Queensland whereas Western A u s tr a lia had th e h ig h e s t per

person c o s ts o f th e s ix S ta te s . In cre ase s in c o s t per occupied bed-day moved

in a d if f e r e n t way from in c re a s e s in per person c o s ts .

Table 11 The P ro v is io n o f Funds fo r D iffe r e n t S e cto rs Of C u rre n t H e a lth E x p e n d itu re , by S ource,

1966-67 to 1977-78

Government

S ta te

T o ta l Government H ea lth

Commonwealth (& lo c a l) Funds Insurance

1966-67

% % % %

I n s t i t u t i o n a l S e rvice s 24.9 42.6 67.5 15.6

N o n - I n s titu tio n a l S e rvice s 32.7 0 .7 33.4 11.7

TOTftL C u rre n t E xp en d iture______ 29.3________ 21.5_______ 51.8________ 13.0

1969-70 I n s t i t u t i o n a l S e rv ic e s 26.1 4 5.6 7 1.8 14.0

N o n - In s titu tio n a l S e rvice s_____ 33.8__________ 0 .9 _______ 34.6_________ 9 .8

TOTAL C u rre n t E xp e n d itu re 30.0 2 5 .2 55.2 12.7

1972-73 TOTAL C u rre n t E xp e n d itu re 30.7 26.1 56.8 15.5

1974- 75

I n s t i t u t i o n a l S e rvice s 21.8 51.4 73.2 15.6

N o n - I n s titu tio n a l S e rvice s_____ 41.1___________2 .1_______ 43.2_______ 12.7

TOTAL C u rre n t E xp en d iture______ 30.1__________ 31.1_______ 61.1_______ 15.2

1975- 76

I n s t i t u t i o n a l S e rvice s 4 2.8 3 6.2 79.1 9 .1

N o n - In s titu tio n a l S e rvice s_____56.0___________2^2_______ 58.3_________6 .7

TOTAL C u rre n t E xp en d iture ______48.1__________23.1_______ 71,2_________8 .1

1976- 77

I n s t i t u t i o n a l S e rvice s 42.6 35.1 77.7 12.1

N o n - In s titu tio n a l S e rvice s____ 43.3___________2^9_______ 46,2________17,9

TOTAL C u rre n t E xp e n d itu re 4 2.6 2 2.3 64.9 15.1

1977- 78

I n s t it u t io n a l S e rvice s 41.1 34.1 75.2 14.1

N o n - In s titu tio n a l S e rvice s____ 33.6___________3^2_______ 36.8________29.2

TOTAL C u rre n t E xp en d iture_____ 37.8__________22.1_______ 59.9________ 20.8

P riv a te

In d iv id u a ls O th e r(a )

% %

15.1 1 .8

54.8 0 .1

34.2 0 .9

12.5 1 .6

55.9 0 .0

31.2 0 .9

26.8 0 .9

8 .3 2 .9

4 1.4 2 .6

21.0 2.6

7 .6 4 .2

34.6 0 .5

18.2 2 .5

7 .6 2 .9

34.4 1 .5

17.9 2 .1

7 .2 3 .6

31.5 2 .6

16.3 3 .0

Per Cent

T o ta l P riv a te %

T o ta l %

32.5 100.0

6 6 . 6 10 0 . 0

4 8.2 100.0

2 8.2 100.0

65.4 100.0

44.8 100.0

4 3.2 100.0

2 6.8 100.0

56.8 100.0

38.9 100.0

2 0.9 100.0

41.7 100.0

28.8 100.0

22.3 100.0

53.8 100.0

35.1 100.0

24.8 100.0

63.2 100.0

40.1 100.0

Source: Commonwealth Department o f H ealth N ote: T o ta ls may n o t add due to ro u n d in g .

Table 12 Recognised P u b lic H o s p ita l E xp en d iture by S ta te and T e r r it o r y , 1968-69 to 1978-79

1968-69 1978-79

Percentage In crease

$ m illio n S m illio n %

New South Wales 146.5 998.4 581

V ic to r ia 90.8 641.5 606

Queensland 48.6 318.0 554

South A u s tr a lia 27.1 263.5 872

Western A u s tr a lia 32.8 227.0 744

Tasmania 12.4 78.1 530

N o rth e rn T e r r it o r y 4 .0 37.5 838

A .C .T. 4 .6 50.5 998

A u s tr a lia $m366.8 $m2664.4 626%

Source: Commonwealth Department o f H ealth

Among th e reasons f o r these v a r ia tio n s are su p p ly and u t i l i s a t i o n fa c to rs .

An in d ic a tio n o f th e e f f e c t o f u t i l i s a t i o n on the o p e ra tin g c o s ts o f

h o s p ita ls re q u ire s in fo rm a tio n on th e number o f p a tie n ts tr e a te d , o r some

o th e r s im ila r measure, fo r example, a dm issions. U n fo rtu n a te ly , a c o n s is te n t

data s e rie s in a l l S ta te s f o r th e te n years between 1968-69 and 1978-79 is

n o t a v a ila b le to th e Commission a t t h is s ta g e . Such in fo rm a tio n as is

a v a ila b le , f o r p a r t ic u la r S ta te s , emphasises th e d iffe re n c e s in th e

b e h a vio u r o f c o s t per occupied bed day and c o s t per p a tie n t tre a te d .

The q u e s tio n o f s u p p ly and u t i l i s a t i o n o f f a c i l i t i e s i s co nside red again in

the S e c tio n 'F a c to rs Behind Costs and Cost In c re a s e s ' and f u r t h e r Tables are

in c lu d e d i n Appendix L.

P u b lic H o s p ita l E xp e n d itu re

A c tu a l e x p e n d itu re on A u s tr a lia n p u b lic h o s p ita ls has increa se d by 626

p e rc e n t o ver th e te n ye ar p e rio d , whereas r e a l e xp e n d itu re has increa se d by

117 per c e n t. The growth in these e x p e n d itu re s i s shown in Table 14.

In th e C om m ission's survey o f h o s p ita ls (Appendix H ), the in c re a s e in a c tu a l

e x p e n d itu re s in h o s p ita ls w ith more than 50 beds was o f th e o rd e r o f 610 per

c e n t. The in c re a s e in s m a lle r h o s p ita ls was o f the o rd e r o f 440 per c e n t.

Table 13 Recognised P u b lic H o s p ita l C osts, by S ta te s and T e r r it o r ie s , 1968-69 and 1978-79

O p eratin g Costs per person Cost per Occupied Bed Day

Percentage

1968-69 1978-79 Increase 1968-69

Percentage

1978-79 In cre ase

$ %

New South Wales 33.30 197.90 494

V ic to r ia 27.00 167.20 519

Queensland 27.80 145.80 424

South A u s tr a lia 24.00 204.10 750

Western A u s tr a lia 35.00 224.80 542

Tasmania 32.40 187.70 479

N orth ern T e r r it o r y 57.10 328.90 476

A.C.T. 39.30 230.60 487

23.30 140.60 505

25.30 162.10 541

17.90 125.30 600

23.70 163.70 591

25.20 172.90 586

24.50 146.00 496

24.00 197.40 723

24.50 192.70 687

A u s tr a lia $30.20 $185.90 516% $23.10 $149.70 548%

Source: Commonwealth Department o f H ealth A u s tra lia n Bureau o f S t a t is t ic s

Table 14 Growth in C u rre n t E x p e n d itu re s on P u b lic H o s p ita ls , A c tu a l and

D e fla te d , 1968-69 to 1978-79

C u rre n t Expend it u r e

Annual Growth

Expend it u r e Per Person

D e fla te d (a) C u rre n t E xp en d iture

D e fla te d (a )

Annual Increase (R eal)

D e fla te d (a)

Per Person E xpenditure

$ m il l i o n % $ $ m illio n % $

1968-69 366.8 30.20 366.8 30.20

1969-70 416.4 13.5 33.60 389.5 6.2 31.40

1970-71 507.2 21.8 41.10 431.3 10.7 34.10

1971-72 614.4 21.1 47.00 460.9 6.9 35.30

1972-73 719.2 17.1 54.20 487.3 5.7 36.70

1973-74 910.9 26.7 67.50 529.6 8.7 39.30

1974-75 1 30 7.9 (b) 43.6 95.50 588.6 11.1 43.00

1975-76(b) 1741.9 33.2 125.80 666.6 13.3 48.10

1976-77 2122.7 2 1 .9 (b ) 151.70 726.5 9 .0 (b ) 51.90

1977-78 2442.7 15.1 172.50 775.7 6 .8 54.80

1978-79 2664.4 9 .1 185.90 796.1 2 .6 55.50

Source: Commonwealth Department o f H ealth N otes: (a ) D e fla te d by th e I . P .D ., see Appendix 3

(b) E stim a tes

T u rn in g to th e m a jo r payments in p u b lic h o s p ita ls , th e s a la rie s and wages

b i l l was $243.6 m illio n (6 6 .4 p e r c e n t o f t o t a l gross o p e ra tin g payments) in

th e y e a r 1968-69 and $1889.6 m illio n (70 .9 p e r c e n t) te n years l a t e r . An

a d d itio n a l $85.7 m illio n (3 .2 p er c e n t) was p a id to V is it in g M edical

O ffic e r s f o r th e tre a tm e n t o f h o s p ita l p a tie n ts in p u b lic h o s p ita ls in the

ye ar 1978-79. These s e rv ic e s had n o t been charged fo r p r io r to th e year

1975-76. D e ta ils o f these payments are g iv e n in Tables 15 and 16.

In fo rm a tio n from th e survey showed th a t s a la r ie s and wages in th e year

1978-79 re p re s e n te d a s m a lle r p ro p o rtio n o f t o t a l e x p e n d itu re f o r h o s p ita ls

between 6 and 200 beds th an fo r h o s p ita ls o f more than 200 beds.

The ways in w hich payments f o r th e v a rio u s ite m s o f p u b lic h o s p ita l

e x p e n d itu re have moved i s shown g ra p h ic a lly in F ig u re 2. For com parative

purposes t o t a l d e fla te d e x p e n d itu re i s a ls o shown.

Table 15 Payments by P u b lic H o s p ita ls to V is it in g M edical O ffic e r s , 1978-79

____________________________________________________________________________$00 0's

NSW VIC QLD SA WA TAS ACT NT TOTAL

S e ssion al 22667 23016 6016 5830 3906 2466 77 84 64062

F e e -fo r-s e rv ic e & - 8750 - 3962 7522 271 1139 15 21659

c o n tra c tu a l

T o ta l 22667 31766 6016 9792 11428 2737 1216 99 85721

Source: Commonwealth Department o f H ealth

Table 16 R e la tiv e Share o f Item s o f E xp en d iture f o r P u b lic H o s p ita ls

Per Cent

E xp e n d itu re Ite m 1968-69 1974-75 1978-79

S a la rie s and wages -w ith o u t V.M.O. payment 66.4 76.6 70.9

w ith V.M.O. payments (a) - - 74.1

P ro v is io n s 6.2 3.1 2.6

M edical & S u rg ic a l 8.8 7.2 8 .5

O ther 18.6 13.1 14.8

T o ta l 100.0% 100.0% 100.0%

Source: Commonwealth Department o f H ealth N ote: (a ) Payments to V is it in g M edical O ffic e r s separated from 1975-76.

Non-Labour c o s ts

The o th e r m ajor ite m s o f e x p e n d itu re in p u b lic h o s p ita ls a re :

. m edical and s u r g ic a l s u p p lie s which have ris e n in a c tu a l values

from $32.1 m illio n in th e ye ar 1968-69, to $226.2 m illio n in the

ye ar 1978-79,

. p ro v is io n s , which have r is e n in a c tu a l va lu e s from $22.9 m illio n in

1968-69 to $68.5 m illio n in the ye ar 1978-79, and

. a l l o th e r payments, which have r is e n from $68.2 m illio n to $394.4

m illio n .

These changes can a ls o be seen in F ig u re 2.

In th e Com m ission's s u rv e y , s a la r ie s and wages in both la rg e and s m a ll

h o s p ita ls in c re a s e d by s im ila r p ro p o rtio n s . T h is was n o t th e case fo r

movements in n o n -la b o u r e x p e n d itu re , where no c o n s is te n t p a tte rn emerged.

For example i n th e m e tro p o lita n te a c h in g h o s p ita ls , between 1968-69 and

1978-79, the range o f in c re a s e s in e x p e n d itu re v a rie d :

. f o r dom estic s e rv ic e s , th e in c re a s e ranged from 132 per ce n t to

774 per c e n t,

. fo r a d m in is tr a tiv e e x p e n d itu re from 252 per c e n t to 1421 per c e n t,

. f o r m ed ica l and s u rg ic a l s u p p lie s from 246 per ce nt to 716 per cent

(Appendix H ).

Figure 2 CURRENT EXPENDITURE, BY ITEM, PUBLIC HOSPITALS, years 1968-69 to 1978-79, $ million

$ million

Other

Medical and Surgical

Provisions

Wages and Salaries

1350

Total Expenditure deflated by I.P.D.

1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79

FACTORS BEHIND COSTS AND COST INCREASES

The in fo r m a tio n p resented so fa r has d e s c rib e d , in s o fa r as the Commmission's

in v e s tig a tio n s a t t h i s stage p e rm it, th e n a tu re o f h e a lth care c o s ts and the

e x te n t o f c o s t in c re a s e s o ver th e te n years between 1968-69 and 1978-79.

T h is S e c tio n d e a ls w ith th e fa c to rs behind these c o s ts and c o s t in cre a se s

and f o r t h is purpose draws on a l l sources o f evidence presented to the

Commission so f a r : from subm issio ns, v i s i t s , h e a rin g s , p u b lis h e d research

and th e in v e s tig a tio n s o f th e C om m ission's own rese arch s t a f f , in c lu d in g the

survey o f h o s p ita ls conducted e a r ly in 1980 by th e Commission.

An im p o rta n t li m i t a t i o n o f which th e Commission i s aware, i s th a t much o f

th e d e t a il in th e p re v io u s S e c tio n , and in subm issions o r from o th e r sources

o f e v id e n ce , r e la te s to p u b lic h o s p ita ls r a th e r than to a l l s e c to rs o f

h e a lth s e rv ic e s . M oreover, w ith in the p u b lic h o s p ita l s e c to r, n o t a l l o f

th e d e s ira b le in fo rm a tio n has been a v a ila b le d e s p ite th e g o o d w ill o f the

Commonwealth and S ta te h e a lth a u th o r itie s .

The C om m ission's o b s e rv a tio n s f a l l in t o two c a te g o rie s , f i r s t those which

d eal w ith fa c to r s g e n e ra l to th e economy which have a ffe c te d th e h e a lth

s e c to r and second, those d e a lin g w ith fa c to rs s p e c ific to the h e a lth s e c to r,

e it h e r because th e y r e la t e to what s e rv ic e s are p ro v id e d , how those s e rv ic e s

are p ro v id e d , o r th e manner in which th ey a re fin a n ce d and a d m in is te re d .

I n f l a t io n

R is in g h e a lth ca re p ric e s , as measured by th e d e fla to r co nside red most

a p p ro p ria te by th e Commission, accounted fo r 86 per ce n t o f th e in c re a s e in

th e t o t a l h e a lth b i l l in th e te n years from 1968-69 to 1978-79, But t h is

ty p e o f i n f l a t i o n i s o n ly a symptom. What l ie s behind i t ?

Labour Costs

The im portance o f r is in g la b o u r c o s ts in p u b lic h o s p ita ls was emphasised in

subm issions p ro v id in g d e ta ile d analyses and by many h o s p ita l personnel w ith

whom d is c u s s io n s were h e ld . In c re a s in g la b o u r c o s ts were r e la t e d , in la rg e

p a r t, to in c re a s e s in s a la r ie s and wages, a lth o u g h in th e p e rio d s in c e 1976,

th e c o n tr ib u tio n o f in c re a s e s in th e o th e r components o f la b o u r c o s ts seems

to have been in c re a s in g .

The Commission has been inform e d th a t th ro u g h o u t th e p e rio d in q u e s tio n ,

r e a l improvements in th e wages and w orking c o n d itio n s o f nurses have been a

fa c to r behind in c re a s in g la b o u r c o s ts . The wage d e c is io n s o f th e mid

1 9 7 0 's , in c lu d in g th e d e c is io n to b rin g female ra te s o f pay in t o lin e w ith

t h e ir male c o u n te rp a rts in th e community, have, a ccordin g to many, had

s ig n fic a n t im pact on h o s p ita l s a la rie s and wages, e s p e c ia lly sin c e so many

o f th e s t a f f in h o s p ita ls are fem ale.

Some o f th e in fo rm a tio n p ro v id e d to th e C o m m is s io n ,in d ire c tly s u p p o rts the

view th a t these d e c is io n s fu e lle d a lre a d y r is in g c o s ts . The e x te n t o f these

in c re a s e s , in both a c tu a l and d e fla te d term s, i s shown in Table 2.

A d d itio n a l payments as a r e s u lt o f changes in c o n d itio n s and allowances a lso

a ffe c te d n o t o n ly payments to s a la rie d d o c to rs and nurses, b u t most o th e r

c a te g o rie s o f h o s p ita l s t a f f . A fu r th e r fa c to r o f obvious im portance,

though n o t e a s ily q u a n tifie d , i s th e movement to more s k ille d and more

h ig h ly p a id c a te g o rie s o f s t a f f . The growing numbers o f people who work in

h o s p ita ls and r e la te d s e rv ic e s , and th e in c re a s in g s p e c ia lis a tio n o f t h is

w o rkfo rce are o th e r fa c to rs which may u n d e rlie these r is in g la b o u r c o s ts .

However, th e evidence i s in s u f f i c i e n t to p e rm it th e Commission to q u a n tify

t h e ir im pact.

A number o f subm issions and people to whom th e Commission has spoken

co nside red th a t in c re a s in g numbers o f d o c to rs , both those employed in

h o s p ita ls , e it h e r w h ile in tr a in in g o r as s t a f f s p e c ia lis ts , and those in

p r iv a te p ra c tic e who make use o f h o s p ita ls in one way o r another were a

fa c to r behind c o s t e s c a la tio n . In a d d itio n , th e method o f payment o f

d o c to rs p ro v id in g s e rv ic e s to 'h o s p it a l1 p a tie n ts , and the r ig h ts to p riv a te

p ra c tic e o f s t a f f s p e c ia lis ts , have been mentioned as re c e n t elem ents in

c o s t in c re a s e s .

The Commission has been inform ed th a t th e re has been an o v e r a ll in c re a s e in

th e number o f s t a f f employed per occupied bed in A u s tra lia n recognised

h o s p ita ls in re c e n t years and th a t these movements have n o t been u n ifo rm

between the S ta te s .

T his o v e r a ll p ic tu r e i s supplemented by th e d iffe re n c e s which became

a pp aren t between la rg e and s m a ll h o s p ita ls in th e Com m ission's survey

(T a b le 17 and Appendix H ). H o s p ita ls w ith between 6 and 200 beds spent

r e l a t iv e l y le s s in the ye ar 1978-79 on s a la r ie s and wages than those w ith

more th a n 200 beds and th e s m a lle r h o s p ita ls a ls o employed few er s t a f f . But

th e re was a wide range among these h o s p ita ls . In a l l groups o f h o s p ita ls ,

th e re was an in c re a s e in th e s t a f f to d a ily average o ver th e te n year

p e rio d . The 'd a il y a verag e' i s th e number o f beds occupied by in p a tie n ts ,

n ot a d ju s te d f o r o u tp a tie n ts . The in c re a s e appears to have been fa s te r both

in th e group o f seven m e tro p o lita n te a c h in g h o s p ita ls and in th e h o s p ita ls

w ith between 20 and 500 beds than in th e o th e r groups.

F in a n c in g - Government

The h e a lth s e rv ic e ' in d u s t r y ' i s h e a v ily s u b s id is e d by both Commonwealth and

S ta te governments (T ables 3, 10 and 1 1 ). The c o s t o f run nin g and equipping

h o s p ita ls i s s u b s id is e d by both Commonwealth and S ta te governments, w h ils t

th e c o s t to th e in s u re d in d iv id u a l o f re c e iv in g h o s p ita l o r m ed ica l s e rv ic e s

is reduced th ro u g h th e s u b s id ie s p a id by th e Commonwealth Government. The

e x is te n c e o f th ese s u b s id ie s means th a t governments ra th e r than s e rv ic e

p ro v id e rs o r in d iv id u a ls p ic k up much o f th e f i n a l b i l l . Many s e rv ic e s do

n o t, th e r e fo r e , have to a void making a lo s s . In t h is sense, h e a lth is

s im ila r t o o th e r p u b lic s e rv ic e s , such as tr a n s p o r t.

The im pact on h e a lth s e rv ic e s in g e n e ra l, and recognised h o s p ita ls in

p a r t ic u la r , o f changes in fin a n c in g methods was emphasised in a number o f

su bm issions and d u rin g many o f th e C om m ission's v i s i t s . The m ajor change by

the Commonwealth was th e in tr o d u c tio n o f s p e c ific purpose g ra n ts (th e

H o s p ita l C o st-S h a rin g Agreements) to re p la c e the system o f p ro v id in g bed-day

s u b s id ie s to h o s p ita ls . T h is change was a s s o c ia te d w ith th e in fu s io n o f

la rg e sums o f a d d itio n a l Commonwealth moneys in t o recognised p u b lic

h o s p ita ls . F u rth e rm o re , a number o f ite m s were s p e c if ic a lly in c lu d e d under

th e C o st-S h a rin g Agreements, such as payments to V is it in g M edical O ffic e r s ,

some ambulance charges and th e p ro v is io n o f d en ture s to n ece ssito u s

p e rs o n s . The p r in c ip le o f s p e c ific purpose g ra n ts had a ls o been extended to

n o n - in s t it u t io n a l s e rv ic e s th ro ug h th e Community H ea lth Program and fo r

c a p it a l works th ro ug h th e now te rm in a te d H o s p ita ls Development Program.

These changes i n fu n d in g arrangem ents are discussed in more d e t a il in

Appendix K.

Table 17 R a tio s o f S t a f f (a ) to D a ily Average o f Occupied Beds, 1968-69 to 1978-79, Commission Survey

501 and over

H o s p ita l H o s p ita l H o s p ita l H o s p ita l

Number 1968-69 1978-79 Number 1968-69 1978-79 Number 1968-69 1978-79 Number 1968-69 1978-79

1 1.65 1.61 1 1.70 2.02 1 2.39

2 n /a 1.67 2 1.22 1.37 2 n /a

3 1.55 1.70 3 2.05 3.16 3 2 .40

4 n /a 1.64 4 n /a 40.55 4 2.41

5 1.23 1.72 5 1.64 2.19 5 2.13

6 3.92 4.43 6 1.31 1.70 6 3.41

7 3.21 2.84 7 n /a 2 .4 2 (b ) 7 2.51

8 n /a 1 .2 9 (b ) 8 1.75 2.28 8 1.41

9 1.38 1.46 9 1.46 1.27 9 2.54

10 1.25 1.57 10 1 .5 0 (b ) 1.72 10 2.28

11 n /a n /a 11 1.50 2.16 11 1.84

12 n /a 1.38 12 n /a 1 .8 9 (b ) 12 n /a

13 n /a 1.26 13 2.19 2.72 13 4.00

14 n /a 4.22 14 n /a n /a 14 2.41

15 2.32 2.14 15 2.26 2.41 15 n /a

16 n /a 3.80 16 1.90 3.04 16 n /a

17 1 .7 8 (b ) 4.98 17 n /a

18 n /a 2.65 18 3 .7 2 (b )

2.93 4.70 3.20 3.28

2.47 4.85 3.96 2.42

3.44 2.57 3.39 1.84

6.55 3.48 3.54 4.09

3.23 4.05

1 2 3 4

5 6 7

3 .20 3 .5 4 (b )

3.79 5.05

1 .6 7 (b ) 2 .8 9 (b ) 3.30 4.90

2 .63 4.60

3.11 4.26

2.59 3.30

Note: (a) E q u iv a le n t F u ll Time S t a ff

(b ) E stim a te .

