❓ Mr Cook questions the discrepancy between the low increase in the Health budget and the higher Health CPI. The answer clarifies the budget increase, citing one-off expenditures and using Perth-specific CPI data to justify the allocation.
AnsweredQoN 4563Legislative Assembly
QuestionView source ↗
I note that the total cost of services in the Health budget is increasing by just 1.28% between 2014/15 and 2015/16 and yet Treasury estimates that the Health CPI is at 4.6% in the 12 months to March 2015 and ask: (a) why is there such a modest increase in the budget given these cost pressures (2012/13 to 2013/14 6.13% actual CPI, 2013/14-2014/15 8.8% actual to est actual, 2014/15-2015/16 1.28% est actual to budget - projected increase is 5%, 1.3% and 5.5% in forward estimates); and (b) given the total cost of services in the Health budget is actually below the official rate of CPI, how does the Department intend to achieve this target without reducing funding to existing services, cutting services or restricting access to some services?
AnswerView source ↗
Answered
20 October 2015
Responded by
Minister for Health
Response time
34 days
(a-b) The figure of 1.28 per cent represents the
'headline'
growth in Health expenditure from 2014-15 to 2015-16. This includes the impact of material one-off expenditures in 2014-15 that are not incurred in 2015-16. These one‑off expenditure items are largely related to the reconfiguration within the South Metropolitan Health Service and commissioning of the Fiona Stanley Hospital, the 2014-15 Targeted Separation Scheme payments and other accounting and cash flow adjustments. When these 2014-15 one-off expenditures are removed, the
'underlying'
growth in Health expenditure from 2014-15 to 2015‑16 is 3.8 per cent. Within the total Health budget, provision for the delivery of public hospital services increased by 4.6 per cent from 2014-15 to 2015-16
[1]
.
While the Health CPI for all eight capital cities for the 12 months to March 2015 was 4.6 per cent, the Health CPI for Perth for the corresponding period was 3.7 per cent
[2]
. The Health CPI is an index designed to measure the cost of healthcare to the consumer. It covers a broad range of health costs, extending beyond the range of services offered by WA Health. The Health CPI incorporates any subsidies, taxes and other price elements which do not comprise part of the cost of delivering the service. Examples of items included in the Health CPI are health insurance, ambulance insurance, dental fees, GP and specialist fees, as well as the prices of medicines, appliances, and other health-related items such as sunscreen. Consequently the Health CPI does not accurately reflect the increase in the cost of providing services in the public health system.
[1]
Budget Paper No. 2, Vol 1. Division 9, Part 3. "Significant Issues Impacting the Agency" page 125.
[2]
Department of Treasury,
Western Australian Economic Notes
http://www.treasury.wa.gov.au/uploadedFiles/_Treasury/Economic_Data/cpi_march2015.pdf
'headline'
growth in Health expenditure from 2014-15 to 2015-16. This includes the impact of material one-off expenditures in 2014-15 that are not incurred in 2015-16. These one‑off expenditure items are largely related to the reconfiguration within the South Metropolitan Health Service and commissioning of the Fiona Stanley Hospital, the 2014-15 Targeted Separation Scheme payments and other accounting and cash flow adjustments. When these 2014-15 one-off expenditures are removed, the
'underlying'
growth in Health expenditure from 2014-15 to 2015‑16 is 3.8 per cent. Within the total Health budget, provision for the delivery of public hospital services increased by 4.6 per cent from 2014-15 to 2015-16
[1]
.
While the Health CPI for all eight capital cities for the 12 months to March 2015 was 4.6 per cent, the Health CPI for Perth for the corresponding period was 3.7 per cent
[2]
. The Health CPI is an index designed to measure the cost of healthcare to the consumer. It covers a broad range of health costs, extending beyond the range of services offered by WA Health. The Health CPI incorporates any subsidies, taxes and other price elements which do not comprise part of the cost of delivering the service. Examples of items included in the Health CPI are health insurance, ambulance insurance, dental fees, GP and specialist fees, as well as the prices of medicines, appliances, and other health-related items such as sunscreen. Consequently the Health CPI does not accurately reflect the increase in the cost of providing services in the public health system.
[1]
Budget Paper No. 2, Vol 1. Division 9, Part 3. "Significant Issues Impacting the Agency" page 125.
[2]
Department of Treasury,
Western Australian Economic Notes
http://www.treasury.wa.gov.au/uploadedFiles/_Treasury/Economic_Data/cpi_march2015.pdf
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