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Issue #1910      April 6, 2020


Should hospital workers be penalised because of the hospital financial crisis?

This question has been posed because of a repudiation by the New South Wales Hospitals Commission of an agreement with the Hospital Employees Association to increase wage margins by thirty per cent.

The Hospitals Commission says hospitals are broke – and that is undoubtedly true.

But why are they broke?

Must hospital workers head the same way?

Tribune sought answers to these questions from Jim North , Secretary of the NSW Hospital Employees’ Association.

“Hospital boards of directors, the Hospitals Commission of NSW (and through this body, the NSW Government) still have the wrong slant on solving the serious financial crisis facing hospitals throughout the Commonwealth today,” Mr North said.

“This crisis will not be solved by keeping hospital employees’ wages down to an abnormally low level. On the contrary, low wage-levels mean that many people (including technicians) have to seek work in other callings that pay a decent living wage,” he continued.

“In attempts to solve the financial plight of hospitals, it seems that all kinds of so-called solutions are to be tried, except the right one – the supply of sufficient money by the Commonwealth Government.

“In 1952, the Page scheme of insurance for hospital treatment was hailed as a solution to the hospitals’ financial problem. The Page scheme was in reality a confidence trick designed to make the people pay, one way or the other, for their hospital treatment while the Menzies Government used for-war-like purposes, a large portion of the money that the Australian public paid for social service contribution tax.

“The Menzies Government deliberately scrambled together social service contribution tax and income tax so that the full extent of their villainy, in this regard, could not be accurately assessed.

“Incidentally, it is calculated that if the same proportions of social service contribution tax, payroll tax, and income tax applied in 1956 as applied in 1949 – which was the last year in which these two taxes were not scrambled – then the Commonwealth Government collected £30,000,000 ($962,717,770.03*) more from social service contribution tax and payroll tax than it spent on the whole of social services for 1956 alone.

“It was inevitable that the Page schemes would not succeed. If any doubts remain on this score such doubts should be removed by the unanimous declaration by the conference of Health Ministers held in January, that the schemes were a failure.

“This conference included Ministers from non-Labor as well as Labor governments.

“Increased patients’ fees have not improved the situation but rather worsened it. Money derived from patients’ fees has increased 400 per cent between 1950 and 1956, but the financial crisis has deepened, taking a sharp turn for the worse at the end of 1955 when hospital fees increased by fifty per cent.

“Increasing the number of intermediate and private beds at the expense of public beds, although tried, has proved no solution either.

Observations by our officers throughout the state show there are many intermediate and private beds vacant, but the waiting lists for treatment in public beds grow no less.

“There remains only one immediate solution, and it was obvious all along; it is the substantial increase of the Commonwealth subsidy direct to hospitals; this to be henceforth related to hospital costs.

“This also was a unanimous decision of the conference of Health Ministers.

“It clearly placed the onus on the Commonwealth Government to make a statement about its intentions. So far that Government has said nothing, but persistent rumours from Canberra are that the Government will increase the amount paid to insurance societies for insured patients, thus giving an insured patient a greater subsidy.

“No doubt insurance societies will be expected to increase their “benefits” to meet the increased fees. This, of course, will also mean increased contributions by the insured.

“If this is true, then it also appears that the Commonwealth Minister for Health (a doctor, as was his predecessor) is setting out to implement the British Medical Association policy of classification of patients.

“IN. a nutshell the BMA scheme is:

“1. Patients who qualify by the means test as public ward patients, but who are insured, are automatically classed as intermediate patients.

“2. Patients who do not qualify by the means test as public ward patients automatically become classified as private patients.

“3. Only patients who qualify by the means test as public ward patients (and who can prove that they are financially unable to afford to belong to an insurance society) will be allowed to remain as public patients.

“The basic idea of this scheme is to enable doctors to charge patients in hospital. It can be seen that it achieves this very cunningly; the great majority of patients are to be put into intermediate and private beds where the doctor is allowed to charge.”

“At the same time, it is an inducement to unthinking hospital administrators and the Hospitals Commission because it puts most patients into the higher paying bracket. The accent of the scheme is on insurance.

“The scheme will only seriously worsen the situation, and incidentally the prospect of my members for a decent wage. The Commonwealth Government must be prevented from implementing such a scheme.

“I repeat, the only immediate answer is for the Commonwealth Government to substantially increase the subsidy direct to hospitals, not to insurance societies, and for this subsidy to be related to hospital costs.

“I believe that the labour movement, and in particular, the trade union movement, should fight vigorously for increased subsidy to hospitals.

“Ultimately, there must be a demand for a return to free hospitalisation financed by the special tax that every wage earner already pays. The money contributed is more than sufficient and free hospitalisation is our right.”

This article originally appeared in Tribune April, 1957.


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