When h o s p ita l c o s ts were r is in g in the la t e 1 9 6 0 's and e a rly 1970's the

S tate s accepted th e m ajor f in a n c ia l r e s p o n s ib ilit y ; t h e ir share o f c u rre n t

e x p e n d itu re on i n s t i t u t i o n a l s e rv ic e s rose from 42.6 per ce n t in th e year

1966-67 to 51.4 p er c e n t in th e ye a r 1974-75. But as th e C ost-S h a rin g

Agreements to o k e f f e c t in th e m id -1 9 7 0 's , th e Commonwealth's c o n tr ib u tio n to

fin a n c in g i n s t i t u t i o n a l s e rv ic e s doubled from 21.8 p e r c e n t in th e year

1974-75 to 4 2 .8 p er c e n t in the ye ar 1975-76 (Table 1 1 ). Appendix K again

p ro v id e s f u r t h e r d e t a ils o f these changes.

The Commission has been t o ld th a t the a d d itio n a l fin a n c e these changes

in tro d u c e d in t o th e h ig h -c o s t segment o f h e a lth s e rv ic e s has generated and

u n d e rw ritte n some o f th e c o s t in c re a s e s s in c e the m id -1 9 7 0 's . Some

subm issions have a ls o observed th a t th e p ro v is io n o f in te r-g o v e rn m e n t

fu n d in g on t h is s c a le and in t h is manner has had an im pact on th e management

a ttitu d e s and b e h a vio u r o f h o s p ita l a d m in is tra to rs and m edical p r a c titio n e r s .

F in a n c in g - Non-Government

The p r in c ip a l sources o f non-governm ent fin a n c e are H e a lth Insurance

o rg a n is a tio n s and payments from in d iv id u a ls . A lthough th e in fo rm a tio n and

o b s e rv a tio n s p re sen te d so fa r have focussed on th e c o s t to th e n a tio n o f i t s

h e a lth b i l l , th e Commission i s aware th a t th e p u b lic is concerned about the

c o s t to th e in d iv id u a l o f o b ta in in g m ed ica l and h o s p ita l ca re and in s u rin g

a g a in s t th e c o s t o f illn e s s .

The in s u ra n c e is s u e i s a complex one. The c u rre n t arrangem ents are s e t o u t

in Appendix I . The Funds' c o n tr ib u tio n to th e c o s t o f fin a n c in g both

i n s t it u t i o n a l and n o n - in s t it u t io n a l s e rv ic e s d e c lin e d s h a rp ly d u rin g th e

ye ar 1975-76, when u n iv e rs a l in su ra n ce under Medibank was f i r s t in tro d u c e d ,

b u t i t rose s te a d ily th e r e a fte r u n t i l th e ye ar 1977-78. Over th e same

p e rio d , th e re were in c re a s e s in recognised h o s p ita l bed-day charges, most

r e c e n tly to $50 per day f o r shared and $75 per day f o r p riv a te

accommodation. Bed-day charges in p r iv a te h o s p ita ls have been v a ria b le .

These in c re a s e s in ch arges, as w e ll as th e le v e l o f membership o f Funds, are

among many fa c to r s c o n tr ib u tin g tow ards r is in g insurance c o n tr ib u tio n ra te s .

In th e case o f u n in su re d persons, p u b lic h o s p ita l care has s in c e 1975 been

p ro v id e d fre e o f charge in a l l S ta te s w ith o u t a means te s t . P re v io u s ly th is

had been th e case o n ly in Queensland. The c o s ts o f p ro v id in g h o s p ita l-b a s e d

s e rv ic e s fo r u nin su re d persons have been shared between Commonwealth and

S ta te governments s in c e th a t tim e .

I t has been p ut to th e Commission th a t the r e la t iv e d e c lin e in p a tie n t

charges has encouraged th e use o f h o s p ita l s e rv ic e s . C e rta in ly d ir e c t

payments by in d iv id u a ls have d e c lin e d as a p ro p o rtio n o f c u rre n t h e a lth

e x p e n d itu re ( Table 1 1 ). However, more work would be re q u ire d to assess the

im pact o f u ser charges on the use o f h o s p ita l f a c i l i t i e s .

A lthough p a tie n ts may e le c t to consume more o f a s e rv ic e when i t s r e la t iv e

p ric e f a l l s , i t i s recognised th a t d o c to rs are key d e c is io n makers in

choices about h e a lth care and tre a tm e n t. I t is s a id th a t once a p a tie n t

p re sen ts to a d o c to r, the l a t t e r assumes th e b u lk o f r e s p o n s ib ilit y fo r

d e te rm in in g th e p a t ie n t 's consum ption o f h e a lth care reso urces. Through

t h e ir p o s itio n s as p ro v id e rs o f e x p e rt m edical a d v ic e , d o c to rs are a lso

i n f lu e n t i a l in th e a llo c a tio n o f fin a n c ia l resources w ith in h o s p ita ls .

A d m in is tra tiv e Arrangements

The c o m p le x ity o f th e arrangem ents f o r a d m in is te rin g h e a lth s e rv ic e s

in d ic a te s to the Commmission th a t these s e rv ic e s do n o t have, and have never

had, a s in g le lin e o f a u th o r ity , w ith c le a r g u id e lin e s and o b je c tiv e s a t

Commonwealth, S ta te o r s e rv ic e le v e l. Nor are a l l s e c to rs o f h e a lth

s e rv ic e s covered by s im ila r arrangem ents. The Commission has re c e iv e d many

subm issions d e a lin g w ith aspects o f t h is s u b je c t and has gained a d d itio n a l

in fo rm a tio n d u rin g th e course o f i t s v i s i t s and p u b lic h e a rin g s . Much work

remains to be done on assessing these arguments. Moreover, a d m in is tra tiv e

arrangem ents w ith in th e S ta te s have been m o d ifie d d u rin g th e p e rio d sin ce

1968-69; fo r example th re e S ta te s have rep la ce d s e v e ra l departm ents w ith

r e s p o n s ib ilit ie s f o r h e a lth s e rv ic e s w ith s in g le H ea lth Commissions.

The Commission has been t o ld many tim es th a t th e budgeting requirem ents

a tta ch e d to government fu n d in g o f h o s p ita ls have c o n trib u te d to c o s t

in c re a s e s . I t has been e s p e c ia lly emphasised th a t the lin e - b y - lin e

budgetary r e p o r tin g re q u ire d f o r P a rlia m e n ta ry a p p ro p ria tio n s has been a

d is in c e n tiv e to h o s p ita l e ffic ie n c y .

The Commission i s aware to o o f th e way in which h o s p ita ls and r e la te d h e a lth

s e rv ic e s have developed in t h is c o u n try and o f the associated s tro n g

lo y a lt ie s to p a r t ic u la r s e rv ic e in s t it u t io n s . F urtherm ore, i t i s aware th a t

in p ro v id in g p ro fe s s io n a l s e rv ic e s where q u a lity must be assured,

p ro fe s s io n a l d e c is io n s must be c a r e fu lly p ro te c te d . Cost o r e ffic ie n c y

cannot be the o n ly c o n s id e ra tio n in the h e a lth s e rv ic e s .

Workload

I t has been suggested by some th a t th e h e a lth care s e rv ic e s are being

p resented w ith a g re a te r w orkload than te n ye a rs ago. The A u s tra lia n

p o p u la tio n in c re a s e d as d id th e number o f people aged 65 and o v e r, between

the census ye ars 1966 and 1976 (T a b le 1 8).

T o ta l p o p u la tio n e s tim a te s are a v a ila b le f o r th e years 1969 and 1979, and

in o ic a te a r is e o f 17 p er c e n t, from 12.1 m illio n to 14.4 m illio n . Thus the

number o f p eople who m ig ht p re s e n t to a l l areas o f th e h e a lth s e rv ic e s , and

in p a r t ic u la r to h o s p ita ls , has in c re a s e d . Table 3 in d ic a te s th a t o v e r a ll

h e a lth e x p e n d itu re fo r each person in A u s tr a lia has grown in a c tu a l money

v a lu e s from $121 in 1968-69 to $544 in 1978-79. In r e a l te rm s, th e increase

was to $166. Hence, w h ile p o p u la tio n grow th must have had an im pact on

h e a lth s e rv ic e u t i l i s a t i o n and h e a lth c o s ts , t h is im pact is n o t r e a d ily

q u a n tifia b le .

W ith in th e p u b lic h o s p ita l s e c to r th e in c re a s e in p er person e x p e n d itu re , in

a c tu a l money v a lu e s , has been from $30.20 to $185.90 (Table 1 3 ). The re a l

in c re a s e , a f t e r d e fla tin g t o t a l e x p e n d itu re by th e I.P .D ., has been from

$30.20 to $55.50 per person.

Table 18 A u s tr a lia n P o p u la tio n , 1966 to 1978

No. o f

Males

No. o f

Females

T o ta l P o p u la tio n

Males 65+ yrs

Females 65+ yrs T o ta l 65+ y rs

% % %

1966 5 816 359 5 734 103 11 550 462 7.1 10.0 8.5

1971 6 506 224 6 431 023 12 937 247 7.0 9.9 8.4

1976 6 979 380 6 936 129 13 915 509 7.4 10.4 8.9

1978(e) 7 139 100 7 109 400 14 248 500 7.7 10.7 9.2

Source: A u s tr a lia n Bureau o f S t a t is t ic s

N ote: (e) E stim ate

Bed C a p a city and U t i l is a t i o n

I t has been p u t to th e Commission th a t b oth h o s p ita l c a p a c itie s and the

u t i l i s a t i o n o f beds have increa se d and th a t t h is may be a fa c to r behind c o st

in c re a s e s . T able 19 shows the number o f approved beds in p u b lic and p riv a te

h o s p ita ls and n u rs in g homes a t 30 June 1969, 1976 and 1979.

Table 19 Approved Beds in P u b lic and P riv a te H o s p ita ls and N ursing Homes

At 30 June 1969 1976 1979

Beds (000s)

Per

Thousand P o p u la tio n

Beds (000s)

Per

Thousand P o p u la tio n

Beds (000s)

Per

Thousand P o p u la tio n

P u b lic H o s p ita ls 62.7 5.06 69.5 5.00 72.2 5.01

P riv a te H o s p ita ls 12.3 0.99 17.4 1.25 18.8 1.30

T o ta l - H o s p ita ls 75.0 6.06 87.0 6.25 91.0 6.31

N ursing Homes 40.1 3.24 55.6 3.99 61.4 4.26

Source: Annual R eports, Commonwealth D ire c to r-G e n e ra l o f H ealth ABS p o p u la tio n fig u r e s

Notes: Excludes R e p a tria tio n , Defence and p s y c h ia tr ic in s t it u t io n s

D iffe re n c e s between sum o f components and t o t a ls due to rounding.

W hile a c tu a l numbers o-f approved p u b lic h o s p ita l beds have increa se d over the

p e rio d , th e re has been ve ry l i t t l e change in th e number o f beds per thousand

p o p u la tio n . Approved beds in p r iv a te h o s p ita ls have incre a se d both in a c tu a l

numbers and p er thousand p o p u la tio n , as have

n u rs in g home beds.

As Table 20 shows, th e number o f occupied bed days in p u b lic h o s p ita ls in

A u s tr a lia in c re a se d over the p e rio d a ltho ug h th e ra te per thousand

p o p u la tio n d e c lin e d s l i g h t l y . Occupied bed days in p r iv a te h o s p ita ls

increa se d as w e ll, both in a b s o lu te numbers and p e r thousand p o p u la tio n

which r e f le c t s in p a rt th e in c re a s e d p riv a te h o s p ita l bed numbers a lre a d y

re fe rre d to .

When exam ining th e movement in occupied bed days th e s e n s it iv it y o f t h is

in d ic a to r to v a r ia tio n s in le n g th o f sta y must be kept in mind. The average

le n g th o f s ta y o f in - p a tie n ts in h o s p ita ls has been d e c lin in g n a tio n a lly fo r

a number o f y e a rs . T his has had th e e ffe c t o f fre e in g up p re v io u s ly

occupied beds.

The observed d e c lin e (Table 20) in th e number o f occupied bed days per

thousand p o p u la tio n in p u b lic h o s p ita ls suggests th a t increa se s in the

number o f p a tie n ts being tre a te d in p u b lic h o s p ita ls have p a r tly o ff s e t the

e ffe c t o f d e c lin in g le n g th o f s ta y .

The evidence examined suggests th a t the number o f in - p a tie n ts tre a te d in

p u b lic h o s p ita ls has been grow ing f o r many y e a rs . The number o f in - p a tie n ts

tre a te d in p u b lic h o s p ita ls per thousand p o p u la tio n i s now g re a te r than a t

1969; some e vidence o f t h i s i s presented in Appendix L.

Table 20 Occupied Bed Days in P u b lic and P riv a te H o s p ita ls (a)

A t 30 June 1969 1976 1979(b)

Occupied Bed-Days (000s) per 000

pop

Occupied Bed-Days (000s) per 000

pop

Occupied Bed-Days (000s) per 000

pop

P u b lic H o s p ita ls

P r iv a te H o s p ita ls 15 895 3 131 1309

258

17 625 A 4 21 (c) 1273 319

17 796 4 339

1242 303

T o ta l (d ) 19 026 1 567 22 046 1592 22 135 1544

Sources: Commonwealth Department o f H e a lth in c lu d in g P u b lic and P riv a te H o s p ita ls S t a t i s t i c a l Summary 1970-71 H e a lth Insurance Commission, Annual R eport 1975-76 A u s tr a lia n Bureau o f S t a t is t ic s p o p u la tio n fig u re s

N otes: (a ) Excludes R e p a tria tio n and Defence I n s t it u t io n s

(b) L a te s t a v a ila b le e s tim a te s

(c ) E stim a ted annual ra te

(d) T o ta ls may n o t add due to rou nd ing

In te r s ta te V a r ia tio n s in C apacity and U t ilis a t io n

The n a tio n a l tre n d s in bed p ro v is io n and u t i l i s a t i o n d e scrib e d in Tables 19

and 20 mask c o n s id e ra b le S ta te v a r ia t io n . Table 21 p re sen ts s im ila r

in fo rm a tio n f o r th e S ta te s and T e r r it o r ie s .

Since V ic to r ia w ith the second h ig h e s t p o p u la tio n , has s ig n if ic a n t ly fewer

approved beds and occupied bed days, th e n a tio n a l fig u r e i s reduced. By

c o n tr a s t, W estern A u s tr a lia , Tasmania and New South Wales have a r e la t iv e ly

h ig h le v e l o f bed p ro v is io n and u t i l i s a t i o n .

Over th e te n y e a r p e rio d , South A u s tr a lia and Queensland have shown q u ite

d if f e r e n t tre n d s . In Queensland, th e le v e l o f bed numbers and bed days per

thousand p o p u la tio n has f a lle n from a h ig h le v e l in 1969, whereas in South

A u s tr a lia , th e le v e l o f bed p ro v is io n and u t i l i s a t i o n has r is e n c o n s id e ra b ly

from 1969 le v e ls . As w ith the n a tio n a l tre n d in occupied bed days, a f a l li n g

average le n g th o f s ta y in a l l S ta te s has had an im p act.

Table 21 P u b lic H o s p ita ls - Bed C a p a city and U t i l is a t i o n by S ta te , 1968-69 and 1978-79

NSW V ic . Q ld. S.A. W.A. Tas. N .T. A .C .T. A u s tr a lia

Approved beds per thousand p o p u la tio n

( a t 30 June) 1969 5.31 3.99 6 .70 3.97 5.53 5.70 7.75 4 .82 5.06

1979 5.47 3.95 5.53 5.06 5.24 5.43 6.67 4.27 5.01

Occupied Bed-Days per thousand p o p u la tio n

( a t 30 June) 1969 1430 1070 1550 1010 1390 1320 2370 1610 1310

1979 1408 1032 1163 1248 1301 1289 1664 1197 1242

Sources: Commonwealth Department o f H ea lth in c lu d in g P u b lic and P r iv a te H o s p ita ls S t a t i s t i c a l Summary 1970-71 A u s tra lia n Bureau o f S t a t is t ic s p o p u la tio n fig u r e s .

N otes: Excludes R e p a tria tio n H o s p ita ls

L a te s t a v a ila b le e s tim a te .

Table 13 showed marked d iffe r e n c e s in th e p e r person c o s ts and c o s ts per

occupied bed day i n th e reco gn ised p u b lic h o s p ita ls i n th e S ta te s and

T e r r it o r ie s . Comparing t h is ta b le w ith Table 21 suggests th a t th e le v e l o f

p ro v is io n and u t i l i s a t i o n o f beds in th e S ta te s in flu e n c e s h o s p ita l

o p e ra tin g c o s ts . I t has been p u t to th e Commission th a t these v a r ia tio n s in

c o s ts , bed p ro v is io n and u t i l i s a t i o n may in d ic a te d iffe re n c e s i n th e way in

which th e p u b lic h o s p ita ls are a d m in is te re d in the S ta te s , and in the degree

o f b udgetary c o n tr o l e x e rc is e d w ith in each. F u rth e r work would be re q u ire d

to co ve r th e im p a ct o f the p ro v is io n o f o th e r i n s t it u t i o n a l s e rv ic e s in each

S ta te .

S e rv ic e P ro v is io n

The in d ic a to r s used so f a r lea ve u nreso lved th e q u e s tio n o f w hether th e re

has been an in c re a s e in th e in t e n s it y o f ca re which people re c e iv e now

compared w ith te n years ago. T h is i s an is s u e o fte n m entioned in

subm issions and on v i s i t s . C e r ta in ly th e v i s i t s made p la in to th e

Commission th e c o m p le x ity o f tre a tm e n t flo w in g from advances t h a t have been

made in c l i n i c a l scien ce and te c h n o lo g y . T h is may in d ic a te the a b i l i t y o f

h o s p ita ls to p ro v id e more and b e tte r s e rv ic e s f o r each p a tie n t, b u t th e re i s

no p re c is e e vidence d em on stratin g th a t t h is i s the case.

On th e o th e r hand, i t i s e v id e n t th a t p ro v id in g s e rv ic e s to th e p u b lic

re q u ire s expensive around the c lo c k s t a f f in g , o fte n by s k ille d and h ig h ly

p a id s t a f f . For example, s e v e ra l h o s p ita ls p o in te d o u t in t h e i r subm issions

the grow th in th e c o s t o f p e n a lty payments and o n - c a ll allow ances fo r

v a rio u s c a te g o rie s o f s t a f f , in p ro v id in g d ia g n o s tic s e rv ic e s around the

c lo c k . F u rth e rm o re , the Com m ission's survey p ro vid e d some evidence to

suggest an in c re a s e in th e number o f X -ra ys and p a th o lo g y te s ts perform ed in

th e h o s p ita ls w ith more than 500 beds. Table 22 shows these changes as w e ll

as a measure o f h o s p ita l pharmacy use.

A number o f h o s p ita ls in the survey had expanded th e range o f s e rv ic e s

p ro v id e d s in c e 1968-69; 17 re p o rte d commencing d o m ic ilia r y care s e rv ic e s , 14

M eals-on-W heels and 13 Day C en tres. A l l these add to the c o s t o f running

h o s p ita ls .

Table 22 In cre ase s in D ia g n o s tic S e rv ic e s , 1968-69 to 1978-79

X-Rays______ Pathology Tests Pharmacy Issues

Number Increase Number Increase Number Increase

H o s p ita l in over in over in over

Number 1979 1969 1979 1969 1979 1969

% % %

1 77 334 65 1 145 804 3405 n .a . n .a .

2 60 802 46 1 335 932 243 848 956 80

3 80 709 14 2 260 035 250 1 390 234 68

4 48 628 38 1 689 628 n .a . 614 338 n .a .

5 57 620 70 402 642 n .a . 263 813 n .a .

6 33 583 15 1 550 307 416 375 640 150

7 38 721 7 n .a . n .a . n .a . n .a .

Source: Survey r e s u lts (See a ls o Appendix H ).

Technology

There i s no evidence y e t b e fo re th e Commission which enables i t to measure

the im pact o f techn olo gy on c o s ts . Many subm issions have drawn a tte n tio n to

t h is fa c to r and th e Commission i s aware th a t the 1978 r e p o rt o f th e Committee

on A p p lic a tio n s and Costs o f Modern Technology in M edical P ra c tic e emphasised

i t s im p o rta n ce . I t has been p o in te d o u t th a t th e a c t i v it ie s and fu n c tio n s o f

h o s p ita ls are now more a p p ro p ria te ly describ e d in term s o f th e s e rv ic e s they

p ro v id e , r a th e r th an in term s o f beds o r bed-days. In e f f e c t , many h o s p ita ls

are becoming c e n tre s fo r th e o rg a n is a tio n and p ro v is io n o f h igh technology

s e rv ic e s . The Commission has been inform ed th a t in th e m edical sphere, the

in tr o d u c tio n o f new te chnology is seldom la b o u r s a vin g . The fu r th e r p o in t

has been made th a t te c h n o lo g ic a l advances can be c o s tly because s in g le item s

are expensive to purchase, i n s t a l l and m a in ta in , even when o n ly a few e x is t,

and th e example o fte n guoted has been th e 'C .A .T .1 scanner. These advances

can a ls o be c o s tly as fo r example d isp o sa b le s y rin g e s when used in g re at

g u a n titie s , even i f in d iv id u a l ite m s are cheap.

M a tte rs which have been m entioned as u n d e rly in g the im pact o f technology on

c o s ts are th e d u p lic a tio n o f h ig h -c o s t ite m s , ro u tin e use where o n ly s p e c ific

in d ic a tio n s are as y e t known to e x is t and the spread o f te c h n o lo g ic a l

advances so th a t t h e i r c o s ts are f e l t w e ll beyond the te a ch in g h o s p ita ls .

The Commission has noted th ese p o in ts and i s aware o f th e need to in v e s tig a te

t h is m a tte r fu r t h e r .

Non-Labour Costs

In a c tu a l money te rm s, payments f o r a d m in is tr a tio n , food and o th e r s e rv ic e s

have a l l in c re a s e d and payments fo r m edical and s u rg ic a l s u p p lie s have

in cre a se d m arkedly from 1968-69.

The r a te o f in c re a s e was shown g ra p h ic a lly in F ig u re 2 and i t appears th a t

in re c e n t y e a rs , n o n -la b o u r c o s ts have grown more r a p id ly than s a la rie s and

wages.

