MINISTER FOR HEALTH
OVERVIEW
Budget
2001-02
$m
Budget
2002-03
$m
Variation
%
Department of Health
Total Expenses ...................................................
Asset Acquisitions ...............................................
7,766.6
529.2*
8,344.0
504.0
7.4
- 4.8
Health Care Complaints Commission
Total Expenses ...................................................
Asset Acquisitions ...............................................
6.2
...
7.9
0.4
28.0
n.a.
8,351.9
504.4
7.5
- 4.7
Agency
Total, Minister for Health
Total Expenses ...................................................
Asset Acquisitions ...............................................
*
7,772.8
529.2 *
These figures include a $49 million one-off supplement to accelerate key projects in the Government Action Plan
for Health.
DEPARTMENT OF HEALTH
EXPENDITURE TRENDS AND RECENT DEVELOPMENTS
In March 2000, the Government announced that the recurrent health expenditure
in 2002-03 would be $8.1 billion. This commitment will be exceeded by over
$240 million. Recurrent health expenditure is expected to be more than
$575 million higher than the 2001-02 Budget, an increase of 7.4 percent.
The Department of Health, through its Health Service networks and other key
stakeholders, is responsible for providing the people of New South Wales with
better health and good health care.
The Department has overarching responsibility for implementing the
Government Action Plan for Health, which outlines the way forward for health
services by building on existing strengths and providing for significant
improvements in the quality and effectiveness of the State’s health system.
The 2002-03 Budget sees the achievement of the Government’s commitment to
the improvement of health services over a three-year period that has provided
guaranteed and enhanced levels of funding for health care.
Budget Estimates 2002-03
8-1
The provision of health care within the State’s health system is an evolving
process, directed to meeting the ongoing challenge of higher levels of activity
arising from a larger and ageing population base, geographically spread across the
State. Cost pressures also stem from the development and improvements to
treatments provided and a rising level of consumer expectations to access a
diverse range of health services closer to home.
New technologies and improved work practices are helping to cope with service
demands. The average length of stay in public hospitals has declined from
6.1 days in 1993-94 to a projected 5 days in 2001-02, an improvement of
18 percent over this period. The percentage of booked surgery performed on a
same day basis has steadily increased over the last five years, from 46 percent in
1995 to 55 percent in 2000-01. This is projected to increase to 57 percent in
2001-02 and to 60 percent in 2002-03. System reform, growth and enhancement
funding provided through the Budget over the last three years has also contributed
to meeting these service demands.
During 2001-02, the Government committed to an historic change in the provision
of medical indemnity cover for doctors working in New South Wales public
hospitals. From 1 January 2002, the Government provided coverage for all
Visiting Medical Officers (VMOs) who elect to be covered under the
Treasury Managed Fund scheme for all work they perform on public patients in
public hospitals in New South Wales.
STRATEGIC DIRECTIONS
The Government Action Plan for Health promotes best practice patient care within
an environment of greater certainty and stability for the State’s health system.
The Plan is being driven by a team of leading clinicians, managers and consumers
from across the State and is building on the strengths already present in the system
and is achieving concrete results in a wide range of areas:

8-2
NSW Health is a partner in the national development of the Electronic Health
Record (EHR) systems architecture. The New South Wales EHR strategy has
been published and detailed system design initiated. Implementation
planning has commenced for two pilot projects; that is, the Child Health
Information Network in Greater Western Sydney and the Chronic Disease
Management System in the Hunter.
Budget Estimates 2002-03

NSW Health participation in national initiatives for safety, quality, and the
management of blood and blood products, including implementation of the
regulation of fresh blood products by the therapeutic goods administration,
donor deferral relating to the mad cow disease outbreak in Great Britain, and
selective leukodepletion of blood and blood products where clinically
indicated.

The Nursing Re-connect strategy has been designed to attract nurses who are
not currently working in nursing back into the public health care system.
Specifically, this strategy is aimed at increasing the size of the nursing
workforce; reducing the number of positions actively being recruited; and
having a mid-to-long term impact on the use of overtime and agency staff.

