Cost Of State Hospitals

Press, Volume CVII, Issue 31540, 30 November 1967, Page 12

Cost Of State Hospitals

Why modern State hospitals “cost very much more” than quality private hospitals, is analysed by Dr M. H. Cooper, in a report on hospital building costs published by the New Zealand Medical Association.

Three basic reasons given in the report are: the building cost a square foot is nearly twice as great; individual departments are, in the main, more spacious; and there are more departments in State hospitals. Private hospitals, says Dr Cooper, tend to use outside pathology, radiology and pharmacy services, while providing no outpatient facilities. In a preface to the report, the association says that provision of comprehensive medical care has run against

the rock of spiralling hospital costs. “If ways cannot be found to reduce hospital costs, without reducing standards of medical care, then the ideal that every citizen, regardless of his financial status, can be offered the benefits of modern medicine, will not survive. This would be a tragedy.” The association says it is convinced that much of the present expenditure on hospital services and buildings is unnecessary, and could be avoided without sacrificing standards.

Dr Cooper contrasts the cost, in 1965 of St Andrew’s private hospital built at Rotorua for $3BOO a bed, with the cost of a State hospital, for the North Shore, to be duplicated at Waitakere, at a cost of well over $16,000 a bed (1965 assessment). The main difference between the cost a square foot of St Andrew’s, Rotorua, and other public hospitals, he says, lies not in the reinforced concrete “carcase,” but in mechanical services and finishing materials. Dr Cooper says that the true cost of the North Shore hospital, when other costs were added, was something over $2O million. Yet a 740bed hospital, based on the best of Green Lane, could be built for less than one third of this. A reduction of from $l2 million to $l4 million could be achieved. He asks what could be done to reduce hospital costs with a Health Department and Ministry of Works committed to extravagant hospital construction. “Somehow, a very determined Ministry of Finance will have to convince the Health Department that public hospital beds need not exceed $5400,” Dr Cooper says.

If department experts said this could not be done without sacrificing patient care, then Mr Muldoon should arrange a detailed architectural survey, independent of the Health Department and the Ministry of Works, of St Andrew’s Hospital, and the present Green Lane Hospital. “Who knows—he might discover that even Green Lane could be built for less, while

still providing patient care equal to the best in the world.” the report says. Many of New Zealand’s largest hospital projects have been designed by Stephenson and Turner, an Australian firm of architects. This was one serious drawback for New Zealand in that their profits are paid in overseas currency, thus widening the trade gap with Australia, says the report.