How are these reso u rce s p u t to use? Have th e re been elem ents here which

have c o n tr ib u te d to c o s t incre a se s? Some evidence b e fo re the Commission

suggested th a t th e p urcha sing o f food and o th e r s u p p lie s , in c lu d in g drugs,

has been w a s te fu l. The r e p o r t o f th e P u b lic Accounts Committee in South

A u s tr a lia , which devoted p a r t ic u la r a tte n tio n to t h is aspect o f h o s p ita l

c o s t in c re a s e s in th a t S ta te , has been b rought to the Commission's

a tte n tio n . The Commission i s aware o f the view s o f the C o u n c il o f the

A u s tr a lia n H o s p ita ls A s s o c ia tio n th a t th e c o n d itio n s describ e d in South

A u s tr a lia n h o s p ita ls by th e P a rlia m e n ta ry Committee were by no means

c o n fin e d to th a t S ta te . That A s s o c ia tio n a ls o made the p o in t, and the

Commission has s u p p o rtin g e vid en ce, th a t some fa c ts p u t b e fo re th e Committee

and pre sen te d in i t s r e p o rt were m is le a d in g .

These and r e la te d m a tte rs are s t i l l under c o n s id e ra tio n by t h is Commission

and no fir m view has been form ed. The Com m ission's survey o f h o s p ita ls

in d ic a te d t h a t , w ith in h o s p ita ls o f s im ila r s iz e and b ro a d ly s im ila r

fu n c tio n , th e re i s a wide range in c o s ts o f a d m in is tr a tio n , food and

dom estic s e rv ic e s . W hile th e reasons may be complex t h is suggests th a t the

e f fic ie n c y o f h o s p ita ls in p ro v id in g s e rv ic e s may v a ry . Table 23 g ive s a

breakdown o f e x p e n d itu re on n o n -la b o u r ite m s f o r th e s m a lle s t and la r g e s t

h o s p ita ls in th e s u rve y. Again w h ile a l l h o s p ita ls in the survey show

in c re a s e s in these c o s ts , th e r a te o f in c re a s e s between 1968-69 and 1978-79

a ls o v a rie d c o n s id e ra b ly , d e s p ite the o v e r a ll s im i l a r i t y o f th e fin a n c ia l

su p p o rt to which e a r lie r re fe re n c e was made.

Table 23 Non-Labour C osts in H o s p ita ls w ith 6-50 beds and more than 501 beds, 1978-79, Commission Survey ____________________________________________________________________________________________________________ D o lla rs

M edical & S u rg ic a l A d m in is tra tio n Expenses Food S u p p lie s Dom estic Charges

Size Cost per Cost per Cost per Cost per

o f Cost per P a tie n t Cost per P a tie n t Cost per P a tie n t Cost per P a tie n t

H o s p ita l No. Bed-Day T re a te d (a ) Bed-Day T re a te d (a ) Bed-Day_____ T re a te d (a )_____ Bed-Day T re a te d (a )

2 5.35 21.15 13.34 52.70 3.07 12.13

3 1.87 8.10 1.15 5.01 2.00 8.68

4 .27 4.01 1.29 19.21 3.06 45.40

5 .63 16.75 1.26 33.66 2.91 77.58

6 12.37 58.14 16.23 76.26 8.30 39.01

7 6.29 56.74 7.15 64.50 5.90 53.24

6 - 5 0 8 1.49 14.09 2.55 24.06 2.35 22.13

9 2.81 35.87 3.15 40.27 1.69 21.63

Beds 10 1.44 51.13 3.15 111.74 2.21 78.46

11 52.81 112.68 33.00 70.42 24.75 52.82

12 1.37 20.41 1.40 20.89 2.66 39.65

13 .59 13.34 1.66 37.57 2.71 61.35

14 4.62 17.14 12.13 45.01 4.45 16.51

15 1.37 34.36 2.62 65.69 2.71 67.97

16 1.34 7.18 18.18 97.56 3.83 20.57

3.34 13.18

4.03 17.47

1.86 27.62

3.78 100.74

1.65 7.76

2.50 22.53

.69 6.47

1.08 13.74

.54 19.06

3.30 7.04

.54 8.06

.84 19.00

3.96 14.69

.79 19.81

3.07 16.46

MEAN $6.15 $31.59 $7.73 $50.95 $4.69 $39.98 $2.22 $21.71

1 24.62 215.91

2 32.47 286.82

3 16.94 136.89

501 + 4 13.60 82.13

5 28.85 255.63

Beds 6 16.49 146.05

7 9.83 61.22

7.75 67.92 4.17

5.48 48.39 4.85

3.47 28.02 2.96

9 .84 59.39 4.09

7.81 69.17 3.00

6.55 58.00 4.17

4.57 28.45 3.71

36.56 5.25 46.04

42.81 8.44 74.53

23.96 2.39 19.32

24.70 1.51 9.12

26.63 6 .95 61.57

36.91 4.40 38.96

23.13 1.61 10.00

$34.99 $4.36 $37.07

Note: (a ) In p a tie n ts o n ly .

For m e d ica l and s u r g ic a l s u p p lie s , A u s tra lia -w id e in fo rm a tio n shows th e

r e la t iv e r a p id it y w ith w hich t h is ite m has r is e n sin c e 1976 when compared

w ith in c re a s e s in o th e r payments in p u b lic h o s p ita ls . I t i s g e n e ra lly

expected th a t t h is item w i l l c o s t more in te a c h in g h o s p ita ls because they

serve a s ic k e r p o p u la tio n and o f f e r a more in te n s iv e range o f s e rv ic e s

r e q u ir in g more equipm ent. These o b s e rv a tio n s were borne o u t by th e survey.

F i n a ll y , th e Commission has observed th ro u g h o u t A u s tr a lia the u pgrading o f

f a c i l i t i e s in th e h e a lth s e rv ic e s , which perhaps r e f le c t s th e o p e ra tio n in

th e m id -1 9 7 0 's o f th e H o s p ita ls Development Program and th e in c lu s io n o f

m inor c a p it a l w orks in th e C ost-S h a rin g Agreements.

H o s p ita l E f fic ie n c y

In c o n s id e rin g h o s p ita l e f f ic ie n c y , th e Commission i s aware th a t most

A u s tr a lia n h o s p ita ls and r e la te d s e rv ic e s are n o t and never have been

re q u ire d to make a p r o f i t , a c h a r a c te r is t ic shared w ith many p u b lic ly

fin a n c e d s e rv ic e s . W hile th e re i s no reason why t h is should be o th e rw is e ,

th e p r o f i t m o tive as an in c e n tiv e to e ffic ie n c y i s n o t p re se n t in much o f

t h is s e rv ic e in d u s tr y . In a d d itio n , th e Commission has been impressed in i t s

v i s i t s around th e n a tio n , by th e range in s iz e and c o m p le x ity o f f a c i l i t i e s ,

some o f w hich a t le a s t a re d ic ta te d by the o b lig a tio n to p ro v id e s e rv ic e s to

a l l A u s tr a lia n s . T h is to o must p la c e a l i m i t on e ffic ie n c y and may have

c o n tr ib u te d to th e c o s t in c re a s e s .

An u n d e rly in g fa c to r co nside red im p o rta n t by many both in subm issions and on

v i s i t s , i s th e b udgetary process under which th e h o s p ita ls have operated and

in p a r t ic u la r , th e d is in c e n tiv e s which th e Commission was to ld are in h e re n t

in those b udgets. These m a tte rs have been d e scrib e d in fin e d e t a il.

The Commission has taken p a r t ic u la r note o f th e systems o f a c co u n tin g in

h o s p ita ls and i s aware o f th e developm ent, to d if f e r e n t degrees o f d e t a il,

o f d e p a rtm e n ta l c o s tin g systems by v a rio u s h o s p ita ls and h e a lth

a u t h o r it ie s . I t i s e v id e n t from d is c u s s io n s and v i s i t s th a t th e re is a la c k

o f in fo r m a tio n on c o s ts o f s e rv ic e s f o r use by management and p ro fe s s io n a ls .

The Commission has been inform e d th a t , in th e f i r s t p a r t a t le a s t, o f the

te n y e a r p e rio d under c o n s id e ra tio n , co n tin u o u s tim e ly r e p o r tin g o f h o s p ita l

perform ance, u s in g a p p ro p ria te in d ic a to r s , has n ot always been made.

I t would seem th a t th e a p p lic a tio n o f advances in h o s p ita l management and

m anagerial te ch n iq u e s has lagged behind th a t o f advances in c l i n i c a l science

and te c h n o lo g y so n o tic e a b le w ith in h o s p ita ls . W hile t h is m anagerial fa c to r

cannot be measured, i t may have lim ite d the c a p a b ilit y o f the h e a lth

s e rv ic e s to respond by im p ro vin g t h e i r e ffic ie n c y to a lte r e d c o n d itio n s o f

fin a n c ia l s u p p o rt. I t may a ls o be a fa c to r lim i t i n g th e awareness o f c o s ts

among h o s p ita l s t a f f a t a l l le v e ls .

I t has been suggested to th e Commission th a t th e re i s l i t t l e o r no t r a d it io n

o f s tre a m lin in g th e way in which s e rv ic e s are p ro vid e d to p a tie n ts b u t the

t r a d it io n a l measures o f h o s p ita l e ffic ie n c y shed l i t t l e l i g h t on t h is

q u e s tio n . The p o in t has a lre a d y been made th a t h o s p ita ls have in g eneral

reduced t h e i r average p e rio d o f s ta y f o r in - p a tie n ts o ver th e te n year

p e rio d . The m ajor e x c e p tio n i s where h o s p ita ls are s e rv in g in th e main an

e ld e r ly f r a i l p o p u la tio n . For example, in c o u n try h o s p ita ls th e Commission

has been t o ld th a t t h is accounts f o r the lo n g p e rio d s o f s ta y .

H ealth P r i o r i t i e s

The Commission has been t o ld th a t one o f th e u n d e rly in g causes o f c o s t

in c re a s e s has been the emphasis on c u ra tiv e r a th e r than p re v e n tiv e s e rv ic e s

and th a t t h is i s r e fle c te d in th e much g re a te r amounts spent on acute care

w ith in h o s p ita ls r a th e r than community h e a lth , g e r ia t r ic o r r e h a b ilit a t io n

s e rv ic e s . I t i s e v id e n t from Table 4 th a t over h a lf th e h e a lth b i l l is

spent in h o s p ita ls o r o th e r in s t it u t io n s and th a t t h is has been so

th ro u g h o u t th e p a s t te n y e a rs . .

More fundam ental q u e stio n s have been ra is e d b e fo re th e Commission. I t has

been s a id th a t the h e a lth s e rv ic e s should be p ro v in g t h e ir w orth through

improvements in th e h e a lth o f th e n a tio n , r a th e r than by how many c l i n i c a l

s e rv ic e s are p ro v id e d , o r how w e ll t h is i s done. T his comment i s g e n e ra lly

in the c o n te x t o f statem ents th a t h o s p ita l m edicine, based on the

a p p lic a tio n o f m edical science and te c h n o lo g y, has reached the p o in t o f

d im in is h in g re tu rn s and th a t a r e v is io n o f p r i o r i t i e s may be necessary.

The Commission co n s id e rs th a t th e p r i o r i t i e s in h e a lth s e rv ic e s o ver the

p a st te n ye ars may w e ll have been a fa c to r behind th e in c re a s e in h e a lth

c o s ts and i s aware o f re c e n t e f f o r t s in h e a lth prom otion and h e a lth

e d u c a tio n . I t i s a ls o aware th a t th e c o s ts in v o lv e d when th e d is a b le d o r

e ld e r ly are looked a fte r a p p ro p ria te ly may be le s s , altho ug h th is re q u ire s

th e p ro v is io n o f s u ita b le a lte r n a tiv e s .

SUMMARY

The f a l l i n g v a lu e o f money has been a m ajor fa c to r in r is in g h e a lth

e x p e n d itu re s . D uring th e e a r ly and m id -1 9 7 0 's t h is was most n o tic e a b le in

th e r is in g p r ic e o f la b o u r in what i s a la b o u r -in te n s iv e s e rv ic e

'in d u s t r y '. The a c tio n s o f governments, a r b it r a t io n c o u rts , p ro fe s s io n a l

a s s o c ia tio n s , u n io n s and wages boards, to g e th e r w ith em ployee-em ployer

agreem ents, have a l l c o n tr ib u te d . S ubsequently, th e changes in government

fin a n c in g o f h e a lth s e rv ic e s , e s p e c ia lly o f p u b lic h o s p ita ls , appear to have

compounded th e e f f e c t . S ince 1976, however, h o s p ita l n o n -la b o u r c o s ts

appear to have been in c re a s in g a t a fa s te r r a te than la b o u r c o s ts .

W hile th e o v e r a ll bed c a p a c ity o f p u b lic h o s p ita ls has n o t expanded, th e

numbers o f b oth p r iv a te and n u rs in g home beds has in c re a s e d . There is

evidence th a t more p a tie n ts are b eing tre a te d more in te n s iv e ly th an was th e

case in 1969. An in c re a s e in p o p u la tio n , a s s o c ia te d w ith r is in g community

and p ro fe s s io n a l e x p e c ta tio n s , th e ageing s o c ie ty and th e lo n g -s ta n d in g

d e s ire o f i n s t it u t i o n s to expand, have a l l c o n trib u te d to th e increa se d

in t e n s it y o f c a re . F a c to rs such as th e im p act o f te c h n o lo g y , th e e ffic ie n c y

o f i t s use, th e e f f ic ie n c y o f h o s p ita ls g e n e ra lly and r is in g d o c to r numbers

have had some in flu e n c e on c o s ts , b u t th e Commission has i n s u f f ic ie n t

evidence a t t h is stage to express a view on t h e i r r e la t iv e im p orta nce . The

Commission a ls o acknowledges th e d iffe re n c e s between S ta te s and T e r r it o r ie s

and between h o s p ita ls o f d if f e r e n t typ es and s iz e s . The v a r ia tio n s in co st

which have been observed, however, are so marked th a t th e Commission w i l l

lo o k c lo s e ly a t sta n d a rd s and systems o f management across a l l le v e ls o f the

h e a lth system .

The Commission a ls o re s e rv e s judgem ent on th e im portance o f a d m in is tr a tiv e

m achinery w ith in the o v e r a ll h e a lth system, in which no s in g le lin e o f

a u th o r ity has e ver been p re s e n t, and on th e a p p ro p ria te n e s s o f th e p re se n t

d is t r ib u t io n o f h e a lth e x p e n d itu re s between v a rio u s ty p e s o f c a re . These

u n re so lve d is s u e s are c lo s e ly lin k e d to th e in v e s tig a tio n o f th e o th e r Terms

o f Reference and w i l l occupy th e C om m ission's a tte n tio n in th e rem aining

months o f th e In q u ir y .

In c o n s id e rin g th e evidence b e fo re i t so f a r , th e Commission has observed

th a t many o f th e fa c to rs th o u g h t to in c re a s e c o s ts are s t i l l o p e ra tin g . The

Commission w i l l pay p a r t ic u la r a tte n tio n to th e s e , w ith o u t p re c lu d in g an

in v e s tig a tio n o f a l l th e m a tte rs th a t i t has been asked to address. They

in c lu d e th e H o s p ita ls C o st-S h a rin g Agreements and o th e r aspects o f

Commonwealth-State fin a n c ia l r e la t io n s , th e budgetary process a t a l l le v e ls

o f h e a lth s e rv ic e s , the im pact o f d o c to r numbers, h e a lth in su ra n ce and user

payments and th e a p p ro p ria te n e s s o f the use o f a c u te -c a re f a c i l i t i e s .

I n s t it u t io n s o th e r than p u b lic h o s p ita ls and n o n - in s titu t io n a l s e rv ic e s a ls o

w a rra n t fu r t h e r e xam in a tion .

The Commission w i l l n o t f a i l to face up to changes th a t are necessary and

p r a c tic a b le , being aware, however, th a t sharp changes would n ot be welcomed

by anyone. The Commission has been asked to in q u ir e in t o and make

recommendations about an o ld , v a s t, complex, p a r tly re lig io u s -b a s e d ,

c h a r ita b le , human s e rv ic e o rie n te d s e c to r o f s o c ie ty . As Fuchs has s a id ,

'where h e a lth i s concerned, th e d e s ire to l i v e , to be w e ll, to m a in ta in

f u l l command over o n e 's f a c u lt ie s and to see o n e 's love d ones fre e from

d is e a s e , d i s a b i l i t y and prem ature death are among th e most s tro n g ly ro o te d o f a l l human d e s ir e s '.

We th e re fo re have th e honour to p re s e n t t h is , our In te rim R ep ort, in

accordance w ith our L e tte rs P a te n t.

Dated t h is t h i r t i e t h day o f June, 1980.

J.H . Jamison

J .S . Yeatman

C.W.L. de Boos

APPENDIX A - COMMONWEALTH LETTERS PATENT

COMMONWEALTH OF AUSTRALIA

ELIZABETH THE SECOND, by th e Grace o f God, Queen o f A u s tr a lia and Her o th e r

Realms and T e r r it o r ie s , Head o f the Commonwealth:

TO JAMES HARDIE JAMISON, O.B.E.

JOHN SAMUEL YEATMAN,

CHARLES WILLIAM LANE de BOOS

GREETING:

WHEREAS th e Commonwealth, th e S ta te s and th e N orthern T e r r it o r y are

concerned a t e s c a la tin g e x p e n d itu re on recognized h o s p ita ls (in c lu d in g

h o s p ita ls conducted by th e R e p a tria tio n Commission) and on a s s o c ia te d and

r e la te d i n s t it u t io n s and s e rv ic e s :

AND WHEREAS i t i s the d e s ire o f th e Commonwealth, th e S tates and the

N o rth e rn T e r r it o r y th a t th e h ig h q u a lity o f the care pro vid e d by such

h o s p ita ls , in s t it u t io n s and s e rv ic e s be m a in ta in e d :

AND WHEREAS th e Commonwealth, th e S tate s and th e N orthern T e r r it o r y have

agreed th a t i t is d e s ira b le th a t th e re be a Commission o f In q u iry to make

in q u ir ie s in r e la t io n to these m a tte rs :

NOW THEREFORE We do, by these Our L e tte rs P a te n t issued in Our name by Our

G overnor-G eneral o f th e Commonwealth o f A u s tr a lia on the advice o f the

F ed era l E xe cu tive C ou ncil and in pursuance o f the C o n s titu tio n o f the

Commonwealth o f A u s tr a lia , th e Royal Commissions Act 1902 and o th e r e na b lin g

powers, a p p o in t you to be Commissioners to make in q u ir y , fo r th e purpose o f

th e e x e rc is e and perform ance o f th e powers and fu n c tio n s o f th e P a rlia m e nt

and Government o f th e Commonwealth (in c lu d in g powers and fu n c tio n s in

r e la t io n to the T e r r it o r ie s ) e ith e r alone o r in c o n ju n c tio n w ith the S ta te s ,

in t o the fo llo w in g m a tte rs , namely -

(1 ) fa c to rs behind the c o s ts and e s c a la tio n o f co sts o f h o s p ita ls and

a s s o c ia te d o r r e la te d in s t it u t io n s and s e rv ic e s ;

(2 ) e ffe c tiv e n e s s o f m achinery fo r d e te rm in in g o b je c tiv e s , p o lic y and

resource a llo c a tio n in h o s p ita ls and a sso cia te d o r re la te d

in s t it u t io n s and s e rv ic e s ;

(3 ) ways in which th e e ffic ie n c y o f th e h o s p ita l and a s so cia te d o r

r e la te d h e a lth systems and s e rv ic e s m ight be im proved; and

(4) ways in which c o s t increa se s in h o s p ita l and a sso cia te d o r re la te d

s e rv ic e s can be c o n s tra in e d :

AND WE d ir e c t you to make such recommendations a r is in g o ut o f your in q u ir ie s

in t o th e above m a tte rs as you th in k a p p ro p ria te :

AND, w ith o u t r e s t r ic t in g the scope o f your in q u ir y , We fu r th e r d ir e c t you,

fo r the purposes o f your in q u ir y and recommendations, to g ive p a r tic u la r

a tte n tio n to the fo llo w in g m a tte rs :

(a) th e budgetary process f o r , and c o s t a c c o u n ta b ility o f, h o s p ita ls ;

(b) the e ffe c tiv e n e s s o f e x is tin g o rg a n is a tio n a l s tr u c tu r e s , and the

r e la tio n s h ip s between c e n tr a l h e a lth a u th o r itie s (Commonwealth,

S ta te and T e r r it o r y ) , h o s p ita l boards and managements, and m edical

and o th e r s t a f f , in c lu d in g any c o n s tra in ts a d ve rse ly a ffe c tin g

e ffic ie n c y in h o s p ita l management;

(c ) s t a f f u t i l i s a t i o n and t r a in in g , purchasing p o lic y , management

methods and a d v is o ry s e rv ic e s ;

(d) methods o f payment and c o n d itio n s o f s e rv ic e fo r m edical and o th e r

p r a c titio n e r s u sin g h o s p ita l f a c i l i t i e s and o th e r a s so cia te d o r

re la te d s e rv ic e s , in c lu d in g ch argin g p r a c titio n e r s fo r use o f

h o s p ita l f a c i l i t i e s and re so u rce s, and the e ffe c t o f these m atters

on th e le v e l o f s e rv ic e s p ro v id e d ;

(e) th e e ffe c t o f c u rre n t fin a n c in g methods (in c lu d in g h e a lth

in s u ra n ce ) on h o s p ita l u t i li s a t i o n in c lu d in g the p ro v is io n o f

m edical s e rv ic e s in h o s p ita ls ;

( f ) the r e la tio n s h ip between community based h e a lth and re la te d

s e rv ic e s and h o s p ita ls ;

(g) the value o f a c c re d ita tio n o f h o s p ita ls ;

(h) e x is tin g and p o s s ib le Commonwealth/State arrangements fo r meeting

o p e ra tin g co sts o f h o s p ita ls and a sso cia te d o r re la te d s e rv ic e s ; and

( i ) any o th e r m atters o f s ig n if ic a n t im portance to (1) to (4) above:

AND, w ith o u t r e s t r ic t in g th e n a tu re o f your recommendations, We fu r th e r

d ir e c t you, in making your recommendations, to have regard to th e scope fo r

r a t io n a lis a t io n o f f a c i l i t i e s , s e rv ic e s and resources o f a l l typ e s

( in c lu d in g those p ro vid e d by th e Department o f V e te ra n s' A f f a ir s , p riv a te

h o s p ita ls , m edical p r a c titio n e r s and o th e r h e a lth -c a re p r a c titio n e r s ) and to

any b a r r ie r s to the achievem ent o f such r a t io n a lis a t io n :

AND We a p p o in t you the s a id JAMES HARDIE JAMISON to be the Chairman o f the

s a id Com m issioners:

AND We d ir e c t th a t , fo r th e purpose o f ta k in g evidence, two Commissioners

s h a ll be s u f f ic ie n t to c o n s titu te a quorum and may proceed w ith the in q u ir y

under these L e tte r s P a te n t:

AND We d e c la re th a t you are a u th o riz e d to conduct your in q u ir y in t o th e

m a tte rs m entioned in paragraphs (1 ) to (4) in com bination w ith any in q u ir y

in t o th e same m a tte rs th a t you are d ire c te d o r a u th o ris e d to make by any

Commission is s u e d , o r in pursuance o f any o rd e r o r appointm ent made, by any

o f Our Governors o f Our S ta te s :

AND We fu r th e r d e c la re t h a t , f o r th e purpose o f conducting your in q u ir y , you

are a u th o riz e d to have reg ard to any evidence re c e iv e d by, and any m atters

s u b m itte d to , th e Commissioners a pp o in te d , by L e tte rs P atent issue d in Our

name by Our G overnor-G eneral o f th e Commonwealth o f A u s tr a lia on 29 August

1979, to in q u ir e in to and r e p o r t upon c e r ta in m a tte rs r e la t in g to th e co sts

o f h o s p ita ls and a s s o c ia te d o r r e la te d in s t it u t io n s and s e rv ic e s as i f th a t

evidence had been re c e iv e d by you, o r those m a tte rs had been su b m itte d to

you, as the case may be, fo r th e purposes o f your in q u ir y :

AND We re q u ire you as e x p e d itio u s ly as p o s s ib le to make your in q u ir y and -

( j ) n ot la t e r than 30 June 1980, to fu rn is h to our G overnor-G eneral o f

th e Commonwealth o f A u s tr a lia an in te r im re p o rt o f th e r e s u lts o f

your in q u ir y ; and

(k ) n ot la t e r than 31 December 1980 o r such la t e r date as We may be

pleased to f i x , to fu rn is h to Our Governor-General o f the

Commonwealth o f A u s tr a lia a re p o rt o f the r e s u lts o f your in q u ir y

and your recommendations.

