The South Australian Government have cut millions from the health budget, defunded critical services like Shine SA. Now, the government is quietly planning to privatise the public health system beginning with essential health services such as pathology.
SA Government and SA Pathology
The 2018-19 State Budget announcement put public health services on notice to deliver savings costs or face privatisation. SA Pathology is firmly in the government’s view.
Page 78 of the State Budget Measures Statement reads:
“Previous external reviews analysing the efficiency of public pathology services suggested that South Australia delivers services at significantly higher cost than similar services interstate and in the private sector. The level of inefficiency has previously been estimated at more than $40 million per year.
Pathology services are a contributing factor to the South Australian health network operating above the national efficient price in the delivery of public health services. Efficiencies will therefore be pursued in SA Pathology, with the intent of delivering a service consistent with interstate peers.
With the implementation of local health network boards from 2019–20, the public pathology service will be accountable for its performance. “Should efficiencies not be achieved, it will be open to those boards to procure services from alternative providers.”
A PwC report (pg. 9) into the commercial competitiveness of SA Pathology recommended:
- A clear, realistic and resourced plan to deliver the bold changes needed and realise the identified efficiencies.
- SA Pathology should develop a robust approach to improve its financial, commercial and managerial capability
- Continue to develop the financial and operational baseline to support improved understanding and long-term sustainability.
- Undertake work to strengthen existing commercial approaches
- A government review of SA Pathology’s progress regarding planned improvement opportunities and SA Pathology’s new operating model.
There is a strong sense amongst our members that forecast job cuts, centre closures and privatisation are inevitable.
Where is SA Pathology now?
The government has given SA Pathology at least a year to meet its expected savings targets.
“We are giving SA Pathology the opportunity to make fundamental changes to address their operating deficit,” said Minister for Health and Wellbeing, Stephen Wade.
SA Pathology will save $2.3 million at the end of the 2019-20 financial year. This is well short of the government’s target of $25 million. In 2020-21 and 2021-22, the government expects $35 million and $45 million (respectively) in savings.
In a media release, Minister for Health and Wellbeing, Stephen Wade pointed that SA Pathology has more staff than required and needed improvements to its operating model to ensure it is sustainable long-term.
“At this stage, a high-level analysis of PwC’s report over three years estimates an optimal SA Pathology workforce would reduce to around 1,200 from its current workforce of 1,400,” said Mr Wade.
These jobs would cease to exist over a three-year period with ten non-profitable centres (out of 90) to close. Five new centres are expected to open.
Privatisation and health services
Privatisation of health services is not new to Australia. As far back as 2013, development of new hospitals was placed under private arrangements.
Writing for The Conversation, Stephen Duckett, Director Health Program, Grattan Insititute noted the risks of public-private arrangements in hospitals. He wrote:
“Ostensibly, private management will drive efficiency more rigorously than public management because of the desire to generate profits, potentially leading to cost savings to the state government. This “transfers the risk” of aspects of system performance, including failure of management to achieve efficiency targets, from the public sector to private sector managers.”
What do our members say?
“Closing our sleep lab at the Royal Adelaide Hospital will blow out our wait lists and put lives at risk. Sleep labs are crucial to patients with serious health concerns, such as those who’ve suffered a stroke, and have a real risk of stopping breathing in their sleep. Experts have backed the sleep lab, yet the Government ignores them.”
Privatisation will lead to delays in diagnosis and treatment, poor health outcomes and more expensive testing. Ultimately, patients will stay sick for longer at a much greater cost.
The work of SA Pathology includes:
- The food and environment laboratory identify the toxins and its source and provides evidence for prosecution of companies that breach our state’s strict food and safety laws
- In the event of a suspected white powder incident, they can test the powder to determine if its anthrax
- In cases of illness or injury needing life-saving blood transfusions, they ensure patients receive the blood and platelets they need.
The Marshall Government are considering major changes to the SA public health system that could put the futures of health workers and medical scientists into jeopardy.
Health services need to be properly funded to attract and retain the quality medical workforce South Australians need and deserve.