The Nursing Scholarship Fund demonstrates the Government’s recognition of
the financial outlay required for nursing education and also the particular
challenges faced by nurses practising in rural and remote areas of the State.
A total of $1.1 million has been awarded to 449 nursing students for tertiary
study in 2002.

Over $20 million is provided annually on nursing workforce initiatives for a
range of educational initiatives including transitional support for new
graduates, Orientation Programs for Specialty Clinical Areas, Mental Health
Nursing grants, and a range of special initiative funding including mentor
programs, Graduate Certificate Courses and speciality short courses provided
by the NSW College of Nursing and Trainee Enrolled Nurse Education
through TAFE.

Housing for Health, an Aboriginal Environmental Health initiative, aims to
identify and address problems within a house that may affect the health of the
occupants. Housing for Health Projects have been completed in 600 houses
in 16 communities between 1997 and 2001. New projects have commenced
in eleven other communities and in the first stage of these projects a total of
3,000 jobs have already been completed by trades people in 320 homes.
Another ten Housing for Health projects are scheduled to commence
in 2002-03.
Budget Estimates 2002-03
8-3

NSW Health has commenced implementation of a framework for action,
comprising three main streams of new health improvement initiatives Healthier People, Healthier Places, and Reducing Health Inequalities:

under Healthier People, ongoing annual funding of $15 million has
improved health services for people with chronic diseases, the
development of a new framework for prevention of chronic diseases and
improvements in surveillance and reporting of the burden of chronic
diseases;

under Healthier Places, NSW Health implemented the Smoke-free
Environment Act 2000, banning smoking in most enclosed public places
including restaurants, cafes, shopping malls, community centres and the
dining areas of clubs and pubs from September 2001. Controls on the
point-of-sale advertising of tobacco products are being strongly enforced
and more extensive compliance monitoring of illegal sales to minors is
being undertaken; and

under Reducing Health Inequalities, achievements to date include the
development of a new and comprehensive statement on Equity and
Health, the development of three-year public health plans, and
implementation and further development of grants schemes covering
Safe Communities, Falls Prevention (Injury Prevention), Active Councils
(Promotion of Physical Activity), and Health Promotion Demonstration
Research.

Since 1999-2000, system reform and growth funding to NSW Health has
provided for an additional 21 intensive care unit (ICU) beds to become fully
operational throughout the health system. By 2002-03, this level will be
enhanced by a further 12 new ICU beds being commissioned at an initial cost
of $8.5 million. This additional intensive care bed capacity will be linked to
an integrated statewide network of intensive care services to ensure timely
treatment of patients in the appropriate setting.

NSW Health and emergency medicine clinicians have been working on short
and longer-term means of meeting the increased demands for emergency
departments. Additional annual funding of $10 million per annum has
improved discharge planning and bed management and provided additional
frontline resources for emergency departments. As a result, additional senior
medical positions, nursing positions and clinical support positions have been
created in emergency departments.
8-4
Budget Estimates 2002-03

New acute psychiatric beds were opened in 2001-02 in Campbelltown
(adolescents), Coffs Harbour, Taree and Tweed Valley. Additional acute
psychiatric beds are due for commissioning in Wollongong, Tamworth and
Newcastle (adolescents) in 2002-03. These new facilities will provide for the
treatment of an additional 2,000 patients each year.

A number of pilots of the HEALTHshare framework have been proposed.
The Hunter Area Health Service has proposed an approach that packages
together a range of integration models (a coordinated care trial, Maitland
After Hours GP service and the Transitional Care Unit) as a preliminary step
towards the share model. Next steps include the establishment of a joint
planning group representing key stakeholders in the region and the
identification of issues to be addressed under HEALTHshare.

