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Section A - Policy

2. Overview

2.3 Capital Infrastructure Expenditure and Equipment Funding

The State Budget 1999-2000 provides new works funding approval for new capital infrastructure projects totalling $68.3 million for the acute health capital program, including $30.5 million for metropolitan hospitals and $37.8 million for the provincial and rural hospital sector.

This funding includes expenditure of $11.1 million ($38.5 million total end cost) for the implementation of the following Acute and Aged, Community and Mental Health projects funded under Metropolitan Health Care Service Plan:

• Redevelopment of Royal Melbourne Hospital (stage 2).
• A new Integrated Care Centre as part of the redevelopment of the Royal Women's Hospital.
• Provision of angiography equipment at Dandenong Hospital.
• Development of a community care unit in the inner west metropolitan area.
• Provision of two new community rehabilitation centres in Southern Health Care Network.

In 1998-1999 the Department committed significantly increased funding to equipment with a focus on equipment replacement to meet Year 2000 Compliance needs. This funding will continue in 1999-2000.

In addition to the above, the Department has established a significant pool of capital funding ($54 million) from which allocations will be made across Networks and non-Network public hospitals in 1999-2000 for the acquisition of new or replacement equipment and infrastructure maintenance purposes.

In 1999-2000, $28 million will be allocated to hospitals for general equipment and infrastructure maintenance purposes. Block grants will be paid in the first quarter to each Network and non-Network hospitals. Allocations will be made on the basis of WIES and adjusted for non-admitted activity and the size of the hospital. A base limit will continue to apply for smaller rural hospitals and Multi Purpose Services (MPS). Networks and hospitals will be required to account for the equipment as having been committed and expended in their annual returns to the Department, although the exact expenditure of these funds will be at the discretion of providers.

In 1999-2000, an additional $12 million equipment funding will be targetted towards upgrading or replacement of major equipment items. Submissions will be sought in July 1999 and grants will subject to the following criteria:

• Grants for Networks hospitals and Barwon Health to be allocated for medical equipment which have a minimum purchase/replacement cost of $300,000.
• Grants for rural Group B hospitals to be allocated for single items or "suites" of medical equipment which have a minimum purchase/replacement cost of $200,000.
• Grants for other hospitals (non-Network Group C, D and E hospitals) to be allocated for plant and equipment acquisitions which have a minimum purchase/replacement cost of $50,000.

Special funding has also been allocated in 1999-2000 for infection control programs ($4 million); the ongoing annual replacement of renal dialysis equipment ($4 million); and other programs ($4.8 million). $1.2 million will be allocated to continue to support the back injuries program for nurses to ensure ongoing support in effective changes to nurses' work practices. The program aims to reduce significantly the comparatively high level of back injuries among nurses. Funding will be targetted to those hospitals demonstrating a policy and/or funding commitment to supporting this program.

For the first time, equipment and maintenance grants will be made to Victoria's Bush Nursing Hospitals. This initiative funded through the Community Support Fund, will allocate $2.1 million in 1999-2000.

Networks and hospitals with telemetry equipment that may be affected by the transmission testing of Digital TV on frequency band 174-230 MHz are required to develop contingency plans to effectively manage any risk to patient care. All equipment operating in this band will need to be modified or replaced to operate outside the affected frequency band. In the first instance, hospitals should determine the level of obligation of suppliers and manufacturers to cover the cost of replacement or modification. This matter needs to be actively pursued by hospitals to ensure that equipment is supplied according to specifications. Funding for the replacement of telemetry equipment needs to be considered in the context of the general and targetted hospital equipment grants proposed for 1999-2000.

Victoria is recognised as a leader in the field of medical research in Australia. Research grants have been provided since 1 July 1993 to the major teaching hospitals as part of the Training and Development Grants. Additional funding of $10 million, from the Australian Health Care Agreement, will continue in 1999-2000 to support medical research and teaching. This funding will supplement the costs of research and teaching; and provide infrastructure such as buildings; heat, light and power; personnel and payroll systems; and, often, part salaries to researchers. The funds will be allocated to hospitals and Networks on the same basis as in 1998-99. A review of the actual costs of research support, commenced in 1998-99, will be completed in 1999-2000.

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