WITNESS His E xce lle n cy S ir Zelman Cowen, K n ig h t o f the Order o f A u s tr a lia ,

K n igh t Grand Cross o f the Most D is tin g u is h e d Order o f S a in t M ichael and

S a in t George, K n ig h t o f the Most Venerable Order o f the H o s p ita l o f S a in t

John o f Jerusalem , one o f Her M a je s ty 's Counsel lea rn e d in the law ,

G overnor-G eneral o f the Commonwealth o f A u s tr a lia and Comm ander-in-Chief o f

the Defence Force.

Dated t h is s ix th day o f March 1980

Zelman Cowen

Governor-G eneral

By His E x c e lle n c y 's Command,

Malcolm F raser

Prime M in is te r

APPENDIX B - TASMANIAN LETTERS PATENT

COMMISSION

ELIZABETH THE SECOND by th e Grace o f God, Queen o f A u s tr a lia and Her Other

Realms and T e r r it o r ie s , Head o f th e Commonwealth.

TO Our tr u s t y and w e ll beloved JAMES HARDIE JAMISON, O .B .E .,

DOCTOR JOHN SAMUEL YEATMAN and CHARLES WILLIAM LANE de BOOS.

GREETING:

WHEREAS we have deemed i t e xp e d ie n t to cause in q u ir y to be made in t o s e v e ra l

m a tte rs h e re a fte r m entioned: Now know ye th a t we re p o sin g g re a t t r u s t and

c o n fid e n c e in yo ur f i d e l i t y d is c r e tio n and i n t e g r it y have a u th o ris e d and

a p p o in te d you th e s a id JAMES HARDIE JAMISON, O .B .E ., DOCTOR JOHN SAMUEL

YEATMAN and CHARLES WILLIAM LANE de BOOS to in q u ir e in to and r e p o r t upon the

fo llo w in g m a tte rs th a t i s to say : -

(1) F a c to rs behind th e c o s ts and e s c a la tio n o f c o s ts o f H o s p ita ls and

a s s o c ia te d o r r e la te d i n s t it u t io n s and s e rv ic e s ;

(2) e ffe c tiv e n e s s o f m achinery fo r d e te rm in in g o b j'e c tiv e s , p o lic y and

reso urce a llo c a tio n in H o s p ita ls and a sso cia te d o r re la te d

i n s t it u t io n s and s e rv ic e s ;

(3) ways in which th e e ffic ie n c y o f the H o s p ita ls and a s s o c ia te d o r

r e la te d h e a lth systems and s e rv ic e s m ight be im proved; and

(4 ) ways in which c o s t in c re a s e s in H o s p ita ls and a s so cia te d o r re la te d

s e rv ic e s can be c o n s tra in e d .

AND WE d ir e c t you to make such recommendations a r is in g o ut o f your in q u ir ie s

in t o th e above m a tte rs as you th in k a p p ro p ria te :

AND, w ith o u t r e s t r ic t in g th e scope o f your in q u ir y , We fu r th e r d ir e c t you,

fo r the purposes o f your in q u ir y and recommendations, to g iv e p a r tic u la r

a tte n tio n to th e fo llo w in g m a tte rs :

(a ) th e budgetary process f o r , and c o s t a c c o u n ta b ility o f, H o s p ita ls ;

(b ) th e e ffe c tiv e n e s s o f e x is tin g o rg a n is a tio n a l s tr u c tu r e s , and the

r e la tio n s h ip s between c e n tr a l h e a lth a u th o r itie s (Commonwealth,

S ta te and T e r r it o r y ) , h o s p ita l boards and managements and m edical

and o th e r s t a f f , in c lu d in g any c o n s tra in ts a dve rse ly a ffe c tin g

e ffic ie n c y in h o s p ita l management;

(c ) s t a f f u t i l i s a t i o n and tr a in in g , purchasing p o lic y , management

methods and a d v is o ry s e rv ic e s ;

(d ) methods o f payment and c o n d itio n s o f s e rv ic e fo r m edical and o th e r

p r a c titio n e r s u sin g h o s p ita l f a c i l i t i e s and o th e r a ssociated o r

r e la te d s e rv ic e s , in c lu d in g chargin g p r a c titio n e r s fo r use o f

h o s p ita l f a c i l i t i e s and reso urces, and the e ffe c t o f these m a tte rs

on th e le v e l o f s e rv ic e s p ro vid e d ;

(e ) th e e ff e c t o f c u rre n t fin a n c in g methods (in c lu d in g h e a lth

in s u ra n ce ) on h o s p ita l u t i l i s a t i o n in c lu d in g th e p ro v is io n o f

m edical s e rv ic e s in h o s p ita ls ;

( f ) the r e la tio n s h ip between community based h e a lth and re la te d

s e rv ic e s a n d -h o s p ita ls ;

(g) th e value o f a c c re d ita tio n o f h o s p ita ls ;

(h) e x is tin g and p o s s ib le Commonwealth/State arrangements fo r meeting

o p e ra tin g co sts o f h o s p ita ls and a sso cia te d o r re la te d s e rv ic e s ; and

( i ) any o th e r m a tte rs o f s ig n if ic a n t im portance to (1) to (4) above:

AND, w ith o u t r e s t r ic t in g th e n a tu re o f your recommendations, We fu r th e r

d ir e c t you, in making your recommendations, to have regard to the scope fo r

r a tio n a lis a tio n o f f a c i l i t i e s , s e rv ic e s and resources o f a l l types

(in c lu d in g those p rovided by th e Department o f V e te ra ns' A f f a ir s , p riv a te

h o s p ita ls , m edical p r a c titio n e r s and o th e r h e a lth -c a re p r a c titio n e r s ) and to

any b a r r ie r s to the achievement o f such r a tio n a lis a tio n ;

AND We a p p o in t you the s a id JAMES HARDIE JAMISON, O .B .E ., to be the Chairman

o f the s a id Commissioners.

AND We d ir e c t t h a t , fo r th e purpose o f ta k in g evid en ce, two Commissioners

s h a ll be s u f f i c i e n t to c o n s titu te a quorum and may proceed w ith th e in q u ir y

under these L e tte r s P a te n t;

AND We d e c la re th a t you a re a u th o ris e d to conduct your in q u ir y in t o th e

m a tte rs m entioned in paragraphs (1 ) to (4 ) under these Our L e tte r s P a te n t in

co m b in a tion w ith any in q u ir y in t o th e same m a tte rs th a t you are d ire c te d o r

a u th o ris e d to make by any commission is s u e d , o r in pursuance o f any o rd e r or

a ppointm ent made, by any o f Our Governors o f Our S tate s o r Our

G overnor-G eneral o f the Commonwealth o f A u s tr a lia :

AND We fu r th e r d e c la re th a t , f o r th e purpose o f co nd uctin g your in q u ir y , you

are a u th o riz e d to have reg ard to any evidence re ce ive d by, and any m atters

s u b m itte d to , th e Commissioners a p p o in te d , by L e tte rs P atent issue d in Our

name by Our Governor o f th e S ta te o f Tasmania on 2nd October 1979, to

in q u ir e in to and re p o rt upon c e r ta in m a tte rs r e la t in g to th e c o s ts o f

h o s p ita ls and a s s o c ia te d o r r e la te d in s t it u t io n s and s e rv ic e s as i f th a t

evidence had been re c e iv e d by you, o r those m a tte rs had been su b m itte d to

you, as th e case may be, fo r th e purposes o f your in q u ir y :

AND Our fu r th e r w i l l and p le a su re i s th a t you s h a ll reduce in to w r itin g

under your hand what you s h a ll d is c o v e r in th e premises and do and s h a ll as

e x p e d itio u s ly as p o s s ib le r e p o r t and c e r t i f y to Us in Our E xe cu tive C ouncil

in Tasmania in w r it in g under your hand your proceedings by fo rc e o f these

p re s e n ts to g e th e r w ith what you s h a ll fin d to u c h in g o r concerning the

prem ises upon such in q u ir y a fo re s a id :

AND We fu r t h e r w i l l and command and by these p resents o rd a in th a t our

Commission s h a ll c o n tin u e in f u l l fo rc e and e ff e c t and th a t you Our s a id

Commissioners s h a ll and may from tim e to tim e proceed in the e x e c u tio n

h e re o f and o f any m a tte r o r th in g h e re in co n ta in e d altho ug h th e same be n ot

c o n tin u e d from tim e to tim e by adjournm ent:

AND We do hereby command a l l and s in g u la r Our lo v in g s u b je c ts whomsoever

w ith in Our s a id S ta te o f Tasmania th a t they be a s s is ta n t to you in the

e x e c u tio n o f these p re s e n ts .

In te s tim o n y w hereof We have caused these Our L e tte rs to be made p a te n t and

the p u b lic s e a l o f Our s a id S ta te o f Tasmania and i t s Dependencies to be

hereunto a ffix e d .

WITNESS Our tr u s t y and w e ll beloved His E xce lle n cy The Honourable S ir

S ta n le y C harles B u rb u ry, K n ig h t Commander o f th e Royal V ic to r ia n Order,

K n ig h t Commander o f the Most E x c e lle n t Order o f the B r it is h Em pire, Governor

in and over the S ta te o f Tasmania and i t s Dependencies in the Commonwealth

o f A u s tr a lia a t Hobart in our s a id S tate t h is t h i r t i e t h day o f A p r il One

thousand n ine hundred and e ig h ty .

S ta n le y C harles Burbury

Governor

By His E x c e lle n c y 's Command,

D.A. Lowe

Prem ier

APPENDIX C - QUEENSLAND LETTERS PATENT

ELIZABETH THE SECOND, by th e Grace o f God, Queen o f A u s tr a lia and Her o th e r

Realms and T e r r it o r ie s , Head o f th e Commonwealth.

TO Our T ru s ty and W e ll-b e lo v e d JAMES HARDIE JAMISON, O .B .E .,

JOHN SAMUEL YEATMAN and CHARLES WILLIAM LANE de BOOS.

GREETING:

KNOW YE THAT WE DO by these p re sen ts issued in Our name by Our Deputy

G overnor, fo r and on b e h a lf o f Our Governor in and over Our S ta te o f

Queensland a c tin g by and w ith th e advice o f Our E xe cutive C o u n cil o f Our

S ta te o f Queensland in pursuance o f "The Commissions o f In q u iry A c ts , 1950

to 1954", and a l l o th e r powers him th e re u n to e n a b lin g , a p p o in t you to be

Commissioners to in q u ir e in t o and re p o rt upon the fo llo w in g m a tte rs : -

(1 ) F a c to rs behind th e co s ts and e s c a la tio n o f c o s ts o f h o s p ita ls and

a s s o c ia te d o r r e la te d in s t it u t io n s and s e rv ic e s ;

(2) e ffe c tiv e n e s s o f m achinery fo r d e te rm in in g o b je c tiv e s , p o lic y and

resource a llo c a tio n in h o s p ita ls and a sso cia te d o r re la te d

in s t it u t io n s and s e rv ic e s ;

(3 ) ways in which th e e ffic ie n c y o f th e h o s p ita l and a s so cia te d o r

r e la te d h e a lth systems and s e rv ic e s m ight be im proved; and

(4) ways in which c o s t increa se s in h o s p ita l and a s so cia te d o r re la te d

s e rv ic e s can be c o n s tra in e d .

AND WE DIRECT YOU to make such recommendations a r is in g o ut o f your in q u ir ie s

in t o th e above m a tte rs as you th in k a p p ro p ria te :

AND, w ith o u t r e s t r ic t in g th e scope o f your in q u ir y , We fu r th e r d ir e c t you,

fo r th e purposes o f your in q u ir y and recommendations, to g ive p a r tic u la r

a tte n tio n to the fo llo w in g m a tte rs :

(a ) the budgetary process f o r , and c o s t a c c o u n ta b ility o f, H o s p ita ls ;

(b) the e ffe c tiv e n e s s o f e x is tin g o rg a n is a tio n a l s tr u c tu r e s , and the

r e la tio n s h ip s between c e n tr a l h e a lth a u th o r itie s (Commonwealth,

S ta te and T e r r it o r y ) , h o s p ita l boards and managements and m edical

and o th e r s t a f f , in c lu d in g any c o n s tra in ts adve rse ly a ffe c tin g

e ffic ie n c y in h o s p ita l management;

(c ) s t a f f u t i l i s a t i o n and t r a in in g , purchasing p o lic y , management

methods and a d v is o ry s e rv ic e s ;

(d ) methods o f payment and c o n d itio n s o f s e rv ic e fo r m edical and o th e r

p r a c titio n e r s u sin g h o s p ita l f a c i l i t i e s and o th e r a sso cia te d o r

r e la te d s e rv ic e s , in c lu d in g ch argin g p r a c titio n e r s fo r use o f

h o s p ita l f a c i l i t i e s and reso urces, and the e ffe c t o f these m atters

on th e le v e l o f s e rv ic e s p ro vid e d ;

(e ) th e e ffe c t o f c u rre n t fin a n c in g methods (in c lu d in g h e a lth

in s u ra n c e ) on h o s p ita l u t i li s a t i o n in c lu d in g the p ro v is io n o f

m edical s e rv ic e s in h o s p ita ls ;

( f ) the r e la tio n s h ip between community based h e a lth and re la te d

s e rv ic e s and h o s p ita ls ;

(g ) the va lu e o f a c c re d ita tio n o f h o s p ita ls ;

(h ) e x is tin g and p o s s ib le Commonwealth/State arrangements fo r meeting

o p e ra tin g co sts o f h o s p ita ls and a sso cia te d o r re la te d s e rv ic e s ; and

( i ) any o th e r m a tte rs o f s ig n if ic a n t im portance to (1) to (4) above:

AND, w ith o u t r e s t r ic t in g th e n a tu re o f your recommendations, We fu r th e r

d ir e c t you, in making your recommendations, to have regard to th e scope fo r

r a tio n a lis a tio n o f f a c i l i t i e s , s e rv ic e s and resources o f a l l types

( in c lu d in g those provided by p riv a te h o s p ita ls , m edical p r a c titio n e r s and

o th e r h e a lth -c a re p r a c titio n e r s ) and to any b a r r ie r s to the achievement o f

such r a tio n a lis a tio n :

AND WE APPOINT YOU the s a id JAMES HARDIE JAMISON to be th e Chairman o f the

s a id Commissioners.

AND WE DIRECT th a t , fo r th e purpose o f ta k in g evidence, two Commissioners

s h a ll be s u f f ic ie n t to c o n s titu te a quorum and may proceed w ith th e in q u iry

under t h is Commission:

AND WE DECLARE th a t you are a u th o riz e d to conduct your in q u ir y in t o the

m a tte rs m entioned in paragraphs (1 ) to (A) in com bination w ith any in q u ir y

in t o th e same m a tte rs th a t you are d ire c te d o r a u th o riz e d to make by any

Commission is s u e d o r in pursuance o f any o rd e r o r appointm ent made by Our

G overnor-G eneral o f th e Commonwealth o f A u s tr a lia :

AND WE FURTHER DECLARE th a t fo r th e purpose o f co nd uctin g your in q u ir y you

are a u th o riz e d to have reg ard to any evidence re c e iv e d by, and any m atters

s u b m itte d to , th e Commissioners a pp ointed by th e p re sen ts issue d in Our name

by Our Deputy Governor fo r and on b e h a lf o f Our Governor in and over Our

S ta te o f Queensland on th e 15th day o f November, 1979, to in q u ir e in t o and

r e p o r t upon c e r ta in m a tte rs r e la t in g to th e c o s ts o f h o s p ita ls and

a s s o c ia te d o r r e la te d i n s t it u t i o n s and s e rv ic e s as i f th a t evidence had been

re c e iv e d by you o r those m a tte rs had been su bm itted to you, as the case may

be, fo r th e purposes o f your in q u ir y :

AND WE REQUIRE YOU as e x p e d itio u s ly as p o s s ib le to make your in q u ir y and -

( j ) n o t la t e r than 30th June, 1980, to fu rn is h to Our Governor in

C o u n c il o f Our S ta te o f Queensland an in te r im re p o rt o f the r e s u lts

o f your in q u ir y ; and

(k ) n o t la t e r than 3 1st December, 1980, o r such la t e r date as We may be

pleased to f i x , to fu rn is h to Our Governor in C o u n c il o f Our S tate

o f Queensland a r e p o rt o f the r e s u lts o f your in q u ir y and your

recom m endations.

IN TESTIMONY WHEREOF, We have caused the P u b lic Seal o f Our s a id S ta te to be

hereu nto a ffix e d .

C.G. W a n sta ll

WITNESS Our T ru s ty and W e ll-b e lo ve d The Honourable S ir Charles Gray

W a n s ta ll, C h ie f J u s tic e o f th e S ta te o f Queensland, Deputy fo r and on b e h a lf

o f His E xce lle n cy Commodore S ir James Maxwell Ramsay, K n igh t Commander o f

the Most D is tin g u is h e d Order o f S a in t M ichael and S a in t George, Commander o f

Our Most E x c e lle n t Order o f th e B r it is h Empire, upon whom has been co n fe rre d

the D eco ra tio n o f the D is tin g u is h e d S e rvice Cross, and Commodore in Our

Royal A u s tra lia n Navy ( R e tir e d ) , Governor in and over th e S tate o f

Queensland and i t s Dependencies in the Commonwealth o f A u s tr a lia , a t

Government House, B risba ne , t h is seventeenth day o f A p r il, in the year o f

Our Lord one thousand n ine hundred and e ig h ty , and in the tw e n ty -n in th year

o f Our R eign. ·

By Command

Joh. B je lk e -P e te rs e n

APPENDIX D - WESTERN AUSTRALIAN COMMISSION

ROYAL COMMISSION

WESTERN AUSTRALIA)

To W it )

W allace Kyle

Governor

By H is E xce lle n cy A ir C h ie f Marshal S ir

W allace K y le , K n ig h t Grand Cross o f the

Most Honourable Order o f th e Bath, K night

Commander o f the Royal V ic to r ia n Order,

Commander o f the Most E x c e lle n t Order o f

the B r it is h Empire, Companion o f the

D is tin g u is h e d S e rvice O rder,

D is tin g u is h e d F ly in g C ross, K n ig h t o f

Grace o f th e Most Venerable Order o f the

H o s p ita l o f S t. John o f Jerusalem ,

Governor in and over the S ta te o f Western

A u s tr a lia and i t s Dependencies in the

Commonwealth o f A u s tr a lia .

TO JAMES HARDIE JAMISON, O .B .E .,

JOHN SAMUEL YEATMAN and

CHARLES WILLIAM LANE de BOOS:

WHEREAS th e Commonwealth, th e S ta te s and th e N orthern T e r r it o r y are

concerned a t e s c a la tin g e x p e n d itu re on recognized h o s p ita ls ( in c lu d in g

h o s p ita ls conducted by th e R e p a tria tio n Commission) and on a s so cia te d and

r e la te d i n s t it u t i o n s and s e rv ic e s ; AND WHEREAS i t is the d e s ire o f the

Commonwealth, th e S ta te s and the N orthern T e r r it o r y th a t the h igh q u a lity o f

th e care p ro v id e d by such h o s p ita ls , in s t it u t io n s and s e rv ic e s be

m a in ta in e d ; AND WHEREAS th e Commonwealth, th e S tate s and th e N orthern

T e r r it o r y have agreed th a t i t is d e s ira b le th a t th e re be a Commission o f

In q u iry to make in q u ir ie s in r e la t io n to these m a tte rs : NOW THEREFORE I ,

the Governor, a c tin g w ith th e a dvice and consent on the E xe cutive C o u n c il,

hereby a p p o in t you James H ardie Jamison O .B .E .; John Samuel Yeatman; and

C harles W illia m Lane de Boos to be a Royal Commission, and you th e s a id

James H ardie Jamison O.B.E. to be i t s Chairman, to in q u ir e in to and re p o rt

upon th e fo llo w in g m a tte rs , namely -

(1) fa c to rs behind th e c o s ts and e s c a la tio n o f co sts o f h o s p ita ls and

a s s o c ia te d o r r e la te d in s t it u t io n s and s e rv ic e s ;

(2) e ffe c tiv e n e s s o f m achinery fo r d e te rm in in g o b je c tiv e s , p o lic y and

resource a llo c a tio n in h o s p ita ls and a sso cia te d o r re la te d

in s t it u t io n s and s e rv ic e s ;

(3) ways in which the e ffic ie n c y o f the h o s p ita l and a sso cia te d o r

r e la te d h e a lth systems and s e rv ic e s m ight be im proved; and

(4) ways in which c o st in c re a s e s in h o s p ita l and a ssociated o r re la te d

s e rv ic e s can be c o n s tra in e d ,

and to make such recommendations in re s p e c t o f the above m a tte rs as you

th in k a p p ro p ria te ; AND, w ith o u t r e s t r ic t in g th e scope o f your in q u ir y , you

are hereby d ir e c te d , fo r th e purposes o f your in q u ir y and recommendations,

to g ive p a r tic u la r a tte n tio n to th e fo llo w in g m a tte rs , namely -

(a) the budgetary process f o r , and c o st a c c o u n ta b ility o f, h o s p ita ls ;

(b) the e ffe c tiv e n e s s o f e x is tin g o rg a n is a tio n a l s tru c tu r e s , and the

re la tio n s h ip s between c e n tr a l h e a lth a u th o r itie s (Commonwealth,

S ta te and T e r r it o r y ) , h o s p ita l boards and managements, and m edical

and o th e r s t a f f , in c lu d in g any c o n s tra in ts adve rse ly a ffe c tin g

e ffic ie n c y in h o s p ita l management;

(c ) s t a f f u t i li s a t i o n and t r a in in g , purchasing p o lic y , management

methods and a d v is o ry s e rv ic e s ;

(d) methods o f payment and c o n d itio n s o f s e rv ic e fo r m edical and o th e r

p r a c titio n e r s u sing h o s p ita l f a c i l i t i e s and o th e r a sso cia te d o r

re la te d s e rv ic e s , in c lu d in g ch argin g p r a c titio n e r s fo r use o f

h o s p ita l f a c i l i t i e s and re so u rce s, and the e ffe c t o f these m atters

on th e le v e l o f s e rv ic e s p ro v id e d ;

(e) th e e ffe c t o f c u rre n t fin a n c in g methods ( in c lu d in g h e a lth

in s u ra n c e ) on h o s p ita l u t i l i s a t i o n in c lu d in g the p ro v is io n o f

m edical s e rv ic e s in h o s p ita ls ;

( f ) th e r e la tio n s h ip between community based h e a lth and r e la te d

s e rv ic e s and h o s p ita ls ;

(g ) th e v a lu e o f a c c r e d ita tio n o f h o s p ita ls ;

(h ) e x is t in g and p o s s ib le Commonwealth/State arrangem ents fo r m eeting

o p e ra tin g c o s ts o f h o s p ita ls and a s s o c ia te d o r r e la te d s e rv ic e s ; and

( i ) any o th e r m a tte rs o f s ig n if ic a n t im portance to paragraphs (1) to

(4 ) above;

AND, w ith o u t r e s t r i c t i n g th e n a tu re o f your recommendations, you are hereby

d ir e c te d , in making your recommendations, to have regard to th e scope fo r

r a t io n a lis a t io n o f f a c i l i t i e s , s e rv ic e s and resources o f a l l types

( in c lu d in g those p ro vid e d by the Department o f V e te ra ns' A f f a ir s , p riv a te

h o s p ita ls , m ed ica l p r a c titio n e r s and o th e r h e a lth -c a re p r a c titio n e r s ) and to

any b a r r ie r s to th e achievem ent o f such r a t io n a lis a t io n ; AND i t i s hereby

d e c la re d th a t , by v ir t u e o f t h is Commission, you may in th e e x e c u tio n h e re o f

do a l l such a c ts , m a tte rs and th in g s and e x e rc is e a l l such powers as a Royal

Commission o r th e Chairman o r members o f a Royal Commission may la w fu lly do

and e x e rc is e , w hether under o r pursuant to th e Royal Commission A ct, 1968,

o r o th e rw is e ; AND i t is hereby fu r th e r d e c la re d th a t you are a u th o ris e d to

conduct your in q u ir y under t h is Commission in t o th e m atters m entioned in

paragraphs (1 ) to (4) above in com bination w ith any in q u ir y in t o th e same o r

r e la te d m a tte rs th a t you are d ire c te d o r a u th o ris e d to make by any

Commission o r Commissions is s u e d , o r in pursuance o f any o rd e r o r

appointm ent made, elsew here in th e Commonwealth.