NSW Telehealth services continue to expand, with 51 new sites across the
State (a total of 160 sites) and 29 new or expanded clinical services.
New funding models and arrangements introduced over the last two years under
the Government Action Plan for Health (Episode Funding, emergency
departments, intensive care units, capital charging and Budget Holding) will assist
in promoting ongoing value for money and the best practice delivery of quality
health care.
2002-03 BUDGET
Total Expenses
Budgeted total expenditure in 2002-03 is more than $8.3 billion and is provided
within the previously announced framework of budget certainty and growth
funding.
In 2002-03, new and ongoing initiatives include:

increased funding of $8.5 million for a range of medical and surgical services
conducted across the south western area of Sydney covering cardiology,
increased gynaecology surgery, enhanced immunology and AIDS/HIV
services, establishment of a new stroke unit at Campbelltown Hospital and
full year funding for providing neurosurgical, paediatric and ophthalmology
surgical services;

an additional $2.1 million to fund the operational costs of the twenty-five bed
mental health inpatient unit at Tweed Heads District Hospital and major
redevelopments at Tweed Heads and Murwillumbah Hospitals ($6.5 million);
Budget Estimates 2002-03
8-5

$3.5 million to improve the access and provision of aged care and
rehabilitation services on the mid-north coast;

$3 million to improve a range of paediatric care and clinical services provided
by the Children’s Hospital at Westmead, including nurse educators, speech
pathologists and dieticians to fight child obesity;

$500,000 to meet the increased demand for dialysis services in the Illawarra;
and

$1.5 million to meet increased demand for Emergency Department services
on the Central Coast.
Other major funding initiatives in 2002-03 include:

a major metropolitan planning initiative, led by clinicians, has resulted in
enhancements of some $60 million per annum being provided to meet a range
of specialist services, such as Severe Burns, Brain Injury and Spinal Cord
Injury. Services such as cardiac, bone marrow transplantation and stroke
units will be increased across the greater metropolitan area. Funding to
district metropolitan hospitals will also be boosted to provide a greater range
of health care services to their resident communities;

$8.5 million to fund the establishment of new Intensive Care Unit (ICU) beds
at Westmead (four), Wollongong and Royal Prince Alfred Hospitals
(two at each) and John Hunter, St George, Liverpool and Royal North Shore
hospitals (one each) as part of the state-wide Intensive Care Service Plan;

an additional $16 million for oral health services, exceeding the
Government’s April 2000 oral health commitment by $5 million. The extra
$5 million provides for an additional 4,000 denture services to older persons
across the State on an annual basis, increases the delivery of specialist oral
health services and provides new funding for Aboriginal oral health care;

$36 million allocated over five years as part of the Government’s initiative for
implementing BioFirst, the Government’s Biotechnology Strategy.
In 2002-03, a total of $7.4 million is being utilised by NSW Health to:
establish a St Vincent’s research and biotechnology precinct; develop the
Millennium Research Institute Hub at Westmead; enhance existing research
capabilities through the establishment of research clusters; provide seed
funding to promote the convergence between biotechnology (including
bioinformatics) with other technologies, with a particular focus on
information technology; and increase the State’s strengths and capabilities in
bioinformatics;
8-6
Budget Estimates 2002-03

an additional $2 million for podiatry services, providing an extra
40,000 podiatry occasions of service in the metropolitan area and 15,000 in
rural areas;

further funding for mental health services with the provision of an extra
226 beds. This is on top of the 150 beds announced in 2000. Annual funding
of $20 million will enable the implementation of service network
arrangements under the Government Action Plan for Health and the better
utilisation of existing and new facilities for the benefit of mental health
clients throughout the State. This enhanced funding means that around
300 new beds will be opened in 2002-03;

under the Rural Government Action Plan for Health, there is additional new
funding of $35 million for rural health initiatives;

funding over four years to complete the development of systems and services
to manage lead exposure issues in Broken Hill;

$8 million will be made available on an ongoing basis to fund the
implementation of a Universal Newborn Hearing Screening Program across
the State. This program will utilise new technologies to test the hearing of
every baby born in New South Wales from 1 December 2002. This will
enable the early identification of newborns with significant hearing
impairment and thereby ensure early treatment;

the provision of additional resources to the Australian Red Cross to enhance
its delivery of blood services within New South Wales and to fund additional
supplies of Factor VIII and new supplies of Factor IX;

$10 million to the NSW Ambulance Service to continue its implementation of
the operational reforms identified by the Auditor-General, further building on
its efficiency, operational effectiveness and improvements in response times;

funding of $1 million for HealthQuest ($0.5 million from 2003-04 onwards)
to enhance the health assessment process for public sector employees;

