AMA Pre-Budget Submission 2022-23 – Chapter 1: Public hospitals in crisis

Australia’s public hospitals are caught in an unending cycle of crisis caused by a funding formula. The AMA Pre-Budget Submission 2022-23 calls for targeted reforms that are needed right now to stem the public hospital crisis.  

The current funding model for our health system is not fit for purpose. It’s only focused on the number of procedures that hospitals provide. 

It doesn’t adequately account for the fact that Australia’s population is growing, ageing, and developing more complex health needs. Nor does it provide enough funding to keep people out of hospital through preventative and community care. 

Chapter 1 of the AMA Pre-Budget Submission 2022-23 details AMA’s four-point plan for public hospital reform: 

  1. Improve performance 

    Reintroduce funding for performance improvement – for example, improvement in elective surgery and emergency department waiting times – to reverse the decline in public hospital performance. 

  1. Expand capacity 

    Give public hospitals additional funding for extra beds (along with the staff) and support them to expand capacity to meet community demand, surge when required, improve treatment times, and put an end to ambulance ramping. 

  1. Addressing demand for out-of-hospital alternatives 

    Fund alternatives for out-of-hospital care, so those whose needs can be better met in the community can be treated outside hospital. Programs that work with general practitioners to address avoidable admissions and readmissions should be prioritised. 

  1. Increase funding and remove funding cap 

    Increase the Commonwealth government’s contribution to 50 per cent for activity, beyond the temporary COVID-19 specific partnership agreement. This represents an investment of $12.7 billion over four years between 2022-23 and 2025-26.  

    Require states and territories to reinvest the 5 per cent of ‘freed-up’ funds to improve performance and capacity. 

    Remove the artificial 6.5 per cent cap on funding growth that is shared between states and territories, so funding can meet community health needs based on realities on the ground. This represents an investment of $7.8 billion over four years between 2022-23 and 2025-26. 

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