JOHN MENADUE. Hospitals should be the last resort, not the first resort.

Politicians, the media and the public focus on iconic hospitals rather than health.  We have too many hospitals and too many hospital beds.  We need to focus health improvement not in hospitals, but in primary care in the community – general practice, community clinics and at home.  The expensive and wasteful hospital frenzy must end. 

In the NSW election campaign at present, there is competition between the parties to announce more and more hospitals and hospital funding.  The Coalition has spent $8billion on hospitals over the last eight years – Liverpool, Campbelltown, Westmead, Bega, Northern Beaches, Wagga Wagga, Parkes, Tamworth and Forbes, with more to come at Rouse Hill. And the ALP is offering an even bigger spend on hospitals.

I chaired a Generational Health Review in South Australia in 2003.  We advised the state government that its health service should become ‘primary health care focused’.  We said:

“There must be a reorientation of the health system to enhance the focus on primary care. … Consumers know that prevention must be the first step. A strong primary care sector will enable consumers to be treated in their homes or as close to their homes as possible.

“Primary care tends to be neglected in terms of funding and recognition.  Hospitals, while requiring more substantial involvement, are also more interesting and ‘saleable’.  High technology medical equipment used in micro-surgery and transplants tends to be found in hospitals and is newsworthy. The prevention of heart attacks, lung cancer or the prevention of public health outbreaks, such as food poisoning, cannot be seen and tend to attract less attention even though the entire community benefits from such activity.

Primary healthcare services and hospital avoidance programs also provide the potential to alleviate pressure on the hospital system.  However, if budgets remain tied up with the provision of hospital care, it will not be possible to implement primary health care changes.

“The Generational Health Review believes the public will respond very favourably to a government-initiated system reorientation that will strengthen primary care, preventative care and public health.”

So what did the SA government do?  It embarked on a $2.4 billion splurge on a new Royal Adelaide Hospital. It got it all wrong. The health system in SA would have been much, much better served if at least half of this money had been spent in developing primary healthcare clinics across the state – perhaps 100 such clinics that included general practitioners, nurses, dentists, pharmacists, mental health experts, drug and alcohol advisers, and essential services provided by a range of multi-disciplinary experts.  Such care in the community would have been much better and cheaper.

Amongst many OECD countries, we have more hospital beds than countries that have as good or better health services than we do.  Hospital beds per 1,000 of population in 2014 were as follows: Australia 3.79; Sweden 2.54; Denmark 2.69; United Kingdom 2.73; New Zealand 2.75; Canada 2.67.

By coincidence, during the NSW state election campaign with the building frenzy for more hospitals, the CEO of Healthcare Denmark addressed the pre-occupation with hospital  at the Australian Financial Review Healthcare Summit.  “About 15 years ago, we realised the solution to these problems is not more hospitals but to think about how we can deliver healthcare in a different way”, says Hans Erik Henriksen, CEO of Healthcare Denmark:

“We aim to deliver as many services as possible through primary healthcare, municipalities, health centres and outpatient clinics and as little healthcare as possible from our hospitals.

“The future role of the hospital is thought of as the place you go to when you finally need highly specialised healthcare services. The philosophy is to handle all other kinds of problems through primary care and add to the stronghold of the GP, municipalities and clinics.

“In Denmark the GP is the gatekeeper of healthcare, concluding nine out of 10 issues that arise.

“The rationale behind the restructuring of the hospital system is based on quality and productivity. We have learned that if you have hospitals that open the door for any patient and say ‘come in, let’s see what we can do with you’, you will receive patients for whom the hospital may not have the necessary experience.”

Denmark has become a world leader in healthcare because, long before others, it realised the existing model was broken. While other countries have been responding to growing demand by building more hospitals along traditional lines, the Danes have been reducing them. In 1999, Denmark had 98 hospitals. Today it has 32. …

In this blog, John Dwyer has also drawn attention time and time again to the importance of developing healthcare services in the community and so relieve the pressure on hospitals.  He said on 11 February 2019:

“We have a tsunami of Australians developing  avoidable problems with many suffering from more than one problem (obesity, diabetes, arthritis, chronic lung disease, high blood pressure etc.). As a result of the vast number of people so suffering, about 75% of public hospital beds are occupied by these medical patients many of whom have repeated admissions. This in turn has progressively resulted in public hospitals having difficulty providing timely and reliable  access to surgical services. Presentations to emergency departments (mainly medical cases) increase annually by about 8%. Too often planned surgery is cancelled as  surgical beds are lost to overnight medical admissions. Frustratingly more than 650,000 of these admissions each year could have been avoided had a timely medical intervention occurred in a community setting. Fear that the public hospital system may not be available for surgical help when needed sees many older Australians buying private health insurance (PHI) they must struggle to afford.

