27/06/2012 - 11:19

‘Saving’ RPH a costly exercise

27/06/2012 - 11:19

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Downgrading long-established metropolitan hospitals carries significant political risk.

‘Saving’ RPH a costly exercise

Downgrading long-established metropolitan hospitals carries significant political risk.

HEALTH Minister Kim Hames sounded full of remorse when questioned over the government’s decision to dump the election promise to build a new west wing for the ageing Royal Perth Hospital. But the bean counters at the Department of Treasury and Finance were silently relieved.

“I would have liked to build the west wing and you know that we committed to doing that and I’ve had to go back on that,” Dr Hames told a recent budget estimates hearing.

What he didn’t say was that the promise to ‘save’ the hospital, which was displayed prominently by the Liberal Party at polling booths for the Perth and Mt Lawley electorates at the last state election, had served its purpose. Labor retained Perth but former deputy lord mayor Michael Sutherland won the new marginal Mt Lawley seat for the Liberals.  

The inference from the message was that RPH was doomed under Labor, which wasn’t quite right but there was enough doubt in voters’ minds for Mr Sutherland to squeak home, giving the Liberals an extra seat in the tightest election finish in living memory. 

Doubts over the future of RPH had swirled around ever since the previous Labor government committed to building the $2 billion Fiona Stanley tertiary hospital at Murdoch.

The new southern hospital had been recommended in the 2004 report of the health reform committee headed by Michael Reid, called ‘A Healthy Future for Western Australians’. 

The report had been commissioned by then health minister Jim McGinty to provide a blueprint for the future structure of the public health system, which had developed on an ad hoc basis and was costing a fortune.

It recommended there be one tertiary hospital south of the river (Fiona Stanley) and another north of the river. The suggestion was that services at RPH and Sir Charles Gairdner hospitals be consolidated on the Gairdner hospital site, and that RPH become home to an ‘inner-city see-and-treat centre’.

The reason for the consolidation, which would also lead to Fremantle Hospital being scaled back, was that operating such hospitals was extraordinarily expensive, given the quantity of equipment and staff they required. Something had to give. Consolidation was the answer.

“The growth in health expenditure over recent years has averaged around 8.8 per cent per annum, compared to a growth of around 5 per cent for all other state government agencies,” the report said. “This is unsustainable.”

So the message was clear; control the number of (expensive) tertiary hospital beds, and increase the bed count in the more economical smaller general hospitals located at key points around the sprawling metropolitan area.

There are obvious political risks associated with downgrading long-established metropolitan hospitals. It had already been attempted in Sydney in the early 1980s with only limited success. The NSW Labor government under Neville Wran, at the height of his popularity, had aimed to close the historic – and antiquated – Sydney Hospital in Macquarie Street, as part of a policy of shifting hospital beds into the suburbs where the people actually lived.

The rationale was that the major hospitals had been established when the population was much smaller, and the hospital services had failed to move as the city expanded. All that would change and patients would be the winners. 

Think again.

A youthful Labor health minister, Laurie Brereton, was given the job of negotiating this major change. But it proved too much for him and a popular government. The removal of such a health facility as Sydney Hospital, and several other dilapidated structures in difficult-to-get-to locations with virtually no parking for the public was considered by the usual medical pressure groups to be beyond the pale. So not a great deal was achieved for the people in the suburbs.

And so it proved to be in Perth. Not that all the blame/credit should go to the Liberals. Labor failed to promote clearly to voters what its plans were for RPH, and what safeguards there would be for city workers in the event of some health-threatening calamity in the CBD.   

Eight years after the Reid report, how much progress has been made on reining in spending in the WA health system? This is an excerpt from (former) treasurer Christian Porter’s budget speech:

“Since coming to office the Liberal-National government has increased the health recurrent budget by 39.3 per cent and its capital budget by a staggering 226 per cent. WA has Australia’s largest per capita spend on essential health infrastructure, around five times that of New South Wales and Victoria.”

The spending on new hospitals is commendable. But RPH will continue as a tertiary hospital after Fiona Stanley opens in 2014, despite losing more than 200 beds and some services to the southern hospital. 

And according to budget paper number 2, not only will $22 million be spent on RPH over two years for “refurbishment and redevelopment”; a further $180 million will be required for the “second stage” of the refurbishment, but only after a detailed planning and business case has been developed.

So the hospital that had been earmarked for a significant downgrade as part of a new streamlined health system is likely to absorb about $200 million for capital works alone so that it can continue as a money-guzzling tertiary institution. 

Then there are the salaries for the extra administrative and nursing staff such an institution requires –  year in, year out.

 But questions remain. 

Almost four years after the Barnett government’s election, voters continue to be in the dark as to what actually will happen at the RPH site. Will the newest section of the hospital, the north block, be retained, redeveloped, or sold off? A proud Brian Burke showed of the near-completed block to Bob Hawke during the 1987 federal election campaign as proof of Labor’s commitment to improved health facilities. The two leaders led the media a merry dance through dark corridors and dangling wires in what was still a building site – and probable safety risk.

Obviously with a reduction in the number of beds, and fewer services, the hospital will require less space. But which buildings will be retained and which will be discarded (or demolished) is still a mystery.  

What will be done about the traffic-pedestrian shambles at the Cathedral Square main entrance?

A report prepared for Dr Hames last year on the future configuration of the site remains under wraps. 

And that is what concerns the boffins at the Department of Treasury and Finance. 

The responsibility falls to them to ensure that the spending decisions, including those made for the most naked political motives, are accommodated in a responsible financial package. Not that they have publicly voiced their thoughts on such a challenge. The expressions on their faces when asked about the issue were enough to tell the story.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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