GIVEN under my hand and th e P u b lic Seal o f th e s a id S ta te , a t P e rth , t h is

16th day o f A p r il, N ineteen hundred and e ig h ty .

By H is E x c e lle n c y 's Command,

C ha rle s C ourt

Prem ier

GOD SAVE THE QUEEN 1 !!

APPENDIX E - MINISTERIAL STATEMENT - COMMONWEALTH MINISTER FOR HEALTH

E x tra c te d from Hansard - House o f R e p re se nta tives - 24 May 1979

Background

W ith h e a lth c o s ts accou ntin g fo r n e a rly 8 per ce nt o f th e gross dom estic

p ro d u c t, compared w ith le s s than 6 per cent s ix years ago, i t has n o t been

p o s s ib le fo r the Government to ig n o re the s ig n ific a n c e o f those co s ts in

budgetary s tra te g y . Although in the past 3 -1 /2 years the Government has

made r e a l and ta n g ib le progress in reducing m arkedly the ra te o f

a c c e le ra tio n o f in cre a se in the n a tio n 's h e a lth e x p e n d itu re , co sts are s t i l l

fa r to o h ig h . Indeed, th e la t e s t estim a tes o f t o t a l h e a lth e x p e n d itu re show

th a t the ra te o f in cre a se la s t fin a n c ia l year over 1976-77 was down to about

10.7 per c e n t. T his compares w ith an in cre a se o f 14.1 per cent in 1976-77

over th e p re v io u s ye a r, and a massive 33 per ce nt growth the year b efo re

th a t.

But I emphasise again th a t , a ccep tab le and encouraging as th e la t e s t fig u re s

a re , th ey are s t i l l not good enough. No government o f a c o u n try th e s iz e o f

A u s tr a lia r e lis h e s a n a tio n a l h e a lth b i l l o f around $8 b i l l i o n - fo r th a t is

what the n a tio n as a whole is fa c in g in the c u rre n t fin a n c ia l ye ar. Such a

c o st is p a r t ic u la r ly unacceptable a t a tim e when the Government and the

n a tio n are faced w ith a c o n tin u in g s itu a tio n o f economic d i f f i c u l t i e s ,

when - as the T reasurer has p o in te d o ut - the o v e r - r id in g , a ll- im p o r ta n t

ta sk is to come to g rip s w ith th a t s itu a tio n . And so I ask honourable

members to view these changes in th e l i g h t o f the Government's o v e r a ll

budgetary s tra te g y . They are a v i t a l component o f th a t s tra te g y . Put in

another way, the Commonwealth sim p ly cannot a ffo rd to co n tin u e s u b s id is in g

h e a lth co s ts a t the p resent ra te i f the Budget d e f i c i t is to be ke pt a t an

accep tab le le v e l. But - I emphasise t h is s tro n g ly - th e Government is

c e r ta in ly n ot a b d ic a tin g i t s e s s e n tia l r e s p o n s ib ilit ie s . I t w i l l co ntin ue

to g ive emphasis to the im portance o f le s s c o s tly n o n - in s titu t io n a l care.

In a d d itio n , w h ile re d u c in g i t s le v e l o f d ir e c t subsidy tow ards th e c o s t o f

m edical care - except fo r p en sio ne rs and th e disadvantaged - i t is making a

r e a l a tte m p t to c o n tr o l h e a lth e x p e n d itu re in th e most c o s tly o f h e a lth

spheres, h o s p ita l ca re . S u b je ct to the c o -o p e ra tio n o f th e S ta te s in the

achievem ent o f these o b je c tiv e s , th e Government w i l l co n tin u e i t s su pport

fo r le s s c o s tly n o n - in s t it u t io n a l h e a lth care a lte r n a tiv e s and p re v e n ta tiv e

h e a lth program s, in c lu d in g the community h e a lth and school d e n ta l programs

and i t i s la u n c h in g a b o ld ly in n o v a tiv e program aimed a t im p ro vin g th e

g e n e ra l le v e l o f th e n a tio n 's h e a lth . Thus, w h ile we are re d u cin g th e le v e l

o f Government su b sid y to in d iv id u a ls who are a ble to pay fo r m edical c o s ts ,

we a re encouraging and sp onsoring measures which w i l l n ot o n ly c o n ta in

fu tu re c o s t e s c a la tio n b u t a ls o should lead to b e tte r h e a lth sta nd ard s fo r

the people.

In q u iry in to H o s p ita ls

Perhaps the s in g le most im p o rta n t measure announced to n ig h t, a t le a s t in

term s o f p o te n t ia l c o s t sa vin g in th e n o t to o d is ta n t f u tu r e , has been the

Governm ent's p la n to e s ta b lis h a n a tio n a l in q u ir y to examine th e e ffic ie n c y

and a d m in is tr a tio n o f h o s p ita ls th ro u g h o u t A u s tr a lia . I t i s a w e ll known

and d is tu r b in g fa c t th a t some 60 per ce nt o f Commonwealth e x p e n d itu re on

h e a lth s e rv ic e s i s absorbed by h o s p ita l s e rv ic e s . Everyone in v o lv e d in

h e a lth care - and th a t in c lu d e s the S ta te Governments - agrees th a t

h o s p ita ls are d is p ro p o r tio n a te ly c o s tly and th a t something ought to be done

about i t . T h is Government is doing som ething about i t . The p ro po sal to

e s ta b lis h an in q u ir y is a p o s itiv e f i r s t s te p towards e s ta b lis h in g fin a n c ia l

s a n ity in th e h o s p ita l sphere.

A lthough the r a te o f grow th in h o s p ita l c o s ts has been slowed under the

h o s p ita l c o s t-s h a rin g agreements which the F ra se r Government re -n e g o tia te d

w ith th e S ta te s , a c tu a l c o s ts have co n tin u e d to r is e . For example, in

1976-77 - th e f i r s t f u l l year o f o p e ra tio n o f the agreements - the

Commonwealth's c o n tr ib u tio n was $873 m illio n . For th e c u rre n t fin a n c ia l

y e a r, i t is e s tim a te d th a t the Commonwealth's c o n tr ib u tio n w i l l be $1067

m il l i o n , an in c re a s e o f some 22 per cent in th e tw o-year p e rio d . The

purpose o f an in q u ir y would be to id e n t if y th e fa c to rs behind e x is tin g ra te s

o f grow th in p u b lic h o s p ita l e x p e n d itu re s , and ways in which those growth

ra te s m ight be reduced.

Evidence p o in ts to an o versup ply o f h o s p ita l beds in A u s tr a lia , compared

w ith o th e r c o u n trie s . In a d d itio n , th e re is a m a l- d is tr ib u tio n o f beds.

The oversup ply s itu a tio n i s r e fle c te d in the average bed occupancy ra te in

our h o s p ita ls . In A u s tr a lia th e re is an average bed occupancy ra te o f o n ly

68 per c e n t. An in q u ir y would lo o k a t these is su e s. The re ce n t re p o rt o f

the South A u s tra lia n P u b lic Accounts Committee in to the fin a n c ia l management

o f the h o s p ita l system in th a t S ta te produced some d is tu rb in g in fo rm a tio n ,

p a r t ic u la r ly on th e fin a n c ia l a f f a ir s o f some South A u s tra lia n h o s p ita ls .

I t is a m a tte r o f g eneral concern fo r the community th a t i t must get the

b est value p o s s ib le in terms o f h e a lth care fo r each d o lla r spent.

T h e re fo re , th e re is a re a l n e c e s s ity fo r t h is complete review o f the

h o s p ita l system, which w i l l in c lu d e the A u s tra lia n C a p ita l T e r r ito r y . The

Government w i l l be d is c u s s in g the in q u ir y w ith the S ta te s . We w i l l commence

the in q u ir y as soon as p o s s ib le . An e a rly re p o rt to the Government would be

d e s ira b le in view o f the e x p iry o f most o f th e h o s p ita l c o s t-s h a rin g

agreements in m id-1980.

No doubt th e in q u ir y w i l l fin d much u s e fu l in fo rm a tio n in the b o o k le t

e n t it le d 'R e po rt on R a tio n a lis a tio n o f H o s p ita l F a c ilit ie s and S e rv ic e s , and

on Proposed New Charges - A D iscussion P a p e r'. I ta ke t h is o p p o rtu n ity to

ta b le a copy o f th a t r e p o r t. I t has been prepared by a Committee o f

Commonwealth o f f i c i a l s fo llo w in g a s e rie s o f meetings w ith the S tate s to

examine measures to improve h o s p ita l p r o d u c tiv ity , e ffic ie n c y and co st

containm ent. I c ir c u la te d th e d is c u s s io n paper to the S tate and N orthern

T e r r ito r y H ealth M in is te rs on 2 March th is year as a b a sis fo r fu r th e r

d is c u s s io n . I emphasise th a t th e recommendations have not been endorsed by

th e Commonwealth Government b ut the d iscu ssio n paper has been endorsed as

such. D uring the in q u ir y , th e Government would wish th a t i t s c o n trib u tio n

to o p e ra tin g co sts o f p u b lic h o s p ita ls fo r the 1979-80 fin a n c ia l year be

h eld a t the 1978-79 le v e ls . I recognise th a t t h is c o n s tra in t may have

w ide-spread e ffe c ts on some S ta te s ' h o s p ita l systems. E a rly d iscu ssio n

between the Commonwealth and th e S tates w i l l loo k a t th is aspect. The

Commonwealth w i l l be seeking the p a r tic ip a tio n and c o -o p e ra tio n o f the

S tate s to ensure th a t an in q u ir y w i l l be f u l ly su cce ssfu l in making

recommendations to improve the e ffic ie n c y o f the h o s p ita l system.

APPENDIX F - CALL FOR SUBMISSIONS

A d vertise m e nt Placed

An a d v e rtis e m e n t g iv in g th e f u l l Terms o f Reference and c a llin g fo r

su bm issio n s, was placed in newspapers th ro u g h o u t A u s tr a lia in September 1979

Persons, o rg a n is a tio n s o r bodies w is h in g to p lace evidence b e fo re the

Commission a re in v ite d to make d e ta ile d w r itte n subm issions as soon as p o s s ib le b u t n o t l a t e r than 30 November, 1979. The Commission re q u ire s to be a d vised by 19 O ctober, 1979 o f th e in te n tio n o f any person,

o rg a n is a tio n o r body to make a subm ission and, where p ra c tic a b le , o f

th e p a r t ic u la r aspe cts o f th e Terms o f Reference th e subm ission w i l l

c o v e r. Subm issions should c o n ta in a one (1) page summary c o v e rin g the main p o in ts o f the su bm issio n. The Commission requests th a t

subm issions be in th e form o f an a f f i d a v i t and be d u ly sworn. Format

fo r a f f i d a v i t s w i l l be forw arded upon n o tic e o f in te n tio n to su bm it.

Subm issions and e n q u irie s should be addressed to :

The S e c re ta ry

Commission o f In q u iry in t o th e E ffic ie n c y

and A d m in is tra tio n o f H o s p ita ls ,

G.P.O. Box 4284, SYDNEY N.S.W. 2001.

T elephone: (02) 231-1495

Only persons who have lodged a sworn w r itt e n subm ission w i l l be

e n t it le d to be heard a t a h e a rin g . O ral evidence w i l l be heard in

p u b lic and p r iv a te h e a rin g s which the Commission in te n d s to h o ld in a l l

c a p ita l c i t i e s and such o th e r lo c a tio n s as seem d e s ira b le . Dates and

venues f o r th ese h e a rin g s w i l l be a d v e rtis e d from tim e to tim e .

The Commission in te n d s to make p u b lic as much o f the evidence as p o s s ib le . I t does, however, re co g n ise th a t c e r ta in evidence o r

subm issions may need to be tre a te d on a c o n fid e n tia l b a s is . Persons

who fe e l a l l o r any p a r t o f t h e ir evidence o r subm ission should be so

tre a te d sh ou ld n o t if y th e Commission a t the tim e th a t th e evidence or

subm ission i s g iv e n . The Commission rese rve s i t s r ig h t under S e ction

6D o f th e Royal Commissions' A ct 1902 (Commonwealth) to determ ine what p a r t o r p a rts o f evidence o r subm issions should be c la s s ifie d as

c o n f id e n t ia l.

Newspapers in which the A dvertisem ent was Placed New South Wales and A u s tra lia n C a p ita l T e r r it o r y

