The New South Wales government has unveiled a plan to confront a deepening staffing crisis in the state's hospitals, pledging to rein in soaring locum costs and establish a new unit to tackle workforce shortages. The move comes in response to a Special Commission of Inquiry into Healthcare Funding, with data revealing a dramatic spike in spending on temporary medical staff.
Locum Costs Skyrocket in Hunter Region
Official figures presented to the inquiry show a staggering increase in locum expenditure within the Hunter New England Health district. Salaries and wages for locums surged from $34 million in 2021-22 to $61 million in 2023-24, highlighting the growing reliance on expensive temporary staff to keep services running.
In a statement to the inquiry, Hunter New England Health CEO Tracey McCosker confirmed that locums were essential to ensure hospitals and health services "remain open". She detailed how the use of locums to fill medical, nursing, and midwifery vacancies had a "significant impact" on the district's budget.
"Facilities often find themselves bidding against each other to secure the same locum," Ms McCosker stated. She added that locums frequently waited until close to a required shift to confirm attendance, when rates were higher. The problem became so acute that junior staff at John Hunter Hospital were reportedly leaving their positions to work as locums elsewhere in the district, exacerbating understaffing at the major hospital.
Government's Reform Package
Responding to the inquiry's findings on Thursday, the Minns government, through NSW Health Minister Ryan Park, promised significant reforms. The centrepiece is the creation of an internal locum agency within NSW Health, designed as an alternative to the current third-party agency model.
The government stated this new agency would reduce "the state's spend on locum agency fees". While it would not directly cut locum pay rates, the government believes better management of supply and demand could ultimately lower costs.
Additionally, a central workforce unit will be established to monitor data on workforce supply and demand. This unit aims to develop strategies to fill vacancies and prevent future shortages, informing long-term planning across all local health districts. The government has supported most of the inquiry's 41 recommendations.
Doctors Demand Systemic Change
The government's response follows the start of a major Industrial Relations Commission case between doctors and the state. Hunter doctors joined 15,000 colleagues across NSW in fighting for fair pay, safer rosters, and proper staffing levels.
Evidence presented to the IRC was scathing. A Hunter New England director of medical services criticised the state's dependence on locums as evidence of "failed workforce planning and a poor use of the NSW Health budget". The director argued there was "no effective mechanism to determine permanent staffing requirements", leaving services in "a perpetual cycle of reactive recruitment" where roles were difficult to fill due to a lack of stability and competitive pay.
Premier Chris Minns said health workers were at the centre of the government's response, while Minister Park described it as the "beginning of a new chapter of reform" that would support health workers and ensure hospitals meet community needs.
