Davis' plea on 'spurious' health cuts

VICTORIAN Health Minister David Davis says he remains hopeful the Commonwealth will revise its multimillion-dollar budget cuts to Victoria's health system because of the catastrophic effect it would have on patient care.

Mr Davis said state health ministers had asked to discuss the issue with federal Health Minister Tanya Plibersek on December 14 because of continuing concerns about the population data used in October to cut $403 million from the states' allocation of federal health funding.

He said the change was based on ''spurious'' new Australian Bureau of Statistics data showing Australia's population had increased 0.03 per cent between 2010 and 2011, with Victoria's population dropping about 11,000 people. Mr Davis said other ABS data showed Victoria's population increased 1.4 per cent during this time.

''They have used these figures to rebase the whole thing,'' he said. ''The Commonwealth is quite isolated on this. Six state governments are unhappy, clinician groups are unhappy and health services are unhappy … They should make a proper and honest assessment of population growth in Australia.''

The federal government will not release the data used to calculate the adjustment, but a spokesman for Treasurer Wayne Swan said funding adjustments had been made in line with the national health agreement signed by governments last year.

''Over the next four years, health funding to Victoria is increasing from $3.6 billion to $4.5 billion - an increase of nearly $930 million, more than 25 per cent,'' he said.

While the Commonwealth revises health funding based on fluctuating population estimates and the changing cost of health care, Ms Plibersek wrote to Mr Davis in October that the ''major driver'' of this year's adjustment was the changing price of health care measured by the Australian Institute of Health and Welfare's health price index, not population changes.

Mr Davis disputes this. He said three-quarters of the funding adjustment was based on the questionable new ABS population data and that Victoria now had to pay back $40 million from the last financial year and weather a $67 million cut this year.

On Monday, Victorian hospital chiefs wrote to Prime Minister Julia Gillard pleading for her to revise the cuts because they had ''grave concerns'' about the impact, which could close 440 hospital beds over the next seven months, the equivalent of an entire tertiary hospital in Melbourne.

Victorian doctors say this could double the time many people wait for elective surgery and cause dangerous delays in emergency care.

Australian Medical Association Victoria president Stephen Parnis said the ''blame game'' between governments had never posed a greater threat to patient care and doctors were losing sleep over the cuts.

Dr Parnis said although he was waiting on more information from the Commonwealth about the issue, he found it ''disconcerting that census data could be reviewed in this way''.

''If it is a state or federal government that is responsible, we will speak without fear or favour, but in this instance our concerns certainly lie on the federal side,'' he said.

''We want a systemic fix. The system cannot afford this blame game getting worse, involving even greater figures of dollars and the patients being the ones who suffer as a result.''

At the moment, the federal government contributes about a third of the funding given to Victorian public hospitals.

A spokesman for Ms Plibersek said Victoria was responsible for distributing Commonwealth funding to its hospitals and that any decision to cut hospital budgets was the state government's decision, not the Commonwealth's.

The pain can only get worse

  • Under the health agreement between the federal and state governments, the Commonwealth adjusts its contribution to the states annually depending on fluctuations in the price of delivering health care and changing population data for the previous year.

  • In October, the Commonwealth said the latest ABS data for 2011 showed Australia’s population had not grown as much as expected. This meant states had been given $403 million more than they needed to deliver health care to their respective populations in 2011-12 and 2012-13.

  • The Victorian Government was told it had been overpaid $107 million based on population data showing a reduction of about 11,000 people between 2010 and 2011. It says this is wrong and that ABS data shows its population has grown about 1.4 per cent between 2010 and 2011.
  • State health ministers have demanded the Commonwealth revise its calculations. The Commonwealth has refused and says Victoria is using incorrect figures for its claims. The Commonwealth says it has followed the formula for funding changes agreed to in the health agreement last year.

This story Davis' plea on 'spurious' health cuts first appeared on The Sydney Morning Herald.