$38 million for Drug Summit Government Plan of Action Projects, including:

impatient and outpatient detoxification facilities at Nepean and Wyong
Hospitals – an increase of 30 beds ($3 million);

expansion of the methadone program ($18 million);
Budget Estimates 2002-03
8-7

the Cabramatta Anti-Drug Strategy consisting of an assessment team,
transitional rehabilitation, methadone dispensing and acute mental health
care ($2.5 million);

augmentation of Drug and Alcohol services provided by the Corrections
Health Service ($2.4 million);

Youth Drug Court initiatives ($1.8 million); and

Adult Drug Court initiatives ($2.3 million).

the provision of $11 million for the Magistrates Early Referral Into Treatment
(MERIT), a court based diversion program that allows arrested defendants
with illicit drug problems to undertake treatment and rehabilitation under
bail; and

the provision of medical indemnity insurance to Visiting Medical Officers
(VMOs), ensuring the treatment of public patients in New South Wales public
hospitals at an estimated additional cost of around $30 million per annum.
Asset Acquisitions
The Government has again provided NSW Health with guaranteed funding for the
next four years to build and upgrade health services. This guaranteed future
funding makes it possible for NSW Health to plan for long-term construction
programs with certainty within an approved asset acquisition capped commitment
of $1.938 billion over four years. Major regional strategic projects have been
commenced and include clinical and community participation in the planning and
implementation of projects.
The Government has committed $1 million to finalise detailed planning work for
the northern beaches and lower northern sectors of the Northern Sydney Area
Health Service; a further $350,000 for planning the redevelopment of Orange and
Bathurst health services; $150,000 for planning of a new Forensic Hospital at
Long Bay and $150,000 for forward planning of Phase 3 of the Rural Hospital and
Health Service Program.
8-8
Budget Estimates 2002-03
Provision has been made for the commencement of the following major
new works in 2002-03:
Project
Royal North Shore Hospital Redevelopment Strategy
2002-03
Allocation
$m
Estimated
Total Cost
$m
20.0
452.0¹
2.9
14.5
2.9
10.9
1.9
5.0
A total of $20 million is allocated in 2002-03 toward the
comprehensive redevelopment of the Royal North Shore
Hospital (RNSH) campus, consolidating facilities into acute,
subacute and support service zones around a central plaza.
Implementation will be on-going through 2010 but the priority
projects to be completed over the next five years are:

Acute Services Zone: Paediatrics, Obstetrics and
Emergency Department (in construction), the expansion of
the POEM building to include a new Burns Unit and Phase
1 of the main block adjacent to the current Emergency
Department.

Sub-Acute Zone: relocation of Community Health Services
from Chatswood and Cremorne, and the relocation of
dialysis and home training from Duntrim, Potts Point.

Research Services: colocation of the currently scattered
laboratories on the RNSH campus.

