Image description: A long shot of the Perth Children’s Hospital, and three one-hundred-dollar Australian bills digitally superimposed in the left-hand corner.


By Millie Muroi


In 2016, WA was labelled “the worst in the country for hospital beds”. According to our Health Department, the number of aged care beds per 1000 people is still lagging at 6.06 – below the national average of 8.12 as of 2019.


With new COVID-19 cases emerging at a remarkable rate, the case for greater government spending in health – both on state and national levels – has renewed vigour.


Concerning context


Tony Bartone, the Federal AMA President, last year stated that on a national level, “our public hospitals (are) chronically underfunded”. Despite an increasing number of public hospital beds, a similarly expanding – and aging – population have offset this growth.


As of the 17th of March, the number of overnight beds in the Perth metropolitan area (including those unavailable for use) was 2858. Given the metropolitan population, this indicates approximately 1.38 hospital beds per 1000 people – lower than the 2.5 national average given by the Public Hospital Report Card 2019.


Capital requirements of treating COVID-19


Currently, modelling by the Imperial College suggests that around 4.4% of COVID-19 cases will require hospitalisations, with the proportion increasing to 10.2% and 27.3% for those in the 50-59 and 80+ age brackets respectively. Further, of these hospitalisations, around 30% are estimated to require intensive care.


People over the age of 50 constitute 32% of the population in Perth, with the proportion growing in recent years, making the need to prepare for an increasing number of hospitalisations particularly pertinent. Whilst the ratio of hospital beds to population is not a perfect proxy for the preparedness of our health system, it is a clear enough indication of the deficits we are likely to face.


Whilst labour shortages – especially in highly-specialised professions such as medicine – are difficult to combat quickly, investments to mitigate the strain on capital assets are integral. Ensuring hospitals are well-endowed, and prepared for an influx of patients, means that the spread of infection (as well as mortality) will be dampened. Hedging against shortages in equipment will also provide healthcare professionals with greater protection against contracting the virus themselves. Whilst supply chain disruptions have undoubtedly depressed production capacity for healthcare manufacturing firms, greater government financial support for the sector is needed, and has been long overdue.


Sufficiency of current responses


The federal government recently announced a $2.4 billion injection into the health sector, but it may be too little, too late. Summed with the initially-allocated $81.8 billion funding in the 2019-2020 budget, it still falls significantly short of the AMA’s 2020-2021 Pre-Budget Submission recommendations. The WA government is focusing on providing more testing kits, and is slightly propped on a 2% increase from the previous budget in terms of the proportion of expenditure allocated to health.


Economically speaking, the Morrison Government has announced a $17.6 billion stimulus package aimed at supporting business investment and sectors, regions, and communities which have been significantly affected.


From social distancing, to travel bans and restrictions on large gatherings, the Australian government has also progressively – and rightly – implemented measures to ‘flatten the curve’ of infections. The Economist has pointed out that in Britain, similar measures are nonetheless expected to see demand for hospital beds outnumbering supply by a factor of eight. A full-scale lockdown – as seen in Italy and France – on the other hand, would see this factor revised down to two, ostensibly implying that Australia should follow suit. However, even a widespread closure of schools paired with stringent restrictions on venturing out except when absolutely necessary has future costs. A lockdown cannot last for long, and as soon as the rules are lifted, infection rates are likely to skyrocket in a second wave to those who dodged the virus the first time.


So, what should governments do?


Given the high transmissibility of COVID-19, holes in government interventions, and lack of a viable vaccine in the near future, it is highly likely that the virus will continue to spread (and peak) in Australia. Though measures such as social distancing, testing, and closing of universities and schools can buy us time, it is integral for governments to increase spending on healthcare so that when the time does come, our hospitals are prepared to treat a large number of patients.


Inevitably this will entail costs: our brief cosying-up to a budget surplus is all but history, and we will have to dig deeper into debt. Given Australia’s relatively healthy public debt record, however, such an investment would be justified.


The Victorian state government recently announced a $437 million boost in hospital funding, and the WA government should follow. Australia is one of the top-ranking countries in terms of healthcare, but there is continual need for improvement. In the AMA’s Pre-Budget Submission 2020-2021, Bartone called on the Australian Government to “do the right thing…and dramatically lift spending on health”. COVID-19 is perhaps a much-needed wake-up call to do so.


Image courtesy of Wikimedia Commons and RBA

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