Consumers, not Commonwealth budget bottom line, must be at heart of health funding reform

Tuesday, June 23, 2015

“Any reform in the funding of public hospitals and the health system more broadly must be patient-centred, and have at its foundation safety and quality of care that is affordable for all Australians.”

Commenting on recently leaked options on the Commonwealth funding of public hospital services, Alison Verhoeven, Chief Executive of the Australian Healthcare and Hospitals Association (AHHA) accepted the need to canvas a range of options for reform of the Australian healthcare system.

“We recognise the value of thoughtfully and rigorously exploring alternative health funding and service delivery options in an open and transparent manner,” said Ms Verhoeven. “But this absolutely must take a broader approach beyond simply considering the impact on the Commonwealth Budget bottom line.”

The Government’s Reform of the Federation white paper process supports placing the responsibility for the delivery of health services with the lowest level of government possible. However, the Government’s discussion around this has also repeatedly acknowledged the considerable funding constraints faced by the States and Territories in fulfilling this service obligation. The Australian Institute of Health and Welfare has also shown that in 2012–13, individuals directly paid for 17.8% of total health expenditure.

“The leaked proposals on funding public hospitals describe how the Commonwealth could step away from its current obligation to contribute to the funding of essential hospital services,” noted Ms Verhoeven. “But any changes need to consider the impact on consumers’ already significant out‑of‑pocket expenses, particularly for the most vulnerable low income Australians and those with chronic and complex conditions.

“Floating options for hospital funding reforms ahead of the COAG Leaders’ Retreat in July must take a larger whole-of-system view that presents sustainable and durable options for funding of public hospitals and the broader health system.”

With significant cuts of over $57 billion already made by the Government to public hospitals funding between 2017-18 and 2024-25, it is concerning that consideration would apparently be given to removing all remaining Commonwealth funding for public hospitals, without viable alternatives for States and Territories to address this massive shortfall.

 “The Government cannot walk away from its obligation to fund public hospitals without providing a realistic alternative funding plan that does not burden consumers with onerous out-of-pocket expenses, and ensures that all Australians have equitable access to safe, quality, affordable healthcare.”


The Australian Healthcare and Hospitals Association is the national peak body for public and not-for-profit hospitals, community and primary healthcare services, and advocates for universal, high quality and affordable healthcare to benefit the whole community.

Media enquiries:

Alison Verhoeven

Chief Executive, The Australian Healthcare and Hospitals Association

0403 282 501