A lb ury M ail

Arm idale Express

A rm idale New Englander

Barham B ridge

Barraba Gazette

B a r rie r D a ily T ru th , Broken H i l l

B a th u rs t Advocate

Bega D i s t r i c t News

Bega and D i s t r i c t Times

B e llin g e n Sun

Berrim a D i s t r i c t Post

B ig R iv e r Express, G ra fto n

Bingara Advocate

Bombala Times

Boorowa News

Bourke H erald

B re w a rrina News

Brunswick Byron Advocate

Byron News

C am pbelltow n-Ingleburn News

Campbelltown S ta r

Camden A d v e rtis e r

Camden News

Canowindra News

Canberra Times

Cape Hawke Advocate, F o rs te r

C e n tra l Coast Express, Gosford

C e n tra l Western D a ily , Orange

Cessnock A d v e rtis e r

Cessnock Eagle

Champion P ost, Parkes

Cobar Age

C offs Harbour Advocate

Condobolin Lachlander

Cooma Monaro Express

Coonabarabran Times

Coonamble Times

Cootamundra H erald

Corowa Free Press

Cowra Guardian

C ro okw e ll G azette

D a ily T elegraph, Sydney

D e n iliq u in P a s to ra l Times

D o rrig o Gazette

Dubbo L ib e r a l

Dungog C h ro n ic le

East Land O p inion , G o ffs Harbour

Eden Im lay Magnet

E ntrance Guardian

Evening P ost, Goulburn

Forbes Advocate

G ilg a n d ra Weekly

Glen Innes Examiner

G lo u ce ste r Advocate

Gosford S tar

G ra fto n Examiner

G r e n fe ll Record

G r i f f i t h News

Gundagai Independent

Gunnedah Independent - Namoi V a lle y Independent

Guyra Guardian

Harden-Murrumburrah Express

Hawkesbury C o u rie r

Henty Observer

H ills t o n S p e c ta to r

H o lid a y C ity Express, P o rt Macquarie

H unter V a lle y News

Illa w a r r a D a ily Mercury

I n v e r e ll Times

Kiama Independent

Lake News, Lake C a rg e llig o

Leeton I r r i g a t o r

L ithg ow Mercury

Lyndhurst S h ire C h ro n ic le

Macleay Argus, Kempsey

M a itla n d Mercury

M a itla n d P ic t o r ia l

M a n illa Express

Manning R ive r Times, Taree

M id-Coast O bserver, Kempsey

M ilto n Express

M ilto n Times

Moama Free Press

Molong Express

Moruya Examiner

Moruya Southern S ta r

Mudgee Guardian

M urwillum bah D a ily News

Muswellbrook C h ro n ic le

Nambucca Guardian News, M a c k s v ille

N a rra b ri C o u rie r

Narrandera Argus

Narromine News & T rangie Advocate

Newcastle H erald

N orth West Champion, Moree

N orthern D a ily Leader, Tamworth

N orthern S ta r, Lismore

Nowra News Leader

Nowra R e g is te r

Nyngan M a il

Peak H i l l Times

P e n rith Press

P ic to n Post

P o rt Macquarie News

P o rt Stephens P ic to ria l-E x a m in e r

Queanbeyan Age

Q u irin d i Advocate

Richmond R ive r Express-Exam iner, Casino

R iv e rin e G ra z ie r, Hay

St M ary's S ta r, P e n rith

Scone Advocate

Shoalhaven & Nowra News

S in g le to n Argus

South West News P i c t o r ia l , Young

Southern Cross, Junee

Southern H ighland News, Bowral

Southern R iv e rin a News, F in le y

Springwood G azette

Sydney Morning H erald

Tallanganda Times

Temora Independent

T e n te r fie ld S ta r

T ru n dle S tar

Tuggerah Lakes Advocate

Tumbarumba Times

Tumut Times

U ra lla Times

Wagga D a ily A d v e rtis e r

Walcha News

W a ria lda Standard

Wauchope G azette

W e llin g to n Times

West Wyalong Advocate

W estlakes A d v e rtis e r, Boolaroo

W indsor G azette

Wingham C h ro n ic le

Yass Post

Yass T ribune

N o rth e rn T e r r it o r y

The A u s tra lia n

The N orth ern T e r r it o r y News, Darwin

Queensland

A llo r a A d v e rtis e r

A th e rto n Times

The A u s tra lia n

Ayr Advocate

Balonne Beacon

Barcoo Independent

Bowen Independent

B risbane V a lle y Sun

Bundaberg News M a il

The C a irn s Post

C a llid e Dawson News

C e n tra l B u rn e tt Times

C e n tra l Queensland News

C e n tra l T elegraph, B ilo e la

C h in c illa News

The Clerm ont Telegram

The C lif t o n C o u rie r

Cunnamulla Watchman

The Dalby H erald

The Drum, Bundaberg

F a s s ife rn Guardian

Focus News, C airns

Focus T a b le la n d e r, H erberton

Gold Coast B u lle t in , S o uthp ort

Goondiwindi Argus

Gympie Times

H e rb e rt R iv e r Express, Ingham

The Hervey Bay Observer

Home H i l l Observer

I n n i s f a i l Advocate

I s is Recorder

Longreach Leader

Lugan - A lb e rt Times

Mackay D a ily Mercury

Maryborough C h ro n ic le

Monto H erald

M u r illa A d v e rtis e r

Nambour C h ro n ic le

The Near N orth Coast News, C aboolture

N orth Queensland R e g is te r, T o w n s v ille

The N orth West S ta r, Mount Isa

N o rth e rn M in e r, C h a rte rs Towers

Noosa News

The O bserver, G ladstone

P ia lb a Bay Leader P ic t o r ia l

Pine & P e n in su la Record, S tra th p in e

P itts w o r th S e n tin e l

P ro se rp in e Guardian

Queensland Times, Ipsw ich

R e d c liffe H erald

Redland Times

Rockhampton B u lle t in

The Roma Leader

South B e rn e tt Times

S tan tho rpe Border Post

Sunshine Coast A d v e rtis e r, Maroochydore

T ablelands A d v e r tis e r, Mareeba

Toowoomba C h ro n ic le

T o w n s v ille D a ily B u lle tin

Warwick D a ily News

Western S ta r, Roma

Western Times

Wynnum Redlands H erald

South A u s tr a lia

A d ela ide A d v e rtis e r

The A u s tra lia n

Barossa and L ig h t H e ra ld , Tanunda

Border C h ro n ic le , Bordertown

Border Times, Pinnaroo

Border Watch, Mount Gambier

B unyip, Gawler

Eudunda C o u rie r

Eyre P e nin sula T ribune

F lin d e rs News, P o rt P ir ie

The Is la n d e r, K ingscote

Leader, Angaston

Loxton News

Mount B arker C o u rie r

Murray P io n e e r, Renmark

Murray V a lle y S tandard, Murray B ridge

N aracoorte H erald

N orthern Argus, C lare

Pennant, Penola

P o rt L in c o ln Times

P o rt P ir ie Recorder

P roducer, B a lakla va

Review Times Record, Jamestown

R iv e r News, W aikerie

South East Leader, K ingston

South Eastern Times, M illic e n t

Southern Argus, S tra th a lb y n

Spencer G u lf P i c t o r i a l , Whyalla

T ra n s c o n tin e n ta l, P o rt Augusta

V ic to r Harbour Times

West Coast S e n tin e l, S treaky Bay

York P eninsula C ountry Times, Kadina

Tasmania

The A u s tra lia n

B urnie Advocate

Derwent V a lle y Gazette

Hobart Mercury

Huon News

King Is la n d News

Launceston Examiner

S c o tts d a le A d v e rtis e r

V ic to r ia

A le x a n d ria Standard

A ra ra t A d v e rtis e r

The A u s tra lia n

Bacchus Marsh Express

B a irn sd a le A d v e rtis e r

B a lla r a t C o u rie r

B a lla r a t News

B a lla r a t P o ta to Growers News

B e a u fo rt Advocate

B e a u fo rt R ip o n s h ire News

Beechworth Ovens and Murray A d v e rtis e r

B e n a lla Ensign

Bendigo A d v e rtis e r

B o ort Standard

B rig h t Observer

Bunyip G a rfie ld Express

Camperdown C h ro n ic le

C a s te rto n News A d v e rtis e r

C astlem aine M a il

The C h a rlto n T rib un e

Cobden Times

Cobram C o u rie r

Cohuna Farmers Weekly

Colac H erald

Corryong C o u rie r

Cranbourne Sun

C resw ick A d v e rtis e r

D a y le s fo rd Advocate

Dimboola Banner

Donald B ir c h ip Times

D rouin G ippsland Independent

East G ippsland News

Echuca H erald

Edenhope Kowree Advocate

Euroa G azette

F oster M irro r

Geelong A d v e rtis e r

Gisborne & Macedon Telegraph

Golden C ity G a zette, Bendigo

H am ilton S p e cta to r

H astin gs Sun

H eathcote M clvor Times

Hopetoun C o u rie r

Horsham M a il Times

J e p a rit Leader

Kaniva Times

Kerang N orthern Times

K ilm ore Free Press

Kooweerup Sun

K o r o it S e n tin e l

Kyabram Free Press

Kyneton Guardian

Kyneton Telegraph

Latrobe V a lle y Express

Leongatha S ta r

L ily d a le Express

M a ffra S p ectato r

M a n s fie ld C o u rie r

Maryborough A d v e rtis e r

Melbourne Age

M elton Express

M ild u ra Sunraysia D a ily

Mirboo N orth Times

Mooroopna M idland Times

M ornington Post

M ortlake D ispatch

M y rtle fo rd Times

N h ill Free Press

Numurkah Leader

Orbost M ail

Ouyen Express

Pakenham Gazette

Penshurst Free Press

P o rt F a iry G azette

P o rtla n d Observer

Rainbow News

R obinvale S e n tin e l

Rochester Campaspe V a lle y News

R utherglen Sun

S a in t Arnaud Mercury

Sale G ippsland Times

Sea Lake Tim es-Ensign

Seymour Telegraph

Shepparton News

S k ip to n Western P la in s A d v e rtis e r

S m ithton C h ro n ic le

South G ippsland S e n tin e l-T im e s

South P e n sin u la G a zette, Rosebud

S ta w e ll Times News

Sun News P ic t o r ia l

Sunbury Sun

Swan H i l l Guardian

T ra ra lg o n J o u rn a l

Terang Express

T ra fa lg a r News

W angaratta C h ro n ic le Despatch

W arracknabeal H erald

W arragul G azette

Warrnambool Standard

Wedderburn Express

W erribee Banner

W esternport News

W h ittle s e a Post

Wodonga A lb ury Express

Woodend Telegraph

Yarram Standard-News

Yarrawonga C h ro n ic le

Yea C h ro n ic le

Western A u s tr a lia

Albany A d v e rtis e r

The A u s tra lia n

The B e verley York Express

Brookton Leader

B u sselto n M argaret R ive r Times

C oastal D i s t r i c t Times, Mandurah

C o llie M a il

Esperance Express

G e ra ldto n Guardian

Gnowangerup S ta r

G reat Southern H e ra ld , Katanning

K a lg o o rlie M iner

N arro g in Observer

South Western Tim es, Bunbury

Swan Express, M idland

Wagin Argus

Warren Blackwood Times, Manjimup

The West A u s tra lia n

APPENDIX G - ORGANISATIONS OR PERSONS FROM WHOM SUBMISSION RECEIVED

AS AT 20 JUNE 1980

Community H o s p ita ls A s s o c ia tio n , V ic to r ia

A u s tra lia n C o u n c il on H o s p ita l Standards

The H o s p ita ls ' A s s o c ia tio n o f New South Wales

South A u s tr a lia n H o s p ita ls A ssocation

N a tio n a l C o u n c il o f H o s p ita ls

The V ic to r ia H o s p ita ls ' A s s o c ia tio n L im ite d

A u s tra lia n C a th o lic H e a lth Care A s s o c ia tio n

The A u s tra lia n H o s p ita ls A s s o c ia tio n

The A u s tra lia n H o s p ita ls A s s o c ia tio n , Western A u s tr a lia S ta te Branch

The P r iv a te G e r ia tr ic H o s p ita ls A s s o c ia tio n o f V ic to r ia

N a tio n a l Standing Committee o f P riv a te H o s p ita ls

Forbes Jemalong Aged P e o p le 's A s s o c ia tio n

A u s tr a lia n A s s o c ia tio n o f Surgeons

The Royal A u s tra la s ia n C olleg e o f P h ysicia n s

The Royal C olleg e o f P a th o lo g is ts o f A u s tr a lia

The Royal C olleg e o f P a th o lo g is ts o f A u s tr a lia (N.S.W. S ta te Committee)

The Royal C olleg e o f P a th o lo g is ts o f A u s tr a lia ( V ic to r ia S ta te Committee)

S o c ie ty o f P a th o lo g is ts in P riv a te P ra c tic e

Royal A u s tra la s ia n C olleg e o f R a d io lo g is ts

N a tio n a l A s s o c ia tio n o f M edical S p e c ia lis ts

A u s tr a lia n C o lle g e o f P a e d ia tric s

A u s tra lia n P s y c h o lo g ic a l S o c ie ty

The Royal A u s tra lia n C olleg e o f General P r a c titio n e r s

The Royal A u s tra lia n C olleg e o f M edical A d m in is tra to rs

M edical S u p e rin te n d e n ts ' A s s o c ia tio n o f New South Wales and A.C .T.

A u s tra lia n M edical A s s o c ia tio n

A u s tra lia n M edical A s s o c ia tio n (New South Wales Branch)

A u s tr a lia n A s s o c ia tio n o f P h y s ic a l and R e h a b ilita tio n M edicine

A u s tr a lia n C o u n c il o f S a la rie d M edical O ff ic e r O rga n isa tio n s

Department o f V e te ra n s' A f f a ir s R e p a tria tio n General H o s p ita ls - S p e c ia lis ts

A d visory Committee, South A u s tr a lia

Frem antle H o s p ita l C lin ic a l A s s o c ia tio n , Western A u s tra lia

Chairmen o f the M edical S ta ffs o f Sydney Teaching H o s p ita ls , New South Wales

D octors Reform S o c ie ty , V ic to r ia

V ic to r ia n G e r ia tr ic s M edical O ffic e r s A s s o c ia tio n

Dandenong X-Ray C entre, V ic to r ia

V ic to r ia n C yto lo gy (G y n a e c o lo g ic a l) S e rvice

I n s t it u t e o f M edical and V e te rin a ry Science, South A u s tra lia

A s s o c ia tio n o f M edical S u pe rintendents o f V ic to r ia n H o s p ita ls

A u s tra lia n G e ria tr ic s S o c ie ty

L ia is o n P s y c h ia try S e c tio n , Royal P ric e A lfre d H o s p ita l, Sydney

S e nio r M edical S t a ff , S t V in ce n ts H o s p ita l, V ic to r ia

Royal A u s tra lia n N ursing F e d e ra tio n

A u s tra lia n C o u n cil o f Community Nursing

The A s s o c ia tio n o f D ire c to rs o f N ursing, V ic to r ia

The I n s t it u t e o f N ursing A d m in is tra to rs o f New South Wales and A.C.T.

D i s t r i c t H o s p ita l Glen Innes - N ursing S t a ff , New South Wales

The Tasmanian H o s p ita l M atrons' A s s o c ia tio n

A u s tra lia n V is it in g Nurses A s s o c ia tio n

A u s tra lia n A s s o c ia tio n o f O ccupational T h e ra p is ts

New South Wales A s s o c ia tio n o f O ccupational T h e ra p ists

V ic to r ia n A s s o c ia tio n o f O ccupational T h e ra p is ts

A u s tra lia n A s s o c ia tio n o f S o c ia l Workers - V ic to r ia n S ta te Branch

West Gippsland S o c ia l W orkers' Group, V ic to r ia

S o c ie ty o f H o s p ita l Pharm acists o f A u s tra lia

S o c ie ty o f H o s p ita l Pharm acists o f A u s tra lia (W.A. Branch Committee)

Pharmacy G u ild o f A u s tr a lia

V ic to r ia n Ambulance S e rvice s A s s o c ia tio n

V ic to r ia n Ambulance S u p e rin te n d e n ts ' C ouncil

A u s tra la s ia n C ollege o f P h y s ic a l S c ie n tis ts in M edicine

A u s tra lia n Drug and M edical In fo rm a tio n Group

Para D o m ic ilia ry Care S e rv ic e , South A u s tra lia

P harm aceutical A s s o c ia tio n o f A u s tra lia

V ic to r ia n M edical Records A s s o c ia tio n

A u s tra lia n A s s o c ia tio n o f D ie titia n s

A u s tra lia n O p to m e trica l A s s o c ia tio n

A u s tra lia n C ouncil fo r R e h a b ilita tio n fo r D isabled

A u s tra lia n C o lle g e o f H e a lth S e rvice A d m in is tra to rs

A u s tra lia n C o lle g e o f H ea lth S e rv ic e A d m in is tra to rs - N.S.W. S ta te Branch

A s s o c ia tio n o f C leaning C o n tra c to rs o f A u s tr a lia

The H o s p ita l A d m in is tra tiv e O ff ic e r s ' A s s o c ia tio n o f V ic to r ia

Melbourne H o s p ita ls B io m edical E ngin ee rin g A d visory Group

N a tio n a l A s s o c ia tio n o f T e s tin g A u th o r itie s

The I n s t i t u t e o f In te r n a l A u d ito rs , Melbourne C h a rte r

The H o s p ita l Employees' F e d e ra tio n o f A u s tr a lia

The H o s p ita l Employees' F e d e ra tio n o f A u s tr a lia - Tasmanian Branch N o .l

The H e a lth and Research Employees' A s s o c ia tio n o f A u s tr a lia - Branch O ffic e

P u b lic M edical O ffic e r s A s s o c ia tio n o f New South Wales

H e a lth Care Consumers A s s o c ia tio n o f th e A.C.T.

C itiz e n s ' Commission on Human R ig h ts , V ic to r ia

A s s o c ia tio n o f R e la tiv e s and F rie n d s o f th e M e n ta lly 111 (ARAFMI),

New South Wales

A s s o c ia tio n fo r th e W e lfa re o f C h ild re n in H o s p ita l

Bonalbo & D i s t r i c t Development A s s o c ia tio n , New South Wales

Nimbin H ea lth & W elfare C o u n c il, New South Wales

Community H e a lth Working Group, New South Wales

U n iv e rs ity o f M elbourne - F a c u lty o f D ental Science

The U n iv e rs ity o f New South Wales - School o f H ea lth A d m in is tra tio n

The A u s tra lia n P ostg ra du a te F e d e ra tio n in M edicine

V ic to r ia n M edical P ostgraduate Foundation

N a tio n a l Research I n s t i t u t e o f G erontology and G e r ia tr ic M edicine,

U n iv e rs ity o f Melbourne

The V ic to r ia n Academy fo r General P ra c tic e L im ite d

Baker M edical Research I n s t i t u t e , V ic to r ia

The A s s o c ia tio n o f U n iv e rs ity C lin ic a l P ro fe s s o rs o f A u s tr a lia

Foundation fo r A u s tra lia n Resources, New South Wales

Royal Alexandra H o s p ita l fo r C h ild re n , Camperdown, New South Wales

The Royal Newcastle H o s p ita l, New South Wales

Sydney H o s p ita l, New South Wales

Camden D i s t r i c t H o s p ita l, New South Wales

G osford D i s t r i c t H o s p ita l, New South Wales

The Dubbo Base H o s p ita l, New South Wales

The S u th erlan d H o s p ita l, C aringbah, New South Wales

St V in c e n ts H o s p ita l, New South Wales

The Casino & D i s t r i c t Mem orial H o s p ita l, New South Wales

Mater M is e ric o rd ia e H o s p ita l, New South Wales

The Parram atta Hospitals/W estm ead C entre, New South Wales

Royal P rin c e A lfre d H o s p ita l, New South Wales

Benevolent S o c ie ty o f New South Wales (Royal H o s p ita l fo r Women)

A lb ury Base H o s p ita l, New South Wales

K u r ri K u r r i H o s p ita l, New South Wales

Walcha D i s t r i c t H o s p ita l, New South Wales

Cessnock H o s p ita l, New South Wales

The P rin c e Henry, The P rin c e o f Wales and Eastern Suburbs H o s p ita ls ,

New South Wales

M uswellbrook D i s t r i c t H o s p ita l, New South Wales

Hornsby & K u -rin g -g a i H o s p ita l, New South Wales

The Royal Ryde Homes, Royal Ryde H o s p ita l, New South Wales

Mullumbimby & D i s t r i c t War M em orial H o s p ita l, New South Wales

Bangalow D i s t r i c t War Mem orial H o s p ita l, New South Wales

Byron D i s t r i c t H o s p ita l, New South Wales

The Sydney Home N ursing S e rv ic e , New South Wales

Lewisham H o s p ita l, New South Wales, New South Wales

Western General H o s p ita l, New South Wales

The Royal Women's H o s p ita l, New South Wales

Queen V ic to r ia M edical C en tre, V ic to r ia

The Royal Melbourne H o s p ita l

St V in ce n ts H o s p ita l, V ic to r ia

Royal V ic to r ia n Eye and Ear H o s p ita l

Bendigo Home and H o s p ita l fo r the Aged, V ic to r ia

St George's H o s p ita l, V ic to r ia

Frankston Community H o s p ita l, V ic to r ia

B a lla r a t Base H o s p ita l, V ic to r ia

Y o o ra lla S o c ie ty o f V ic to r ia

C a u lfie ld H o s p ita l, V ic to r ia

The Geelong H o s p ita l, V ic to r ia

P rin ce H en ry's H o s p ita l, V ic to r ia

Sandringham & D i s t r i c t Memorial H o s p ita l, V ic to r ia

A u s tin H o s p ita l, V ic to r ia

A lfre d H o s p ita l, V ic to r ia

H am ilton Base H o s p ita l, V ic to r ia

The Bendigo and N orthern D i s t r i c t Base H o s p ita l, V ic to r ia

Yea and D i s t r i c t Memorial H o s p ita l, V ic to r ia

Bundoora G e r ia tr ic Complex, V ic to r ia

A fte r Care H o s p ita l, V ic to r ia

M anvantara, E astern Suburbs G e r ia tr ic Centre S o c ie ty , V ic to r ia

The Royal D en ta l H o s p ita l o f M elbourne, V ic to r ia

Bethlehem P u b lic H o s p ita l, V ic to r ia

Wimmera Base H o s p ita l, V ic to r ia

Royal T a lb o t - General R e h a b ilita tio n H o s p ita l, V ic to r ia

Royal C h ild r e n 's H o s p ita l, V ic to r ia

Royal A d ela ide H o s p ita l, South A u s tr a lia

Cummins and D i s t r i c t Memorial H o s p ita l I n c . , South A u s tr a lia

Queen E liz a b e th H o s p ita l, W o o d v ille , South A u s tr a lia

Blackwood and D i s t r i c t Community H o s p ita l I n c . , South A u s tr a lia

Queen V ic to r ia H o s p ita l, South A u s tr a lia

B e a c o n s fie ld D i s t r i c t H o s p ita l, Tasmania

Toosey Memorial H o s p ita l, Tasmania

Launceston General H o s p ita l, Tasmania

Royal H obart H o s p ita l, Tasmania

U lv e rs to n e D i s t r i c t H o s p ita l, Tasmania

New N o rfo lk P u b lic H o s p ita l, Tasmania

S c o tts d a le P u b lic H o s p ita l Board, Tasmania

Royal P e rth ( R e h a b ilita tio n ) H o s p ita l, Western A u s tr a lia

Royal Canberra H o s p ita l, A.C.T.

C lin ic a l E pidem iology E v a lu a tio n U n it, Royal North Shore H o s p ita l, N.S.W.

St Lukes H o s p ita l, New South Wales

Home Care N ursing S e rv ic e , V ic to r ia

Mt Carmel H o s p ita l P ty . L im ite d , New South Wales

Western Region H e a lth Centre L im ite d , F o o ts c ra y , V ic to r ia

Kensington Community H ea lth C en tre, V ic to r ia

H e id e lb e rg Community H ealth and W elfare C entre, West H e id e lb e rg , V ic to r ia

Maloondah S o c ia l H ealth C entre, Ringwood E ast, V ic to r ia

C e n tra l A u s tra lia n A b o rig in a l Congress I n c . , N orthern T e r r ito r y

E p ile p s y Foundation o f V ic to r ia

Commonwealth Department o f H e a lth , Canberra

Department o f V e te ra n s ' A f f a ir s , Canberra

Department o f Housing and C o n s tru c tio n , Canberra

N a tio n a l L ib ra r y o f A u s tr a lia , Canberra

N a tio n l A d viso ry C o u n cil fo r the Handicapped

C a p ita l T e r r it o r y H ea lth Commission

Commonwealth Department o f H ea lth

New South Wales H ealth Commission

New South Wales H ealth Commission, N orth Coast Region

Department o f H ealth S e rv ic e s , Tasmania

Department o f H ea lth S e rv ic e s , Tasmania - C h ild H ealth S ervices

Department o f H ealth and M edical S e rvice s, Western A u s tra lia

Department o f H e a lth , N orth ern T e r r ito r y

Nurses Education Board o f New South Wales

South A u s tra lia n H ealth Commission

H o s p ita ls Computer S e rv ic e , V ic to r ia

Community S e rvice s fo r th e I n t e lle c t u a lly Handicapped, New South Wales

H ealth Commission o f V ic to r ia

M ental H ealth S e rvice s Commission, Tasmania

Douglas Everingham M .H.R., Queensland

A u s tra lia n P harm aceutical M anufacturers A s s o c ia tio n

Douglas Bean P ty . L im ite d

Travenol L a b o ra to rie s P ty . L im ite d , New South Wales

A u s tra lia n I n s t it u t e o f Launderers and Linen S u p p lie rs

I n s t it u t e o f Launderers and Linen S u p p lie rs , New South Wales

T e x tile Care and R ental A s s o c ia tio n o f V ic to r ia

T e x tile Care and R ental A s s o c ia tio n o f Tasmania

Tracey Brunstrom & Hammond P ty . L im ite d

Community Systems Foundation

K irto n & W h itin g P la nn ing and Development C o n s u lta n ts , V ic to r ia

A rth u r Andersen & C o., V ic to r ia

V o lu n ta ry H ealth Insurance A s s o c ia tio n o f A u s tr a lia

H o s p ita ls C o n trib u tio n Fund o f A u s tra lia

Medibank

Mr C.R. P r a tt, G r i f f i n P r a tt & C o ., P e rth , Western A u s tra lia

B everley Raphael, U n iv e rs ity o f Newcastle, New South Wales

P ro fe sso r S.M.L. Nade, Queen E liz a b e th I I M edical C entre, Western A u s tra lia

Dr A.E. P olack, D ire c to r , School o f Pharmacy, The U n iv e rs ity o f Tasmania

P ro fe s s o r J . B a rrie M orley, Dean o f C lin ic a l S chool, Monash U n iv e rs ity

V ic to r ia

P ro fe s s o r L .F . O p it, Monash U n iv e rs ity , V ic to r ia

Mr P e te r Ableson, Macquarie U n iv e rs ity , New South Wales

P ro fe sso r J.D . M a rtin , P ro fe s s o r o f O b s te tric s and Gynaecology, U n iv e rs ity o f

Western A u s tr a lia

P ro fe s s o r R .J . Walsh, Dean, F a c u lty o f M ed icin e , U n iv e rs ity o f N.S.W.

P ro fe s s o rs P itn e y & M itc h e ll (U n iv e r s ity o f N .S.W .) , St George H o s p ita l

P ro fe s s o r T. Morgan, P ro fe s s o r o f M edicine, Royal Newcastle H o s p ita l,

New South Wales

P ro fe s s o r M .S.T. Hobbs and Mr P. Schapper, U n iv e rs ity o f Western A u s tr a lia

P ro fe s s o r John B e veridg e, P rin c e o f Wales C h ild re n 's H o s p ita l, New South Wales

Dr P.M. T a tc h e ll, A u s tra lia n N a tio n a l U n iv e r s ity , H ealth Research P r o je c t, ACT

P ro fe s s o r G.C. S c h o fie ld , Dean, F a c u lty o f M ed icin e, Monash U n iv e rs ity ,

V ic to r ia

Dr M.A. Neaverson, S t r a t h f ie ld , New South Wales

Dr S. G i l l i s , Cammeray, New South Wales

Dr C.G. M acFarlane, B a irn s d a le , V ic to r ia

P ro fe s s o r R.R. Andrew, D ire c to r o f M edical E d uca tio n, St Frances X a vier

C a b rin i H o s p ita l, M elbourne, V ic to r ia

Dr V in c e n t Youngman, Belm ont, Queensland

Dr C .R .T. Hughes, N orth A d e la id e , South A u s tr a lia

Dr J .A . K ir k la n d , W o o d v ille , South A u s tr a lia

Dr N. S crim geour, Bedford Park, Western A u s tr a lia

Dr A.D. Ro d s , D ire c to r o f P u b lic H e a lth , Tasmania

Dr P.D. Hughes, D eakin, A u s tra lia n C a p ita l T e r r it o r y

Dr D .S.C . Brown, Mt Gambier, South A u s tr a lia

Dr E.H. Morgan, W o lls to n e c ra ft, New South Wales

Dr Donald McDonald, N ew castle, New South Wales

Dr W. Woods and Dr D.P. Ewing, Wahroonga, New South Wales

E lva R edington, Gulargambone, New South Wales

L .E . C raw ford, Mosman, New South Wales

Rev. E. H ockley, G oulburn, New South Wales

Mr L.M. Kenney, B a llin a , New South Wales

Ms A. Brennan, N orth A lb u ry , New South Wales

Mr B.C. Hann, C a u lfie ld , V ic to r ia

Mr R. Jones, K a rrin y u p , Western A u s tr a lia

S h irle y J. Quinn, South A u s tr a lia

Mr J . D olan, Downer, A u s tra lia n C a p ita l T e r r it o r y

Mr T. Kennedy, Warwick, Western A u s tr a lia

Mr A.S. McKenzie, Coonamble, New South Wales

Mr D.O. Smith and Mr D. M o rris , Dubbo, New South Wales

Mary E l l , Head o f M edical Record School, L in c o ln I n s t it u t e o f H ealth S e rvice s,

V ic to r ia

Dr I.A .G . Brand, E xe cutive D ir e c to r , Preston and N orthcote Community H o s p ita l

V ic to r ia

Dr J.G . G olledge, M edical S u p e rin te n d e n t, P rince ss Alexandra H o s p ita l,

B ris b a n e , Queensland

Mr G.P. G a r r ity , C h ie f E xe cu tive O ffic e r , C alvary H o s p ita l, A.C.T.

Dr N.A. E lv in , General S u p e rin te n d e n t, Woden V a lle y H o s p ita l, A.C.T.

