Catholic Communications, Sydney Archdiocese REPORT
19 Feb 2013
Catholic Hospitals Care for One in 10 Australians
In the wake of the Federal Government funding cuts, Catholic public hospitals will be forced to reduce as many as 50 beds this year. The hospitals will also have to cut back on elective surgeries, reduce access to Intensive Care Units and terminate staff, says Martin Laverty, CEO of Catholic Health Australia (CHA).
In Treasurer, Wayne Swan's 2012-2013 Mid-Year Economic and Fiscal Outlook released in October last year, Catholic public hospitals discovered funding promised in the previous May budget had been reduced by $20 million under the Government's National Health Reform Funding initiative.
Across all public hospitals in all states the discrepancy between the Government's 2012-2013 Budget and the Mid Year Economic and Fiscal Outlook was equally alarming showing an overall reduction in funding of more than  $254 million.
But what is even more worrying is the Commonwealth warning  hospital funding will be slashed by $1.5 billion over the next four years.
The Catholic Church operates 75 hospitals and 550 residential and community aged care services throughout Australia
CHA represents 75 public and private Catholic Hospitals across Australia. On any given day, one in 10 hospital patients is being cared for in a Catholic public or private hospital with Catholic hospitals' 2,300 public beds accounting for around 5% of all of Australia's public beds.
Of the nation's 19 public Catholic hospitals which are operated under contract to State or Territory governments in Qld, NSW, Vic, WA and the ACT, all are privately owned and operated as not-for-profit entities.
"The mission of Catholic services to particularly look after the poor and vulnerable means that Catholic public hospitals will try to avoid reducing services that will impact on those least able to make other arrangements," Mr Laverty says and warns that the extent of the funding cuts "threatens to hurt those within our community who would be most impacted by reductions in availability of public hospital services."
He also takes issue with the belated timing of the funding cuts which came midway through the current financial year.
Martin Laverty Chief Executive Officer of Catholic Health Australia
"Whilst no hospital group is likely to ever welcome reductions in funding as demand for services continues to grow, the way the funding reductions have been imposed part way through the financial year has been particularly difficult to deal with and has magnified their impact," he says.
Although the cuts cover the full financial year, the reductions required by hospitals have to be made in the final six months of the year, multiplying the adverse effect of these cuts.
As Catholic public hospitals are Not-for-Profit and privately owned, their fiduciary duty is to acquit their service funding by "breaking even" and are not able to overrun their allocated  budgets in the hope of a subsequent financial bailout  as has occurred with some State and Territory operated public hospitals.
"As a result cuts to service revenue have to be offset by reductions in service output," he says.
Particularly troubling for Mr Laverty is the fact that after four years of intense health reform effort, where the need to move away from a culture of cost and blame-shifting between different tiers of government was a constant theme, Australia's public health care consumers and health care professionals have once again been impacted by a continuing consequence of poor management of Commonwealth-State financial arrangements.
In his submission to the Senate Standing Committee on Finance Public Administration on the Implementation of Commonwealth's National Health Reform Agreement, lodged late last week, Mr Laverty predicted further reductions in services at Catholic public hospitals would have to be made as a result the Commonwealth's intention to reduce funding further over the next four years.
Catholic hospitals account for 2300 public hospital beds across Australia
"One potential impact of the public hospital funding reductions may be that public hospital managers seek to augment their revenue by treating additional private patients, and indeed are currently incentivised to do so," he writes his submission on behalf of CHA and the nation's Catholic public hospitals. "In the context of shrinking public capacity, the targeting of additional private patients by public hospitals, particularly if it is at the expense of the treatment of public patients will further exacerbate public patient waiting times and further undermine the Medicare principle of universal access to treatment at the time of need, regardless of financial circumstance."
Mr Laverty believes for public hospitals what would ultimately be preferable would be for Australia to move to a system where a single tier of government takes responsibility for funding publicly delivered health services.