Support Services: relocation of the energy plant and
engineering facilities, and the expansion of car parking
within easy access to the hospital zones.
The redevelopment will free up extensive land along the
Herbert Street frontage of the Royal North Shore Campus as
well as the current health facilities at Chatswood, Cremorne
and Potts Point. Revenue from the future sale, or lease, of
these properties will support the redevelopment strategy.
Bourke Rural Hospital and health services
Complete redevelopment of Bourke health services with
majority being new construction. Project includes staff
accommodation units.
Hay Rural Hospital and health services
Complete redevelopment of Hay health services with majority
being new construction. Project includes staff accommodation
units.
Henty Rural Hospital and health services
Co-location of new hospital and health services with the
existing aged care facility. Project includes integrated staff
accommodation.
1. Includes $44.6 million in current Works in Progress and planning expenditures related to works
commenced between 1998 and 2000.
Budget Estimates 2002-03
8-9
2.
Project
Kyogle Rural Hospital and health services
2002-03
Allocation
$m
Estimated
Total Cost
$m
1.9
10.4
4.0
4.0
10.5
10.5
0.5
0.5
1.5
16.4
0.5
5.0
Complete redevelopment of Kyogle health services with
majority being new construction. Project includes
refurbishment for community health and staff accommodation.
Mental Health Accelerated Accommodation Program
Refurbishment and redevelopment of existing under-utilised
mental health facilities as a means of fast tracking an increase
in mental health accommodation.
Metropolitan Clinical Networks Infrastructure
Strategy
The establishment of sustainable clinical networks in the
Greater Metropolitan Areas of Sydney, Newcastle and
Wollongong through investment in clinical speciality services
infrastructure. This program has been developed as an
outcome of the Greater Metropolitan Services Implementation
Group 2001 report.
Bathurst Base Hospital Radiology Equipment
Installation of a Picture Archive and Communication System
(PACS) at Bathurst Base Hospital. This will be the first stage
of a roll out of PACS across the Mid Western Area Health
Service and will enable the hospital to move to digital x-ray,
which can be transmitted to other hospitals and specialists’
consulting rooms. Benefits to patients are immediate, with
24-hour availability of x-rays on-line, improved efficiency and
diagnostic accuracy.
Hornsby Ku-ring-gai Hospital Obstetric, Paediatrics
& Emergency Department
New facilities for Obstetrics, Paediatrics and Emergency
Services at Hornsby Ku-ring-gai Hospital. Project includes
construction of a new 2-storey facility, site infrastructure and
demolition of existing buildings.
Shellharbour Hospital Emergency Department
The expansion of Emergency Services from 12 to 20 spaces
through the provision of an extension adjacent to the existing
Emergency Department.
8 - 10
Budget Estimates 2002-03
Project
Nepean Hospital Emergency Department
2002-03
Allocation
$m
Estimated
Total Cost
$m
1.8
8.6
1.4
9.1
1.0
6.0
5.0
5.0
0.5
4.4
Redevelopment and extension of the existing Emergency
Department to meet expanding service needs. The works will
be phased due to the need to undertake work within the
existing Department. The new extension and refurbished
areas will accommodate acute treatment areas, paediatric
treatment areas, short stay / observation ward, administrative
and public facilities.
Liverpool Hospital Emergency Department
The expansion of the existing Emergency/Trauma department
within the Liverpool Hospital, the provision of additional space
for paediatric services and the relocation of Pharmacy to the
Don Everett Building.
Blue Mountains Hospital Redevelopment
A major redevelopment of clinical and inpatient units at the
Blue Mountains District Anzac Memorial Hospital.
This involves consolidating the ward areas, relocation and
expansion of the dental unit, new mortuary, upgrade of
outreach and clinical support services located on campus,
engineering works, provision of adequate parking, fire safety
upgrade and the construction of a new helipad.
Point of Care Clinical Information System (PoCCS)
Pilot
The implementation of PoCCS order management within a
single teaching hospital to achieve safer, more efficient and
better quality clinical care. Functionality will be deployed for
presentation of patient diagnostic results at the point of care
and automate test and service ordering.
Milton-Ulladulla Hospital Redevelopment
Major upgrade to integrated services including inpatient,
birthing and operating suites, emergency, imaging,
occupational therapy, kitchen and domestic services.
The 2002-03 Asset Acquisition Program also provides for the continuation of
major upgrading/redevelopment works at the Royal Prince Alfred, Concord,
Gosford, Wyong, Campbelltown, Prince of Wales, Royal North Shore, Belmont,
John Hunter, Tamworth, Sutherland, Westmead, St. George, Wollongong,
Shoalhaven and Tweed Heads Hospitals, and ongoing implementation of works
for Aboriginal and Mental Health Services.
Budget Estimates 2002-03
8 - 11
