On January 29 this year, NSW health minister John Della Bosca admitted his department owed $117 million in unpaid bills, but argued this was only a "small proportion" of the budget.
He denied that the health department was in a liquidity crisis but added that NSW Premier Nathan Rees would ask Prime Minister Kevin Rudd for a funding injection of$2.5 billion.
However, a year ago the NSW government commissioned a Special Commission of Inquiry into the public healthcare system. The inquiry was conducted by Peter Garling SC and released on November 2008. It claimed NSW health is "on the brink" of a crisis. It attributes the crisis to demographic changes, increases in treatment costs, and a shortage of clinicians.
Garling received many confidential submissions that drew attention to "the large number of reports which had been obtained in the last 10-15 years about health issues which had made recommendations which have never been acted upon <193> [and a] a complete lack of trust that the government and/or NSW Health will, notwithstanding my report, actually carry out any change".
He concluded these submissions "reveal a deep seated and wide-spread malaise".
There is both a shortage of money and a failure to respond to past predictions of healthcare demand effectively.
AMA president, Dr Rosanna Capolingua, said in a November 12 press release that "hospital bed capacity has been slashed by 67 percent in the past 20 years".
Capolingua also said that the shortfall across Australia of 3750 public hospital beds needed "an immediate $3 billion injection <197> an injection which will return the federal contribution to a 50/50 funding split with the states".
According to the AAP on January 29, Doctors Reform Society vice president Con Costa questioned how the Australian government can find public money to prop up ailing companies, yet allows the underfunding of the public hospital system <197> a system millions rely for their health care.
However, NSW Health has also faced criticism for how it distributes available funds. Rural doctors came to the city to draw a human "line in the sand" at Bondi last November in protest at what they said is the "appalling treatment of rural health by NSW government".
Up to 1450 premature deaths occur annually in rural NSW, according to the Rural Doctors Association <197> more than triple the state road toll.
Garling claims that a contributing factor to the crisis is the rapid increase in the numbers of people aged over 65 in public hospitals.
Older people generally stay longer in hospital, and are often regarded by health bureaucrats as "bed blockers". But these facts and developments have been known and predicted for years. Another factor Garling points out is the chronic shortage of nurses and doctors employed.
The restructure of the Area Health Services in 2005 was supposed to produce efficiency savings that would be spent on the "front line". Garling reports that this simply didn't happen. What happened instead was that jobs were cut and less money was spent. NSW Health claims mostly administrative jobs were cut. This doesn't accord with clinicians' observations.
An example Garling raised that illustrates this point is that NSW has seven times more hospital-acquired MRSA infection rates than Western Australia. He attributes this to lack of patient screening and poor hygiene by clinicians.
Since 2003, hospital cleaning staff have been cut by some 11%. By contrast, "Hospital support officers" <197> ie. project officers, planners and ward clerks <197> have increased by 11.8% over the same period.
In essence, the symptoms are visible in the hospital, but the causes lie elsewhere.
One of the more hidden causes of the hospital crisis lies in the loss of budgetary control by hospitals and wards. Budget decisions now fall prey to a remote bureaucracy characterised by what Garling describes as centralised and immature management practices.
A major part of the solution is a move back towards a fully funded public health system based on health promotion, disease prevention and the timely treatment of illnesses.
[Trench Nightgale holds a PhD in community health science, and works as an enrolled nurse in an assessment unit for older people with mental health problems.]