On his campaign trail, Prime Minister Anthony Albanese pledged A$200 million to upgrade St John of God Midland Public Hospital in Perth. He promised more beds and operating theatres, and a redesigned obstetrics and neonatal unit.
Authors
- Anam Bilgrami
Senior Research Fellow, Macquarie University Centre for the Health Economy, Macquarie University
- Henry Cutler
Professor and Director, Macquarie University Centre for the Health Economy, Macquarie University
It followed other recent election promises from the Labor government, including $120 million for new birthing facilities at Sydney's planned Rouse Hill Hospital and $150 million to build a health centre in southern Adelaide.
New and expanded health facilities are welcome in fast-growing communities. But are hospital funding pledges in election campaigns based on health-care or political needs?
Does pork-barrelling drive health funding decisions?
Labor and the Coalition have faced allegations of pork-barrelling this election campaign.
Pork-barrelling means using public funds to target specific electorates to win votes, rather than allocating resources based on need. Four in five Australians consider pork-barrelling to be corrupt.
Former New South Wales Premier Gladys Berejiklian suggested pork-barrelling was "business as usual" in her government .
It also seems to occur at the federal level. The Australian National Audit Office found a $1.25 billion Community Health and Hospitals Program implemented by the former Morrison government " fell short of ethical requirements " and deliberately breached Commonwealth grant guidelines.
Of the 63 major projects funded, only two were rated "highly suitable" - the usual benchmark for shortlisting . In fact, most approved projects were picked by the government outside of the established expression of interest processes.
Who funds and manages public hospitals?
The National Health Reform Agreement makes states and territories responsible for managing public hospitals. States and territories contribute around 58% of hospital funding. They also oversee planning and infrastructure.
Local hospital networks help plan and implement capital projects such as new hospitals and facility upgrades.
Under the National Health Reform Agreement, the Commonwealth government also contributes public hospital funding through:
activity-based funding. This is tied to the number and type of patients treated
block funding for smaller regional and rural hospitals
public health funding for initiatives such as vaccination programs.
The reform agreement outlines the Commonwealth's responsibility for supporting public hospital services. But it doesn't restrict the Commonwealth from making hospital infrastructure promises.
The Commonwealth often pledges direct hospital funding through supplementary agreements or ad hoc initiatives. Earlier this year, it announced an additional one-off $1.7 billion payment to ease pressure on public hospitals.
State planning vs federal politics: who decides?
States use formal planning frameworks to plan and prioritise health infrastructure projects. NSW Health, for example, applies a structured Facility Planning Process for projects over $10 million. This considers local population needs, health and community benefits, costs and workforce capacity.
These types of frameworks help ensure health capital investment decisions are transparent and evidence-based.
What is less transparent is how the Commonwealth decides which specific hospitals to pledge money to, particularly during election campaigns.
While some federal funding announcements may align with state priorities, picking one hospital over another comes with an " opportunity cost ". For every community that benefits from a new or upgraded hospital, another potentially higher-need community may miss out.
To prevent Commonwealth funding decisions being swayed by political priorities, more transparent processes for setting priorities and making decisions are needed.
What would a better system look like?
The way funds are allocated to medicines listed on the Pharmaceutical Benefits Scheme (PBS) provides the federal government with an exemplary approach to good health-care investment decisions.
The Pharmaceutical Benefits Advisory Committee (PBAC) provides independent advice to the Minister for Health on whether the government should allocate millions to new medicines. The PBAC uses rigorous, transparent processes to make listing recommendations based on patient need and cost-effectiveness.
Federal government hospital infrastructure funding decisions should also follow open, competitive, merit-based processes .
Prioritising evidence and having transparent decision-making guidelines would mean funding is more likely to be allocated based on the greatest population need rather than electoral considerations.
Other ways to improve federal government hospital funding decisions may include:
incorporating nationally agreed principles for hospital capital funding in future National Health Reform Agreements
increasing transparency. This could be achieved through a national public register of hospital development proposals, ranked by urgency and need
strengthening safeguards on election-period pledges. This could improve disclosures and ensure hospital funding decisions align with independent needs assessments.
More hospitals or better prevention?
Former St Vincent's Health CEO Toby Hall put it bluntly :
If Australia is to make the most of its healthcare future, it will likely need fewer hospitals, not more.
He pointed to Denmark, which cut its number of hospitals by 67% over 1999-2019. This was achieved by shifting as many services as possible from hospitals to other types of health care including primary care, health centres and outpatient clinics.
While more hospitals in Australia may be inevitable as the population ages , health policy should also focus on keeping people out of hospital in the first place. That means investing in prevention, early intervention and technology to support care at home.
Australia lags behind other wealthy nations in this space, ranking 20th out of 33 OECD countries in per capita spending on prevention. It ranks 27th when measured as a share of total health expenditure.
Some local health districts are showing what's possible. This includes using home monitoring to help people manage chronic conditions. These kinds of innovations can improve health and reduce pressure on hospital infrastructure.
While new hospitals and wards make for compelling election promises, a better health system will come not just from " bricks and mortar ". It will come from smarter investments in prevention, early intervention and innovative care that keeps people healthier and out of hospital.
Henry Cutler was a member of an Expert Advisory Panel where he received remuneration from the Department of Health and Aged Care for this role. Henry has also previously received funding from NT Health.
Anam Bilgrami does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