Within the major Area asset strategies announced in 2001-02, the major projects
to proceed to contract in 2002-03 are:
Project
2002-03
Allocation
$m
Estimated
Total Cost
$m
Newcastle Strategy (Estimated Total Cost $235 million)
 Belmont Hospital Refurbishment: construction of a new
Emergency Unit.
4.0
4.0
 John Hunter Hospital, Second Access Road - tenders to be
let for a second access road in parallel to seeking
Development Approval and finalising scheme design on the
major ACCESS project, which will proceed in the latter part
of 2003.
0.5
4.7
7.1
45.0
 Wyong Hospital and Mental Health – redevelopment of
Wyong Hospital to a level 4 hospital incorporating a large
Mental Health facility and High Dependency Unit.
The redevelopment will create six operating theatres with
perioperative service, consolidate outpatient functions,
expand clinical diagnostic and support services and expand
education facilities.
28.3
92.5
 Gosford Hospital Redevelopment - redevelopment of
Gosford Hospital to a level 6 hospital with a new service of
cardiac catheterisation being incorporated.
The redevelopment will allow for a new emergency
department, ten operating theatres with perioperative
service, consolidation of outpatient areas and expanded
clinical diagnostic and support.
30.1
113.5
Western Sydney Strategy (Estimated Total Cost $178.5 million)
 Westmead Hospital - the first project within the Western
Sydney Strategy will commence at Westmead in conjunction
with the Ambulatory Procedures Centre works (Endoscopy,
Perioperative, Day Surgery) and will consist of
redevelopment at day surgery, women’s health and newborn
care, imaging, emergency and associated building
engineering.
Central Coast Health Access Plan (Estimated Total Cost
$206 million)
Phase 1 of the Rural Hospital and Health Service Program (RH&HSP), comprising
the redevelopment of 18 small rural health facilities across New South Wales, is
well under way and will be completed by April 2003.
8 - 12
Budget Estimates 2002-03
Phase 1 includes health facilities located at Collarenebri, Holbrook, Coolah,
Rylstone, Nimbin, Lightning Ridge, Coolamon, Gilgandra, Vegetable Creek,
Denman, Brewarrina, Jerilderie, Blayney, Boggabri, Lord Howe Island,
Gulargambone, Barraba, and Murrumburrah / Harden. This Budget makes
provision for Phase 2 New Works and includes the redevelopment of four rural
hospitals at Bourke, Hay, Kyogle and Henty. Phase 3 includes 14 further
communities identified in the Sinclair Committee Report on Health Services in
Smaller Towns. Planning will be undertaken during 2002-03 for these latter
projects.
The Ambulance Service of New South Wales will continue receiving capital
funding to support the ongoing infrastructure improvement program and
construction funds for the relocation of Queanbeyan Ambulance Station.
The majority of the Rural Hospital and Health Service projects also include
co-location of ambulance services within the respective communities. This will
allow better integration of the two services and has been adopted as a planning
principle for future sites.
HEALTH CARE COMPLAINTS COMMISSION
The Health Care Complaints Commission is an independent statutory body
reporting directly to the Minister for Health and to the Joint Parliamentary
Committee on the Health Care Complaints Commission. The Commission has
powers to investigate complaints against all health practitioners, hospitals,
institutions and health programs.
EXPENDITURE TRENDS AND RECENT DEVELOPMENTS
Total expenses in the last five years have increased as public awareness and
utilisation of the Commission’s services have increased. Recent years have seen a
strengthening of both the Patient Support Office and the Commission’s formal
investigative capacity. In addition, the evolution of alternative and flexible
resolution strategies has enabled the Commission to provide a multi-faceted
approach to complaint management and resolution.
STRATEGIC DIRECTIONS
The involvement of Patient Support Officers, health conciliators employed by the
Health Conciliation Registry, and other local mediation services in the early stages
of complaint management provides a timely and satisfactory solution to most
complainants. Training of local health service staff in complaint resolution is also
intended to provide complainants with resolution at a local, community-based
level.
Budget Estimates 2002-03
8 - 13
Cases with significant public health and safety implications are referred to
professional registration boards for investigation and possible disciplinary action
in the case of registered health professionals.
2002-03 BUDGET
Total Expenses
Total estimated expenses for the Commission amount to $7.9 million for 2002-03.
The significant increase in expenses of 28 percent compared to the 2001-02
Budget is due to additional ongoing funding of $1.4 million (commencing in
2002-03) to enable the Commission to expedite existing investigations and
broaden its complaint resolution capacity, including the implementation of Patient
Support Officers for rural areas.
Asset Acquisitions
An office fitout costing $400,000 is planned for 2002-03 in order to accommodate
additional staff.
8 - 14
Budget Estimates 2002-03