The Australian government's 2017-18 budget claims to provide record levels of financial assistance to state governments to deliver public hospital services, from $13.8 billion in 2013-14 to an estimated $22.7 billion in 2020-21.

The 2017-18 Victorian budget complements this investment, aiming to provide us with ‘health care when we need it.’ This includes $162.7 million allocated to the Northern Hospital inpatient infrastructure redevelopment, $69.8 million jointly to Austin and Royal Melbourne Hospitals to upgrade key infrastructure, $63.2 million to upgrade the Monash Medical Centre emergency department and $50 million to Footscray hospital development.

While these projects were put on the map, others were put on the backburner – hospitals in Warragul and Ballarat are two of the ones which missed out. While public funding focused mainly on the Western and Northern growth corridors, other areas of significant demand are being addressed through other models, such as public private partnerships (PPPs). An example of such a hybrid delivery model is the planned Casey Hospital redevelopment – a PPP with Kane Constructions.

Other states and territories following the federal and state budget announcements were faced with similar pinpointed locations that were identified as “winners”, while other hospitals will need to manage with the funding they already have access to.

Important questions remain: what is the strategy for healthcare infrastructure beyond 2020? How is the Australian government trying to address growing population needs and struggling emergency departments? What is the plan for a shift in funding?

One of the areas of interest is the trialled Health Care Homes program which is part of the reform of the primary healthcare system. In a recent statement, the Australian Healthcare and Hospitals Association (AHHA) said “Health Care Homes must be more than just a new way to fund care, and must focus on the most efficient and effective ways to provide care to people with high burdens of disease.”

Let us look at some key metrics. The Australian government is funding a $21 million trial over two years. The trial is allocated to 200 general practices across the country, which already operate as medical centres but will now also serve the needs of chronically ill patients. The health care homes within GP clinics will ultimately aim to provide services for up to 65,000 Australians with chronic conditions, including complex cases involving intensive care.

Under the policy, individual Medicare payments (fee-for-service) will be replaced by a monthly payment. The amount of the payment will reflect the medical condition, complexity of treatment and level of care needed, with Health Care Homes given an annual budget of $591 to $1,795 per patient per year.

People with chronic diseases such as diabetes, heart disease, cancer and arthritis often require a range of health services, from GPs to specialists, nurses, pharmacists, physiotherapists, psychologists and dieticians.

The Royal Australian College of General Practitioners (RACGP) as well as the Australian Medical Association (AMA) have criticised the trial as lacking in funding purely from a fee for service and reimbursement standpoint. And rightfully so; the funding is inadequate. To add insult to injury, no further funding (other than the $10,000 signup bonus) has been allocated to upgrade the existing infrastructure and bring the existing practices up to higher building and safety standards to meet the more demanding needs of chronically ill people.

There is a reason why chronically ill patients attend hospitals and emergency departments, and there is also a good reason why the departments meet certain hospital standards from a building design, compliance and workflow perspective.

We can aim at taking the load off EDs – and in the long term we need to – but “plugging” them into general practices without required upgrades can potentially be a recipe for disaster due to (to name a few factors):

  • the need for 24/7 building access
  • a lack of clear and adequate and safe access for ambulances
  • inadequate electrical safety standards, including body protection and cardiac protection requirements
  • often inadequate space and lack of a separate waiting area
  • sterilisation needs and minimum requirements relevant to treatment of some chronically ill patients (including such basic requirements as flooring, ventilation and air conditioning)

These are just a few shortcomings in the infrastructure capacity of a typical medical centre. In addition to this, in an ideal scenario the Health Care Homes should also be co-located with allied health service providers, as chronically ill patients will still require access to allied health chronic disease management.

The bottom line is, the healthcare system does require decentralisation of service provision, lowering of per-patient cost and especially destressing emergency departments. Almost half of all potentially avoidable hospital admissions can be attributed to chronic conditions. However, both the regulator and participants in the program should tread carefully when trying to re-allocate patients previously attending well equipped and purpose build hospitals to general practices which in most cases were not designed or built to handle these needs.