Dr K. Jaumees, M edical S u p e rin te n d e n t, T o w n s v ille General H o s p ita l, Queenslanc

Dr T .J . Wood and P ro fe s s o r S ir Edward Hughes, M elbourne, V ic to r ia

Graham V. W atts, Food S e rvice s Manager, V ic to r ia

APPENDIX Î - COMMISSION SURVEY

The Com m ission's survey o f a sample o f p u b lic h o s p ita ls is b r i e f ly described

below .

Method

The survey covered f in a n c ia l, s t a f f in g and perform ance aspects o f h o s p ita ls

reco gn ised by th e Commonwealth Government fo r C o st-S h a rin g , and was

undertaken in A p ril-M a y 1980. The t o t a l number o f such h o s p ita ls was

d e riv e d from th e la t e s t a v a ila b le Commonwealth Department o f H e a lth l i s t s o f

reco gn ised p u b lic h o s p ita ls , e x c lu d in g a l l s p e c ia lis t a nd /or non-acute

h o s p ita ls , a l l h o s p ita ls w ith fiv e o r le s s beds, and a l l h o s p ita ls known to

have opened l a t e r than 1968-69.

The 636 h o s p ita ls id e n t if ie d by t h is procedure were c la s s ifie d by both S tate

o r T e r r it o r y and approved bed c a p a c ity , as shown in Table H . l. A s t r a t if ie d

random sample was drawn from t h is w ith in c la s s if ic a t io n , e n s u rin g a coverage

o f a l l types o f h o s p ita ls in a l l S tate s and T e r r it o r ie s .

Table H .l P o p u la tio n f o r Survey o f H o s p ita ls (a)

S t a te /T e r r ito r y

Number o f Beds

T o ta l 6-50 51-200 201-500 More than 500

New South Wales 82 85 26 7 200

V ic to r ia 78 40 13 5 136

Queensland 70 29 11 4 114

South A u s tr a lia 46 16 4 2 68

Western A u s tr a lia 64 21 5 2 92

Tasmania 13 4 3 1 21

T e r r it o r ie s 1 1 2 1 5

TOTAL 354 196 64 22 636

N ote: (a ) Cost shared, p u b lic , g e n e ra l, acute care h o s p ita ls opened 1967-68

o r e a r lie r , by bed c a p a c ity and S ta te /T e r r ito r y

Three h o s p ita ls were chosen a t random fo r each S ta te from the 6 -5 0 , 51-200

and 201-500 bed c a p a c ity c a te g o rie s . A fu r th e r h o s p ita l was randomly

s e le c te d fo r each S ta te from th e more than 500 bed c a p a c ity c a te g o ry . Five

h o s p ita ls in th e two T e r r it o r ie s were in c lu d e d in the sample. This

pro vid e d a sample o f 65 h o s p ita ls , c o n ta in in g 13 060 beds.

The survey was designed p r im a r ily as a t r i a l to gauge the a v a i l a b il i t y and

c o m p a ra b ility o f h o s p ita l e xp e n d itu re and performance data th ro ug h ou t

A u s tr a lia and the subsequent f e a s i b il i t y o f a comprehensive n a tio n a l

su rve y. I t is NOT a random ly s e le c te d sample o f a l l A u s tra lia n h o s p ita ls

and care should be taken to in t e r p r e t the r e s u lts a c c o rd in g ly . An added

c a u tio n i s th a t th e sample i s to o sm a ll to be re p re s e n ta tiv e even o f acute

c a re , recognised p u b lic h o s p ita ls .

A q u e s tio n n a ire was designed to c o lle c t b a s ic in fo rm a tio n on h o s p ita l

perform ance, s t a f f in g , r e c e ip ts and payments fo r both 1968-69 and 1978-79.

These were m ailed to each h o s p ita l on 27 March 1980. S ix ty completed

q u e s tio n n a ire s had been re tu rn e d by 9 May 1980. ( A fte r checking the

re tu rn s , two h o s p ita ls were excluded from th e a n a ly s is : one because i t was

n o t open in 1968, the o th e r because in fo rm a tio n was p rovided fo r a group o f

h o s p ita ls w ith o u t is o la t in g th e in s t it u t i o n s e le c te d fo r the survey . On

the o th e r hand, in fo rm a tio n from one o b s te tr ic and one p a e d ia tric h o s p ita l

was re ta in e d fo r a n a ly s is .) The Commission analysed in fo rm a tio n fo r about

9 per ce n t o f A u s tr a lia 's Cost-Shared p u b lic , g e n e ra l, a c u te -c a re h o s p ita ls ,

and about 19 per c e n t o f th e beds in such i n s t it u t io n s .

Overview o f Survey

The survey reve ale d some in te r e s tin g in fo rm a tio n and supported im pressions

gained d u rin g h o s p ita l v i s i t s . Since the sample used is c le a r ly an

inadequate b a s is fo r p re c is e statem ents about e xp e n d itu re and performance

tre n d s in d if f e r e n t groups o f h o s p ita ls in A u s tr a lia , the r e s u lts presented

should be in te r p r e te d as in d ic a tiv e , ra th e r than c o n c lu s iv e .

The q u e s tio n n a ire was designed to c o lle c t what was considered to be

reasonably b a s ic in fo rm a tio n on fin a n c e s , s t a f f in g and perform ance.

However, th e standard o f in fo rm a tio n p rovided by a number o f h o s p ita ls was

g e n e ra lly d is a p p o in tin g , even a llo w in g fo r tim e c o n s tra in ts . The ir r e g u la r

a v a i l a b il i t y o f 1968-69 data is perhaps understandable b ut the

incom pleteness o f the data fo r 1978-79 is a m a tte r fo r some concern.

General Trends

Some tre n d s have emerged from th e Commissions survey work, d e s p ite the

lim it a t io n s . D iffe re n c e s between the fo u r groups o f h o s p ita ls in term s o f

bed numbers, s e rv ic e s p ro vid e d and s t a f f are r e fle c te d in the survey

r e s u lt s . W ith in c re a s in g h o s p ita l s iz e , s t a f f to p a tie n t r a t io s rose and

the change in th e r a tio s over th e te n year p e rio d was g re a te r. I t would

appear th a t th e r is in g s t a f f to p a tie n t r a t io s , both over tim e and w ith

h o s p ita l s iz e , r e f l e c t th e im pact o f te c h n o lo g y . (The term te c h n o lo g y , is

used in the broad sense o f n o t o n ly equipment b u t th e range o f a sso cia te d

s t a f f and s e rv ic e s th a t have produced an in c re a s in g in t e n s it y o f h o s p ita l

tr e a tm e n t.) A lthough te ch n o lo g y has had more e ffe c t in the la r g e r

h o s p ita ls , i t seems th a t i t s im pact e v e n tu a lly d iffu s e s from th e la r g e r to

th e s m a lle r h o s p ita ls . I t is n o t c le a r w hether t h is process w i l l e v e n tu a lly

encompass a l l h o s p ita ls o r w hether th e re is a m inim al s iz e (perhaps

h o s p ita ls in th e 51-200 bed group) a t which te c h n o lo g ic a l development can be

accommodated.

The p ro p o rtio n o f p r iv a t e ly in s u re d p a tie n ts was ve ry h igh fo r some o f these

p u b lic h o s p ita ls . In th e 6-50 bed h o s p ita ls , the p ro p o rtio n o f p riv a te

p a tie n ts ranged from 0 per c e n t to 84 per c e n t. For th e 51-200 bed

h o s p ita ls , th e v a r ia t io n was from 2 per c e n t to 71 per c e n t, f o r the 201-500

bed group from 1 per c e n t to 78 per ce nt and fo r th e more than 500 bed

h o s p ita ls i t was between 5 per c e n t and 72 per c e n t. As e xpected, th e low

p ro p o rtio n s r e fe r re d to h o s p ita ls in e ith e r Queensland o r Tasmania, where

th e p ro v is io n o f h o s p ita l f a c i l i t i e s to p r iv a te p a tie n ts in p u b lic h o s p ita ls

d if f e r s from th a t in th e o th e r S ta te s .

The le v e l o f h o s p ita l payments to V is it in g M edical O ffic e r s (V .M .O .'s ) was

n o ta b le fo r many o f th e h o s p ita ls surveyed. In 1978-79, t o t a l payments to

V .M .O .'s in A u s tr a lia amounted to over $85.7 m illio n , re p re s e n tin g

3 .2 per ce n t o f t o t a l c u rre n t e x p e n d itu re by p u b lic h o s p ita ls . Table H.2

g iv e s the p ro p o rtio n o f V.M.O. payments to the t o t a l s a la rie s and wages b i l l

f o r th e fo u r groups o f h o s p ita ls .

Many o f these v a r ia tio n s in h o s p ita l e x p e n d itu re and perform ance may be

e x p la in e d by ta k in g in t o c o n s id e ra tio n such v a ria b le s as ca se-m ix, not

covered in t h is s u rve y. However, a m a tte r which causes concern both fo r the

work o f th e Commission and fo r any fu tu re s tu d ie s o f A u s tr a lia 's h o s p ita l

and h e a lth care system i s the absence o r n o n -c o m p a ra b ility o f b a s ic

management in fo rm a tio n . T h is ra is e s im p o rta n t q ue stion s about what data

should be a v a ila b le on a n a tio n a l b a s is , who should be c o lle c tin g i t and how

i t c o u ld be used most e f f e c t iv e ly .

Table H.2 Payments to V .M .O .'s and T o ta l S a la rie s and Wages, 1978-79

V.M.O. Payments T o ta l S a la rie s

V.M.O. Payments to T o ta l S a la rie s

$ $ %

6-50 beds 334 497 5 952 335 5.6

51-200 beds 1 901 292 28 908 683 6.6

201-500 beds 5 530 089 222 995 090 2.5

501+ beds 6 196 965 184 047 973 3.4

TOTAL 13 962 843 441 904 081 3.1

As w e ll as producing some u s e fu l m a te ria l, the survey has a lso ra is e d a

number o f questions', such as:

. W ill th e re be a slo w in g down in th e ra te o f growth o f te a ch in g

h o s p ita ls o r w i l l th e y co n tin u e to consume an in c re a s in g p ro p o rtio n

o f the t o t a l h e a lth b i l l ?

. Is th e community re c e iv in g value fo r money from sm all h o s p ita ls o r

co uld more e f f i c i e n t use be made o f the resources in v o lve d ?

. What should be done about h o s p ita ls where th e re has been a

s ig n if ic a n t re d u c tio n in a c t iv it y over a p e rio d such as the la s t

te n years? and

. Who should m o n ito r th e performance o f h o s p ita ls to ensure the

g re a te s t e ffic ie n c y c o n s is te n t w ith the h ig h e s t q u a lity care?

These are among the many q u e stio n s towards which the Commission's fu tu re

work and F in a l Report w i l l be d ire c te d .

APPENDIX I - CURRENT HEALTH INSURANCE AND NURSING HOME BENEFIT ARRANGEMENTS

Under p re s e n t arrangem ents, a person may e le c t to in s u re fo r b oth m edical

and h o s p ita l in s u ra n c e , o r fo r o n ly one o f th e s e , o r fo r n e ith e r . A ll

reco gn ised Funds must o f f e r 'b a s ic ' ta b le s o ffe r in g m edical cover a t th e 85

per ce n t o f scheduled fee le v e l, and f u l l h o s p ita l coverage f o r shared

accommodation a t th e $50 per day le v e l.

Funds may a ls o o f f e r a wide range o f o th e r packages, in c lu d in g some w ith

fro n t-e n d d e d u c tib le s , some w ith f u l l coverage o f Scheduled m edical fees

(known as 'g a p ' in s u ra n c e ) and some w ith v a rio u s le v e ls o f re fu n d on a wide

range o f param edical and d e n ta l s e rv ic e s . In the fo llo w in g paragraphs, the

o p tio n s open to in d iv id u a ls and th e a s s o c ia te d im p lic a tio n s f o r th e way in

w hich h e a lth care i s fin a n c e d are examined.

M ed ica l - U ninsured

A person may o p t n o t to take o u t any cover fo r m edical expenses. T his is

because he i s prepared to meet th e f u l l c o s t o f any m edical s e rv ic e fo r

w hich th e Schedule fee is le s s than $20. The u n iv e rs a l Commonwealth M edical

B e n e fit meets th e excess above th e schedule fee and $20 fo r any o th e r

s e rv ic e s p ro v id e d he r e g is te r s w ith a Fund. Net o u tla y s may be re b ate a ble

f o r ta x .

The Commonwealth fin a n c e s th e c o s t o f m edical s e rv ic e s p ro vid e d a t no charge

to :

. e li g ib l e v e te ra n s ,

. e li g ib l e p e n s io n e rs , and

. p a tie n ts c la s s if ie d by t h e ir p r a c titio n e r s as 'd is a d v a n ta g e d '.

M ed ica l - In sured

A u s tra lia n s now have th e ch oice o f a v a r ie ty o f insurance arrangem ents

c o v e rin g m ed ica l expenses. These may be o ffe re d by the t r a d it io n a l

V o lu n ta ry H e a lth Insurance o rg a n is a tio n s which operate on th e community

r a tin g p r in c ip le , o r by comm ercial in s u re rs who f i x premiums on the b a s is o f

r is k assessm ent, w ith ra te s determ ined p r im a r ily by age o f e n try to the

scheme and by fa m ily s ta tu s .

In g e n e ra l, com m unity-rated V o lu n ta ry H ealth Insurance o rg a n is a tio n s o ffe r

two cla s s e s o f c o ve r: a b a s ic cover which p ro vid e s fo r payment by th e Fund

o f 85 per ce nt o f the scheduled fee in re s p e c t o f any s e rv ic e f o r which th a t

fee was le s s than $20, and 'g a p ' cover which p ro vid e s fo r payment o f 100 per

ce nt o f th a t fe e . Many o rg a n is a tio n s a ls o o f f e r v a rio u s forms o f a d d itio n a l

co ver, e xten din g to d e n ta l s e rv ic e s , ambulance s e rv ic e s , v a rio u s

hom e-nursing and param edical s e rv ic e s , sp e c ta c le s and s e rv ic e s rendered to

in s u re d people when o u ts id e A u s tr a lia .

In sured people are e n t it le d to Commonwealth m edical b e n e fits in re s p e c t o f

s e rv ic e s fo r which the scheduled fee exceeds $20. T his b e n e fit i s p aid by

t h e ir in s u re rs as agents o f th e Commonwealth Department o f H e a lth .

P u b lic H o s p ita l S e rvice s - Uninsured

A ll A u s tra lia n re s id e n ts who are n o t p r iv a t e ly in su re d are e n t it le d to fre e

accommodation and tre a tm e n t by h o s p ita l d o c to rs . There is no means te s t or

o th e r c o n d itio n o f access.

The uninsured are a ls o e n t it le d to fre e ca re , w ith o u t means t e s t , a t

c a s u a lty /o u tp a tie n t departm ents o f p u b lic h o s p ita ls .

P u b lic H o s p ita l S e rvice s - In sured

Provided he has b a s ic h o s p ita l insurance cover fo r $50 per day, a p a tie n t is

e n t it le d to fre e accommodation and h o s p ita l s e rv ic e s in a shared ward.

P riv a te accommodation a ttr a c ts an a d d itio n a l charge o f $25 per day, which is

in s u ra b le . A 'p r iv a t e ' p a tie n t is lia b le to meet any charges le v ie d by the

d o c to r o f h is ch oice i f he i s n o t a ls o c a rry in g m edical insu ra n ce.

P r iv a te ly in s u re d p a tie n ts are e n t it le d to tre a tm e n t a t casualty/em ergency

departm ents and a t o u tp a tie n ts ' c lin ic s by h o s p ita l d o c to rs . H o s p ita ls in

some S ta te s le v y a charge which is f u l l y covered by insu ra n ce.

An i l l u s t r a t i o n o f these 'c o s t- s h a r in g ' arrangements is given in Table 1.1.

Table 1.1 Source o f Funds

D o lla rs

Commonwealth S ta te

Insurance Fund

P a tie n t Payments

In s u re d person - h o s p ita l

($100 per bed-day) 25 25 50

U ninsured person - h o s p ita l ($100 per bed-day) 50 50 - -

In s u re d person (75%) - Schedule m ed ica l fee o f $30 10 - 15 5

U ninsured person - Schedule m ed ica l fee o f $30 10 - - 20

N ursing Home Care - U ninsured P a tie n ts

A Commonwealth B e n e fit, e q u iv a le n t to th e b e n e fit e n title m e n t o f in s u re d

p a tie n ts , is payable to th e p a r tic ip a tin g n u rs in g home on b e h a lf o f the

p a tie n t. Rate o f b e n e fit v a rie s between S ta te s . At p re sen t i t ranges from

$158.90 per week in V ic to r ia to $96.95 in Queensland and Western A u s tr a lia .

An a d d itio n a l b e n e fit o f $42 per week is payable where p a tie n ts are deemed

to re q u ire e x te n s iv e n u rs in g c a re .

P a tie n ts in r e c e ip t o f a pension are re q u ire d to pay a S ta tu to ry

c o n tr ib u tio n tow ards t h e ir c a re . T his i s s e t a t 87.5 per c e n t o f the

maximum s in g le ra te p en sio n, p lu s supplem entary a s s is ta n c e , and is c u rr e n tly

$54.95 per week.

For D e f ic it funded n u rs in g homes, no b e n e fit i s payable, b u t th e p a tie n t is

re q u ire d to make the s ta tu to r y c o n tr ib u tio n . The d e f i c i t (on an agreed

budget b a s is ) i s funded by th e Commonwealth.

No b e n e fit is payable fo r non p a r tic ip a tin g n u rs in g homes. P a tie n t fe e s , i f

any, are a t S ta te Government d is c r e tio n . The d e f i c i t is funded by the S tate

Government concerned.

N ursing Home Care - In s u re d P a tie n ts

For p a r tic ip a tin g and d e f i c i t funded n u rs in g homes, h e a lth in su ra n ce funds

p ro v id e a b e n e fit th ro ug h t h e ir h o s p ita l funds to in su re d p a tie n ts

e q u iv a le n t in amount to th e Commonwealth b e n e fit fo r uninsured p a tie n ts .

These b e n e fits a f t e r th e f i r s t 35 days are funded through a re in su ra n ce

account which i s su b s id is e d by the Commonwealth to the e x te n t o f $50 per

annum, o r a p p ro x im a te ly 20 per ce nt o f th e t o t a l amounts payable by

th e funds in re s p e c t o f lo n g s ta y p a tie n ts .

No in su ra n ce fund b e n e fits are payable in re sp e ct o f lon g s ta y p a tie n ts in

n o n - p a r tic ip a tin g n u rs in g homes.

Funding o f n u rs in g home accommodation is thus s p l i t between the

Commonwealth, th e S ta te s , th e p a tie n ts , and th e insurance funds, w ith the

p a tie n t c o n tr ib u tio n fo r pensioners being funded by th e Commonwealth.

Other S e rvice s

Those who e le c t to in s u re under e x tra -c o v e r ta b le s o ffe re d by some funds are

e n t it le d to b e n e fits fo r a wide range o f o th e r s e rv ic e s , in c lu d in g one or

more o f th e fo llo w in g :

. d e n ta l tre a tm e n t

. sp e c ta c le s

. p hysiothe ra py

. o rth o p tic s

. p harm aceuticals

. coverage w h ils t overseas

Coverage is lim ite d as to amount in any one year fo r any one p a tie n t, and

a lso i s fix e d so as to have a s ig n if ic a n t p a tie n t c o n tr ib u tio n fo r s e rv ic e s

o th e r than those rendered abroad, when the A u s tra lia n schedule fee w i l l be

the b a s is fo r payment which may o r may n ot cover c o s ts . Those who o pt not

to cover them selves in t h is way are re s p o n s ib le fo r t h e ir own c o s ts . Net

o u tla y s may be re b a te a b le fo r ta x .

APPENDIX J - THE DEFLATION OF HEALTH EXPENDITURES

In areas o f government consum ption e x p e n d itu re , li k e h e a lth , o u tp u t is

measured by summing th e va lu e o f in p u ts used. E xpenditure can, o f course,

r is e e it h e r th ro ug h an in c re a s e in the money p ric e o f these in p u ts o r an

in c re a s e in th e q u a n tity o f in p u ts used. In o rd e r to remove th e d ir e c t

e f f e c t o f changes in p ric e s d u rin g the p e rio d under review and th u s to

e s tim a te th e 'r e a l ' change in e x p e n d itu re , i t is necessary to d is c o u n t the

money in c re a s e s in e x p e n d itu re by some measure o f i n f la t i o n .

A number o f methods o f d e fla tin g a c tu a l e x p e n d itu re s are a v a ila b le depending

on th e purpose in m ind. On th e one hand, i f one is in te re s te d s o le ly in

comparing th e ra te o f in c re a s e s in h e a lth e xp e n d itu re s w ith some n a tio n a l

norm, and th u s id e n t if y in g th e in cre a se th a t was a d d itio n a l to the g eneral

r a te o f i n f l a t i o n , then an a p p ro p ria te s e rie s to use could be the Consumer

P ric e Index ( C . P . I . ) . The C .P .I. re co rd s movements over tim e in

th e p ric e o f a s e le c te d basket o f r e t a i l goods and s e rv ic e s .

On th e o th e r hand, i f one wants to examine the e x te n t o f th e r e a l increase

in h e a lth e x p e n d itu re s a lo n e , then some d e fla to r which is s p e c ific to the

h e a lth s e c to r (and which th e re fo re c a p tu re s some o f these h e a lth - s p e c ific

c o s ts ) is re q u ire d . In the absence o f a h e a lth s e rv ic e s p ric e in d e x , one

measure which can be used is th e I m p lic it P ric e D e fla to r fo r Government

F in a l Consumption E xp en d iture on H e a lth , S o c ia l S e c u rity and

W elfare ( I . P . D . ) .

I f , f o r example, a c tu a l e x p e n d itu re s in c re a s e by 15 per ce n t (fro m an index

o f 100 to 115) and th e I.P .D . in cre a se s by 10 per ce n t (from 100 to 110),

over the same p e rio d , the a s s o c ia te d in c re a s e in r e a l e x p e n d itu re is

A .5 p e r c e n t ( ie . 115 -1 1 0 ). The I.P .D . has been used in d e fla tin g h e a lth

e x p e n d itu re s because i t r e la te s to a more re le v a n t group o f s e rv ic e s than

th e C .P .I. About 90 per ce nt o f t o t a l e x p e n d itu re on h e a lth , s o c ia l

s e c u r ity and w e lfa re is accounted fo r by h e a lth and over th re e -q u a rte rs o f

movements in t h is component are a ttr ib u t a b le to changes in wages and

s a la r ie s . When u sin g th e d e fla to r i t is assumed th a t the s k i l l com position

o f la b o u r in th e h e a lth s e c to r has n ot changed s ig n if ic a n t ly sin c e the base

year (19 74 -7 5).

The d iffe re n c e s between the C .P .I. and the I.P .D . fo r the years between

1968-69 and 1978-79 are shown in the Table 2 in the s e c tio n 'A u s t r a lia 's

H ealth B i l l ' . Because h e a lth p ric e s increased a t a ra te in excess o f

g en eral i n f la t i o n d u rin g t h is p e rio d , the I.P .D . increa se s a t a fa s te r ra te

than the C .P .I.

