Health Commission of Victoria Annual Report 1981/82
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fC» Health Commission of Victoria Annual Report 1981/82 VICTORIA Report of the HEALTH COMMISSION OF VICTORIA for the Year ended 30 June 1982 Ordered by the Legislative Assembly to be printed MELBOURNE F D ATKINSON GOVERNMENT PRINTER 1982 No. 59 Enterprise House 555 Collins Street. Melbourne November 1982 The Honourable T.W. Raper Minister of Health Sir The members of the Health Commission of Victoria have pleasure in submitting this, the fourth Annual Report of the Commission, for presentation to Parliament. Gad Trevaks Chairman Jack Lewis Evans Full-time member James Anthony Ryan Full-time member Miss Mona Menzies Part-time member Professor Kenneth Hunt Part-time member Mr. John Waiter Part-time member Mr. Ernest Tucker Part-time member Peter Robert Wilkinson Secretary The Division Directors Dr. Bertram McCioskey Public Health Mr. Errol Cocks Mental Retardation Dr. David Race Hospitals Dr. George Lipton Mental Health Dr. Richard Scotton Planning Mr. James Hicks Building and Services Mr. Tony Clifford Finance Mr. Pat Daly Personnel Contents The Commission's Review ..................... 6 Public Heatth Division Services ..............• 20 Mental Heatth Division Services . 32 Hosprtals Division Services . • . 36 Mental Retardation Division Services . • . • • • • . 43 The Planning Division Report ..........•...... 47 The Personnel Division Report . • . 52 The Finance Division Report . 56 The Building & Services Division Report . • . 64 The Commission's Review of 1981/82 Introduction ................................. 7 Commonwea~h-State Funding ............•..... 7 Hea~h insurance campaigns . 10 The regionalisation proposal . • 11 Review of Tuberculosis Services . • • . 14 Review of School Dental Services . • • • • • • • • 14 The first year of the Mental Retardation Division .. .. .. 15 Developments wrthin the Planning Division . 15 I.Y.D.P.•••••.......•..•.....•.•.•••••••••. 16 Hea~h promotion • . 16 Anti-rubella campaigns in industry . • 17 Acupuncture concern . 17 Legislation .. .. .. .. .. .. .. .. .. .. 17 Introduction designated categories of social disadvantage, for the financial protection of patients, except through the The past year saw a consolidation of the Commission's private insurance system. services to the community. The manpower and financial constraints imposed during 1980/81 continued The new funding arrangements replaced the special during 1981 /82, but the greatest single influence on the purpose cost-sharing grants for public hospitals, State's heatth services was the term1nat1on of the community health projects and school dental services Commonwealth/State cost-sharing agreement. The by an identified Health Grant unrelated to the costs ramifications of this decision were, and are, so far incurred in operating these services. The formula took reaching that the Commission feels bound to explain as its base the actual cost-sharing grants paid in them in detail. 1980/81 and applied predetermined escalation factors of a flat 10 per cent increase in 1981/82 and the actual Commonwealth-State Funding consumer price movement over two years to 1982/83 The single most important event which affected the effectively a further ten per cent in that year. context within which the Commission operates was the These escalation factors fell far short of actual implementation of new funding arrangements by the movements in hospital costs especially those of Commonwealth Government on 1 September 1981. wages and salaries. Statistics produced for the The new arrangements terminated the 50/50 sharing Commission indicate that the actual movement in by Commonweatth and State Governments of the net award wages and salaries between June 1981 and operating costs of public hosp~als which had operated June 1982 was 18.9 per cent. in Victoria since 1 August 1975. The terms ofthe original In addition, the amounts so calculated were not paid to Commonwealth-State agreement were modified in the States: from them were deducted amounts equal to October 1976 and the agreement was subsequently the additional revenue assessed by the Commonwea~h extended for one year beyond its expiry date of 30 June to be received from fees charged in public hospitals 1981, pending the report of the Commission of Inquiry after 1 September 1981: into the Efficiency and Administration of Hospitals (Jamison Commission). (a) at increased rates of The main features of the cost-sharing agreements $80 per day in multi-bed wards (formerly $50). between the Governments, as they operated after 1976, $110 per day in single rooms (formerly $75), were that the States undertook to provide treatment and and accommodation in public hospitals free of charge to all uninsured patients and at agreed fees to privately $20 per outpatient occasion of service (formerly $6 per attendance), and insured patients. In return, the Commonwea~h con tributed fifty per cent of the net operating costs of public (b) as the result of charging fees to all patients except hospitals as incorporated in agreed budgets. These to holders of persioner health benefrt