“Public hospitals, the responsibility of State governments in our health system, have no levers to pull to stem the tide of admissions into their hospitals. Primary care (mainly offered by our ‘GPs’) is funded by the Commonwealth government. This is the arena where reforms could reduce the need for much hospitalisation. Reform reviews have consistently told governments that we are uniquely disadvantaged by the lack of seamless integration of our health care management. This jurisdictional divide must not be allowed to stay in the ‘too hard’ basket.”

If we are going to start putting our health system into better shape and to focus on primary care, we must address the fundamental problem which gives rise to current difficulties.  The fundamental problem is that the Commonwealth government largely funds primary care, while State governments partially fund, but operate, hospitals. Hospital and non- hospital care is not integrated.

I have written in this blog on many occasions about the need for a joint Commonwealth/ State Health Commission in any state that will cooperate.  The political obstacles are enormous and perhaps a more realistic path might be to establish pilot projects in a couple of area health services.  In that area, the Commonwealth and state governments would pool their funding, plan health services within the area and deliver health services through existing providers.  Governance and dispute-resolution arrangements would be necessary.

Unless the Commonwealth and state governments can cooperate seriously in this area, the hospital frenzy and focus will continue.  That frenzy needs to stop. The funds spent in hospitals would be much better spent in primary care.

Unfortunately, state ministers love to have their names on plates at the opening of new hospitals.  That’s why they blew $2.4 billion on the Royal Adelaide Hospital.

We need to build primary care. It provides better and cheaper care. It will take the pressure off hospitals.  This is what the Danes have found .


John Laurence Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

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4 Responses to JOHN MENADUE. Hospitals should be the last resort, not the first resort.

  1. John Hamilton says:

    Yes hospital numbers and beds are not the issue! If Australia was to re-harness the capital made off sports betting, lotto’s and all soft betting by purchasing Tatts and TAB back into government hands; we could then afford more SMART health in the ways of research and attach issues like Denmark. While we keep having political parties and so-called intellectual beaurecrats fighting over ways to finance and who is right, the Australian public will keep suffering from inadequate treatments and insufficient funds for the healing of diseases. With the advent of DNA growth of body parts, Stem cell treatment and cell regeneration; we need funding to eliminate repeat care.

  2. Rosemary O'Grady says:

    We should all Know this. Because, inevitably, we have to ‘pressure’ our Representatives into performing ‘good governance’ on our behalf. The notion that we elect & pay them well (they have all begun to refer to their political careers as ‘serving the public’ as if they weren’t in receipt of generous emoluments) – is a dream from the past; unless we press- nothing gets done. It’s a fundamental violation of consumer law – we can’t trust in their just getting-on with the job.

  3. Rex Williams says:

    From John Menadue today…

    “Hospital beds per 1,000 of population in 2014 were as follows: Australia 3.79; Sweden 2.54; Denmark 2.69; United Kingdom 2.73; New Zealand 2.75; Canada 2.67.”

    The one factor controlling all the great expansions into hospitals and even more hospitals, is the all-powerful medical union, the AMA.
    Seldom, if ever challenged as to fees, procedures, unquestionably always supported by governments of all colours and always with the philosophy that the more their influence is expanded, the more the services that are provided are controlled by them, the more they can exert their influence on our political representatives to their mercenary advantage.
    The uncontested rise in the GP fee structures are living proof that they wield more power than they should.
    Added to that we can see the recent trend to the corporatization of ‘family practices’, now seen and operated as business structures and not medical providers as we used to know them. In the door and out in 10-12 minutes, more than often with a referral for yet another AMA member who will then derive some serious financial benefit as well, courtesy of one of their associates.
    They are very skillful at that.

    They favour an even further expansion of infrastructure such as hospitals, everywhere, to secure their long term futures, the continued and expanded role for their medical union members and a total level of power and control over what once was a profession, but now a medical industry….. and all that means.
    While they are allowed to expand their position in this country, so this will continue. While we continue to allow a practitioner’s group like the AMA to decide on medical infrastructure and costings and professional health management, it will continue to expand out of all proportion to our needs.
    Hence the target of more hospitals as we are seeing with the current banner-waving political candidates, all showing little consideration for some of the alternatives used so successfully overseas in countries that are progressive and who have been so for decades. They are controlled in the main not by medical practitioners with a clear vested interest in their own welfare but professional management bodies accountable to the people’s needs and to a country’s budget.

    Certainly nothing even close out here, anywhere. Progressive? No.
    Just more of the same.

  4. roma guerin says:

    All makes eminent sense to me. In my small country town, we have 3 GP practices and a newish hospital. The hospital was a kneejerk and populist decision by the govt of the day who needed to be seen to be doing something after Black Saturday. Our GPs are all practising primary care really well. The underused hospital has had a few managers and CEOs in a short time, and ructions galore. Possibly because they have nothing to do.

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