W ith re fe re n c e to the d e fla tio n o f s e c to r e x p e n d itu re s , the Commission has

been inform ed th a t d e fla to r s are being developed. I f a p p ro p ria te s e c to r

d e fla to r s are a v a ila b le , th e Commission w i l l use them in i t s F in a l R eport.

APPENDIX K - COMMONWEALTH-STATE HEALTH FUNDING ARRANGEMENTS

R ecu rre nt fu n d in g arrangem ents f o r h o s p ita ls are o n ly one component o f a

range o f Commonwealth and S ta te h e a lth programs c o v e rin g a broad spectrum o f

i n s t it u t i o n a l and n o n - in s t it u t io n a l s e rv ic e s . D iscussion o f th e h is t o r ic a l

developm ent o f th e m ajor areas o f Commonwealth-State fin a n c in g arrangem ents,

as th e y a f f e c t the h e a lth fu n c tio n , is d e a lt w ith as fo llo w s :

. H o s p ita ls fu n d in g arrangem ents p r io r to 1975,

. H o s p ita ls C o st-S h a rin g Agreements, 1975,

. Revised C ost-S h a rin g Agreements, 1976,

. H o s p ita ls Development Program,

. A s sista n ce to N ursing Homes,

. Community H e a lth Program,

. R e p a tria tio n H o s p ita ls , and

. P s y c h ia tr ic I n s t it u t io n s .

H o s p ita ls Funding Arrangements P r io r to 1975

D uring the decade p r io r to 1975, Commonwealth a ss is ta n c e tow ards h o s p ita l

o p e ra tin g c o s ts was c h a n n e lle d th ro u g h :

. h o s p ita ls , in th e form o f bed-day payments fo r u ninsu red p a tie n ts

and p e n s io n e rs , and

. p r iv a te H ea lth Insurance o rg a n is a tio n s in th e form o f a bed-day

s u b sid y fo r in s u re d p a tie n ts .

In a d d itio n to these bed-day payments, th e Commonwealth c o n trib u te d to the

o p e ra tin g c o s ts o f h o s p ita ls th ro ug h th e S p e c ia l Account, S u bsidised H ealth

B e n e fits Plan and P harm aceutical B e n e fits Scheme.

In 1953, th e Commonwealth Government b e n e fit met tw o -th ird s o f the p u b lic

ward fe e . S ubsequently, d a ily ra te s o f b e n e fit increased a t a much slow er

r a te than in c re a s e s in h o s p ita l c o s ts . As a r e s u lt , the Commonwealth share

o f h o s p ita l fin a n c in g f e l l from 21 per ce n t in 1969-70 to 13 per ce n t in

1974-75 and th e r e la t iv e fu n d in g c o n tr ib u tio n s by S ta te governments and

p r iv a te H ea lth Insurance o rg a n is a tio n increa se d a c c o rd in g ly (see Table K . l) .

Table K . l Sources o f Funds fo r P u b lic and P riv a te H o s p ita ls ( a ) ,

1969-70 to 1977-78

Per Cent

Government P riv a te

Commonwealth S ta te Insurance Funds In d iv id u a ls

Other (b) TOTAL

1969-70 20 50 21 8 2 100

1972-73 21 47 22 9 1 100

1974-75 13 59 22 3 4 100

1975-76 4 3 (c) 37 12 2 5 100

1976-77 4 3 (c) 36 16 2 3 100

1977-78 41 34 18 2 5 100

Sources: Annual R eport, D ire c to r-G e n e ra l o f H e a lth , 1972-73, p.267 J .S . Deeble and R.B. S co tto n , 'H e a lth S ervices and th e M edical P ro fe s s io n ' Commonwealth Department o f H ealth

Notes: (a) Excludes R e p a tria tio n and m ental h o s p ita ls

(b ) In c lu d e s payment by W orkers' Compensation and T h ird P a rty Motor V e h ic le in s u re rs (c ) A djusted fo r $216 m illio n p aid in 1975-76 by the Commonwealth to th e S tate s which re la te d to 1976-77 and w hich, in o rd in a ry

circu m stan ces, would have been p a id in 1976-77.

H o s p ita ls C ost-S haring Agreements, 1975

In A p r il 1973, the Commonwealth re ce ive d a re p o rt from a H ealth Insurance

P lanning Committee which had been e s ta b lis h e d to prepare recommendations on

the im p lem en ta tion o f th e Goverment's h e a lth insurance program. The

Government, in i t s White Paper 'The A u s tra lia n H ealth Insurance Program',

November 1973, s p e lt o ut the o b je c tiv e s and d e ta ils o f b ila t e r a l H o s p ita ls

C ost-S haring Agreements to be n e g o tia te d w ith the S ta te s . The Agreements,

as u ltim a te ly fo rm u la te d , co nta ine d the fo llo w in g p ro v is io n s and o b je c tiv e s :

. c o n fin e d to recognised h o s p ita ls ,

. in c o rp o ra te d the n e t o p e ra tin g c o s ts o f c e n tr a l s e rv ic e s ,

. inten de d to f a c i l i t a t e fre e access by the uninsured to standard

ward tre a tm e n t,

. enabled fre e o u tp a tie n t tre a tm e n t,

. encouraged d o c to r payment on a s a la ry , se s s io n a l o r c o n tra c t basis

ra th e r than on a fe e - fo r - s e r v ic e b a s is , and

. s p e c ifie d h o s p ita l bed-day charges.

The H e a lth Insurance A c t, which a u th o ris e d th e Commonwealth to e n te r in t o

such Agreem ents, was passed in August 1974. The A ct p ro vid e d fo r payments

to th e S ta te s e q u iv a le n t to :

. payments o f $16 per occupied bed-day in re s p e c t o f a l l p a tie n ts in

reco gn ised p u b lic h o s p ita ls in each S ta te , and

. an amount to supplem ent these d a ily bed payments up to a t o t a l o f

50 p e r ce nt o f th e t o t a l o p e ra tin g c o s ts fo r the S ta te , le s s

revenue c o lle c te d .

The Commonwealth Government a t th e same tim e in tro d u c e d a $16 d a ily bed

payment fo r p a tie n ts in approved beds in p r iv a te h o s p ita ls . The $16 per day

s u b sid y re p la c e d the $2 per day Commonwealth b e n e fit p re v io u s ly p a id to

p a tie n ts in p r iv a te h o s p ita ls .

P r io r to th e acceptance o f th e Agreements, S ta te government s u b s id ie s

accounted fo r over o n e -h a lf o f gross p u b lic h o s p ita l co sts (T a b le K . l ) .

A llo w in g f o r a p ro je c te d 20 per c e n t growth in Commonwealth h o s p ita l b e n e fit

payments d u rin g 1975-76 and th e one year d elay in th e commencement o f the

new arrangem ents, the n e t a d d itio n a l funds made a v a ila b le to the S ta te s and

T e r r it o r ie s by th e Commonwealth from the in tro d u c tio n o f th e C ost-S haring

arrangem ents in 1975-76 were o f th e o rd e r o f $640 m illio n . (T h is fig u r e

in c lu d e s $76 m illio n fo r re c u rre n t e x p e n d itu re on h o s p ita ls in the

T e r r it o r ie s and $55 m illio n p a id to p r iv a te h o s p ita ls - see Press Statem ent

by M in is te r f o r H e a lth , 'C u rb in g R is in g H e a lth E x p e n d itu re ' , May 1979). The

more than f o u r - f o ld in c re a s e in Commonwealth a s s is ta n c e r e fle c te d the

rem oval o f charges fo r h o s p ita l s e rv ic e s (except fo r those p a tie n ts who

wanted t h e ir own ch oice o f d o c to r) as w e ll as the commitment to reim burse

h a lf o f th e n e t o p e ra tin g c o s ts o f recognised h o s p ita ls . Since 1975-76, the

Commonwealth has e c lip s e d th e S ta te s as th e m ajor fin a n c ie r o f h o s p ita ls

(See Table K . l ) .

Table K.2 Commonwealth R ecu rre nt Payments fo r H o s p ita l S e rvice s and B e n e fits , 1974-75 to 1979-80

$ m illio n

1974-75 1975-76 1976-77 1977-78 1978-79 1979-80

(e)

H o s p ita l B e n e fits (a) 141.3 110.4 48.3 71.5 53.8 53.1

P harm aceutical B e n e fits 49.1 25.6 6 .2 6 .7 5 .8 n /a

H o s p ita l Payments (b) 732.0 1 045.6(c) 1 046.1(c) 1132.4 1268.5

T o ta l (d) 190.4 868.0 1100.1 1124.3 1192.0 1321.6

Sources: Budget Paper N o .l, Budget Speech, 1979-80 and e a r lie r issue s Annual R eport o f D ire c to r-G e n e ra l o f H e a lth , 1978-79 and e a r lie r is s u e s .

Notes: (a) For 1974-75, these b e n e fits com prise bed-day payments to V o lu n ta ry H ea lth Insurance Funds and h o s p ita ls , S p e c ia l Account s u b s id ie s and S ubsidised H ealth B e n e fits Plan payments. Some o f these payments were contin ue d in t o 1975-76. (b ) In c lu d e s payments to p riv a te h o s p ita ls o f $16 per day and 50

per ce n t o f th e approved n et o p e ra tin g co s ts o f 're c o g n is e d '

h o s p ita ls . (c ) In c lu d e s a djustm e nt fo r pre-payment o f $215.6 m illio n in

1975-76 th a t would have been p a id in 1976-77 had th e o r ig in a l

Agreements n o t been declare d in v a lid in May 1976. (e) E stim ated.

With the in tr o d u c tio n o f payments under the Agreements, no adjustm ent to

o th e r areas o f Commonwealth fin a n c ia l a ss is ta n c e was made. Indeed, t h is

c o n d itio n was s p e c if ic a lly in c lu d e d in the Agreements. A c c o rd in g ly , th is

a d d itio n a l s p e c ific -p u rp o s e Commonwealth fu n d in g supplemented th e 26 per

ce nt in c re a s e th a t occurred in u n tie d General Revenue funds p ro vid e d to the

S ta te s .

In a fin a n c ia l sense, the Agreements were 'o p e n -e n d e d '. In the absence o f

any d ir e c t Commonwealth c o n tr o l over h o s p ita l budgets, the requirem ent fo r

th e S tate s to match payments on a d o lla r - f o r - d o lla r b a s is pro vid e d th e o n ly

lim it a t io n on th e Commonwealth's fin a n c ia l l i a b i l i t y .

Revised C ost-S h a rin g Agreements, 1976

In May 1976, th e o r ig in a l Agreements were d eclare d in v a lid . New Agreements

were in tro d u c e d in O ctober 1976 s im u lta n e o u s ly w ith re v is e d h e a lth insurance

arrangem ents. The Agreements p ro vid e d f o r :

. te rm in a tio n o f the $16 d a ily bed payments to p u b lic h o s p ita ls b ut

r e te n tio n fo r p riv a te h o s p ita ls ,

. th e Commonwealth to meet 50 per ce n t o f approved n e t o p e ra tin g

c o s ts o f S ta te p u b lic h o s p ita l system s, and

. e s ta b lis h m e n t o f S ta te Standing Committees o f O f f ic ia ls to

fo rm u la te aggregate h o s p ita l budgets and o f a N a tio n a l Standing

Committee o f Commonwealth and S ta te O f f ic ia ls to c o n s id e r broad

p o lic y is s u e s .

The Agreements w ith New South Wales, V ic to r ia , Queensland, Western A u s tra lia

and N orthern T e r r it o r y due to e x p ire on 30 June 1980 have been extended.

The Agreements w ith South A u s tr a lia and Tasmania are due to e x p ire in 1985.

A sso ciate d w ith th e re v is e d Agreements was a decrease in th e ra te o f growth

in Commonwealth C ost-S h a rin g o u tla y s , from a 43 per ce nt in c re a s e in 1976-77

to an average in c re a s e o f around 11 per ce n t per annum between 1977-78 and

1979-80 (see Table K .2 ).

H o s p ita ls Development Program

In 1974 the Commonwealth commenced a program o f c a p ita l e x p e n d itu re on

p u b lic h o s p ita ls , m ental h o s p ita ls and n u rs in g homes based on the 'R e po rt on

H o s p ita ls in A u s tr a lia ' . D uring the p e rio d 1973-74 to the program 's

te rm in a tio n in 1977-78, a p p ro x im a te ly $295 m illio n was p ro vid e d by the

Commonwealth f o r c a p ita l e x p e n d itu re on 'm a jo r' h o s p ita l w orks; m inor

c a p ita l works c o s tin g le s s than $50 000 b eing covered by th e c o s t-s h a rin g

arrangem ents. A lthough no e x p l i c it m atching c o n d itio n s were a tta che d to

these payments, th e S ta te s a ls o made a c o n tr ib u tio n from t h e ir own reso urces.

In a d d itio n to h o s p ita l fu n d in g arrangem ents, a number o f h e a lth s e rv ic e s

programs were in tro d u c e d o r developed a f t e r 1970.

A ssista nce to N ursing Homes

For th e purpose o f government a s s is ta n c e , n u rs in g homes are d iv id e d in to

th re e c la s s e s :

. p a r tic ip a tin g n u rs in g homes, which are recognised fo r th e payment

o f Commonwealth n u rs in g home b e n e fits ,

. d e fic it- fu n d e d n u rs in g homes, operated by n o n - p r o fit r e lig io u s and

c h a r ita b le o rg a n is a tio n s , whose o p e ra tin g d e f ic it s and the co sts o f

replacem ent o f c e r ta in eguipment are met by the Commonwealth, and

. n o n - p a r tic ip a tin g n u rs in g homes, which are S ta te government

i n s t it u t io n s , n o t recognised fo r C ost-S haring o r h e a lth insurance

purposes, and funded by S ta te governments.

The n u rs in g home b e n e fit is p aid by the Commonwealth fo r uninsured p a tie n ts

o r by p riv a te funds fo r in s u re d p a tie n ts . T o ta l Commonwealth o u tla y s in

re sp e ct o f n u rs in g home care have shown a steady growth o f 13.5 per cent per

annum s in c e 1974-75 (see Table K .3 ) .

Community H ea lth Program

In 1973, th e Commonwealth Government funded a program o f c a p ita l and

re c u rre n t g ra n ts fo r the development o f community based h e a lth s e rv ic e s ,

in c lu d in g community h e a lth c e n tre s and th e ra p e u tic day c e n tre s .

Two main c a te g o rie s o f p ro je c ts have been supported under the program:

. N a tio n a l p ro je c ts , which are conducted by non-governm ental

o rg a n is a tio n s and are f u l l y funded by the Commonwealth,

. S ta te p ro je c ts , which compromise the m a jo r ity , are conducted by

S ta te h e a lth a u th o r itie s o r by non-government o rg a n is a tio n s and are

funded through th e S ta te h e a lth a u th o r itie s . The ra te o f

Commonwealth fu n d in g was o r ig in a lly 100 per c e n t. I t has been

p ro g re s s iv e ly reduced to 50 per ce nt in 1978-79.

In 1976 the H o s p ita l and H ealth S e rvices Commission prepared a re p o rt

e n t it le d 'Review o f the Community H ealth P rogram '. The Government th a t year

in tro d u c e d a llo c a tio n s in the form o f annual b lo c k g ra n ts fo r each S ta te 's

t o t a l program o f p ro je c ts . T his replaced the e a r lie r method o f a llo c a tin g

funds s e p a ra te ly to each p r o je c t.

D uring the s ix years up to 1978-79, th e Commonwealth expended appro xim a tely

$300 m illio n on n a tio n a l and S ta te p ro je c ts , w h ile th e S tates expended

a pp ro xim a tely $90 m illio n (see Table K .3 ) .

100

R e p a tria tio n H o s p ita ls

A number o f h o s p ita ls and c l i n i c s , p ro v id in g tre a tm e n t fo r e li g ib l e veterans

and t h e ir dependants, are funded and a d m in is te re d w h o lly by th e Commonwealth

Department o f V e te ra n s ' A f f a ir s . E xp en d itures on R e p a tria tio n in s t it u t io n s

have in c re a se d a t an annual r a te o f 11.6 per ce nt d u rin g th e 5 years to

1979-80 (see Table K .3 ).

Funding and a d m in is tr a tiv e arrangem ents have n ot changed s u b s ta n tia lly

d u rin g the l a s t ten y e a rs , a lth o u g h s in c e 1973, community p a tie n ts have been

a d m itte d in in c re a s in g numbers to R e p a tria tio n General and A u x ilia r y

h o s p ita ls . There has a ls o been in c re a s in g use o f n on-departm ental h o s p ita l

s e rv ic e s by r e p a tr ia t io n b e n e fic ia r ie s .

Table K.3 N ursing Home A s s is ta n c e , Community H ealth Program and R e p a tria tio n H o s p ita ls , Commonwealth O u tla ys, 1974-75 to 1979-80

____________________________________________________________________ $ m illio n

1974-75 1975-76 1976-77 1977-78 1978-79 1979-80

(e)

N ursing Home and D o m ic ilia ry Care 161.6 195.7 234.4 254.2 268.5 304.2

Community H ea lth F a c i l i t i e s and

S e rvice s 36.0 55.4 60.8 74.0 54.2 60.2

R e p a tria tio n H o s p ita ls 98.2 117.8 126.1 142.2 153.9 170.2

S ource: Budget Paper N o .l, Budget Speech, 1979-80 and e a r lie r ye ars. N ote: (e) E stim a ted .

P s y c h ia tr ic I n s t it u t io n s

P s y c h ia tr ic h o s p ita ls p ro v id in g a c u te , c h ro n ic and p s y c h o -g e ria tric s e rv ic e s

are excluded from th e H o s p ita ls C o st-S ha rin g arrangem ents, t h e i r fu nd ing

b eing p ro vid e d la r g e ly from S ta te C on solida te d Revenue w ith a sm all

c o n tr ib u tio n by p a tie n ts them selves. In c o n tr a s t, most p s y c h ia tr ic u n its in

g e n e ra l h o s p ita ls , as w e ll as community based m ental h e a lth s e rv ic e s , are

c o s t shared w ith th e Commonwealth.

From the lim ite d data a v a ila b le , i t appears th a t o p e ra tin g e xp e n d itu re by

S ta te p s y c h ia tr ic in s t it u t io n s in 1978-79 was o f th e o rd e r o f $300 m illio n .

101

APPENDIX L - UTILISATION STATISTICS

U t ilis a t io n

In fo rm a tio n on h o s p ita l u t i l i s a t i o n , as measured by adm issions, in p a tie n ts

tr e a te d , s e p a ra tio n s o r d is c h a rg e s , i s n o t r e a d ily comparable a t a n a tio n a l

le v e l over th e p e rio d 1968-69 to 1978-79.

A s e rie s fo r years p r io r to 1975-76 is a v a ila b le fo r in p a tie n ts tre a te d in

p u b lic h o s p ita ls by S ta te and T e r r it o r y from th e v a rio u s e d itio n s o f the

Commonwealth Department o f H ea lth p u b lic a tio n 'P u b lic and P riv a te H o s p ita ls

S t a t i s t i c a l Summary1.

In the years 1975-76 to 1978-79, p u b lish e d fig u re s on s e p a ra tio n s from

p u b lic and p r iv a te h o s p ita ls are a v a ila b le from the Annual Reports o f the

H ealth Insurance Commission and, fo r 1978-79, from th e Commonwealth

Department o f H e a lth .

The two s e rie s are n o t e x a c tly comparable and th e l a t t e r s u ffe rs from

inco m p lete d a ta . Tables L . l and L .2 below show in p a tie n ts tre a te d and

s e p a ra tio n s in p u b lic h o s p ita ls fo r s e le c te d ye ars.

102

Table L . l In p a tie n ts T reated in P u b lic H o s p ita ls , by S ta te (a)

1968-69 1971-72 1974-75

In p a tie n ts per In p a tie n ts per In p a tie n ts per

tre a te d 000 tre a te d 000 tre a te d 000

p o p u la tio n p o p u la tio n p o p u la tio n

- 1 0 0 0 's 0 0 0 's 0 0 0 's

New South Wales 618 140 722 153 788 162

V ic to r ia 357 106 414 117 443 120

Queensland 269 154 290 152 312 151

South A u s tr a lia 111 98 144 121 173 139

Western A u s tr a lia 138 147 168 159 198 175

Tasmania 47 123 52 133 55 137

N o rth e rn T e r r it o r y 16 227 19 201 20 203

A.C.T. 20 171 26 172 34 184

A u s tr a lia 1576 130 1835 140 2022 148

Sources: Commonwealth Department o f H e a lth , P u b lic and P riv a te H o s p ita ls S t a t i s t i c a l Summary, 1970-71 and 1974-75 A u s tra lia n Bureau o f S t a t is t ic s p o p u la tio n fig u re s

N ote: (a ) Excludes R e p a tria tio n h o s p ita ls

Table L .2 S e pa ratio ns from P u b lic H o s p ita ls 1977-78, by S ta te

S eparations - thousands

per

000 p o p u la tio n

New South Wales 809.6 163

V ic to r ia 425.2 112

Queensland 308.3 143

South A u s tr a lia 197.5 154

Western A u s tr a lia 212.1 175

Tasmania 53.4 130

N orth ern T e r r it o r y 20.6 188

A .C .T .(b ) 41.9 198

A u s tr a lia (b) 2068.6 146

Sources: H e a lth Insurance Commission, 1977-78 Annual Report A u s tra lia n Bureau o f S t a t is t ic s p o p u la tio n fig u re s

Note: (a ) Excludes R e p a tria tio n h o s p ita ls

(b) In c lu d e s th e one (50 bed) p r iv a te h o s p ita l in A.C.T.

103

From Table L . l , i t appears th a t fo r the years 1968-69 to 1974-75, th e number

o f in p a tie n ts tre a te d per thousand p o p u la tio n was in c re a s in g in most S ta te s .

Some o f th e apparent in c re a s e , however, may be due to changes in co u n tin g

methods, w ith th e p ro g re s s iv e in c lu s io n o f one-day s ta y p a tie n ts in a t le a s t

one S ta te .

Annual Reports o f S ta te H e a lth a u th o r itie s show an in cre a se in adm ission

ra te s in s e v e ra l S tate s over the te n -y e a r p e rio d from 1968-69 to 1978-79, and

a d d itio n a l m a te ria l on the w orking e stim a te s used fo r C ost-S haring purposes

would seem to in d ic a te th a t fu r t h e r r is e s have in fa c t occurred in the years

1976-77 to 1978-79.

Table L .3 shows c o st per in p a tie n t tre a te d in each S ta te and T e r r it o r y fo r

the years 1968-69 and 1974-75.

Table L .3 P u b lic H o s p ita ls - Cost per In p a tie n t T reated, by S ta te

Cost per

In p a tie n t Treated 1968-69

Cost per

In p a tie n t Treated 1974-75

Increase 1968-69 to 1974-75

$ $ %

New South Wales 237 643 171

V ic to r ia 254 696 (e s t) 174

Queensland 181 514 184

South A u s tr a lia 244 708 190

Western A u s tr a lia 238 643 170

Tasmania 264 782 196

N orthern T e r r it o r y 250 790 216

A.C.T. 230 693 201

A u s tr a lia 233 647 (e s t) 178

Source: Commonwealth Department o f H ealth

104

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