cards and arrangements involved the two levels of grovernment in health care cards issued to persons in a reciprocal set of responsibilities for the delivery, pricing disadvantaged categories, it was estimated by the and funding of public hospital services, the detailed Commonwealth that this change would increase operation of which was worked out at periodic meetings paid bed days by ten per cent, from the 1980/81 of Slate and National Standing Committees. actual percentage of 44.6 per cent of all inpatient days to forty-nine per cent of all days. Atthough it was crnical of the incentives incorporated in the cost-sharing formula, the Jamison Commission The Commonwealth estimated that the additional fee recommended that the joint responsibiltty of the revenue to be raised by public hospitals from these Commonweatth and State governments be continued measures would be $106.6 million in a full year. Since and the consultative framework strengthened. the fees to be charged from 1 September 1981 would be The new policy announced by the Commonwealth in collected wnh a lag (estimated at one month) the April1981 and largely implemented in September of that Commonwealth legislation provided !bat whereas in year represented a radical departure from the system 1982/83 the full amount of assessed additional revenue which had operated for nearly six years. In effect, it raising capacity would be deducted, in 1981 /82 the constituted an almost complete withdrawal of deduction from the grant would be only sixty per cent of Commonwealth responsibility for public hospital nine months' revenue at this rate. operations and, with the exception of social security No deduction of revenue capacity was made in the pensioners with PHB entitlements and people in case of communny health and school dental programs. 7 and their component of the health grant was stmply The application of the Commonwealth formula to escalated by the factors already described Victoria is shown in Table 1. Table 1: Health Grant - Victoria 1981/82 1982/83 (Estimated) $M $M Estimated cost sharing grants for 1980/81 336.5 336.5 Plus escalation allowance - 1981/82 on 1980/81 (1 0 per cent) 33.6 1982/83 on 1980/81 Basic Health Grant 370.1 407.2 Less assessed additional revenue-raising capacity from specified charges - 44.2 106.6 Health Grant 325.9 300.6 After 1982/83, heatth grants are to be escalated by the sharing arrangements, even taking into account the same factors as apply to the States' tax sharing grants additional revenue capacity. that is, the rate of growth in total tax revenue - and The extent to which the Commonweatth has divested the Commonwealth Government has signified its itself of financial responsibility for cost shared systems in intention after 1984/85 of absorbing the health grants Victoria is shown in Table 2, in which the 1982/83 into the general tax sharing grants. The low rate of figures are based on the charges introduced in escalation and the deduction of the full amount of September 1981 . On these figures, the Commonwealth assessed increased revenue means that Victoria's would have reduced its contribution over two years from health grant has been stepped down in 1982/83 to a fifty per cent to thirty-six per cent of the net costs of base level which is far below the amount of $420 million these services and from forty per cent to twenty-seven which would have been forthcoming under the tax per cent of their gross operating costs. Table 2: Funding of Victorian Public Hospital, Community Health and School Dental Services, 1980/81 to 1982/83 1980/81 1981/82 1982/83 Actual Estimate $M $M $M Gross operating costs 845 965 1105 Revenue 171 236 265 Net operating costs 674 729 840 Commonwealth grants 337 326 301 State share 337 403 539 8 Implementation of the new funding arrangements has more than thirty-five per cent overall, with the daily fee in subjected the Commission and public hospitals to many multi-bed accommodation in public hospitals rising from pressures. In addition, it has for the first time since $80 to $110 (an increase of 37.5 per cent) and other fees August 1975 exposed large numbers of Victorian increasing by slightly smaller percentages. These residents to financial risk as the result of receiving increases were expected to increase revenue by about services in public hospitals. $30 million dollars in 1982/83 and to reduce the contribution from State revenue correspondingly. One effect of the change on the Commission has been intensification of the necessity to hold back the costs of Secondly, the government announced its intention of hospital services. For some years under cost sharing, increasing hospital fees every six months in line with the Commission has been endeavouring to maintain a movements in average weekly earnings. policy of no real growth in resources employed in public Thirdly, it recognised that the financial impact of the new hospitals, although limitations of data about real system was intensified by the fact that actual increases resource levels and cost movements left the actual in revenue were well short of the amounts assessed by state of affairs open to some degree of interpretation.