Friday, 3 December 2021

Since the beginning of the COVID-19 pandemic, Australia’s public and private hospitals have faced the healthcare challenge of our generation.

Despite reassuring trends in case numbers and hospitalisations, it’s still too early for senior executives to relax the day-to-day focus of managing on the frontline. The emergence on our shores last week of the Omicron variant1 underscores the continued need for vigilance at the highest level of management, especially as the virus continues to mutate. But it would be a missed opportunity if boards of health organisations become consumed by the operational response and underinvest in longer-term strategy development and risk management. Hospital boards and executives need to walk and chew gum, dealing with today’s evolving demands whilst anticipating tomorrow’s pressures and opportunities.  

Working with the sector, we are seeing executives and board members dealing concurrently with the barrage of urgent daily and operational issues, while finding less and less time to look ahead to the important two-three year horizon, let alone any longer term issues. There is an opportunity now, with the number of new COVID cases heading south2 across the country, for healthcare boards and senior executives to think about the broader future needs, risks and opportunities they should be planning for. 

Robust crisis management has necessitated an overhaul of operational flexibility for many healthcare organisations, in both structure and process, just to get through the current situation. But now operators need to re-evaluate any overly bureaucratic and fragmented systems, create a better capability to deal with a recurrence of this level of crisis, and set themselves up for future success. The sector’s ground rules have shifted fundamentally. Highest order issues demanding careful consideration and planning include financial pressures, workforce challenges and whether today’s infrastructure creates a platform for future success. 

Financial stress is paramount, as the sustainability of the healthcare system has buckled under the demands of the pandemic. Increased government debt has and will continue to put health spending and efficiency under pressure, whilst the battleground of hospital funding has seen interstate border closures used as a bargaining chip3 between state and federal governments. Within hospitals themselves, cost escalation has become problematic4 as supply chains are pressurised, vast amounts of additional protective clothing and equipment are utilised, security and sanitisation protocols create additional workload and cost inflation is starting to bite.  

Workforce difficulties present perhaps the most challenging aspect of all. Currently, Healthcare and Social Assistance workers5 make up nearly 15% of Australia’s total workforce, and over the past five years, jobs in the industry have increased by nearly 23%. The federal government is forecasting further employment growth of 14% in this sector by he end of 2025. There are growing concerns however about looming staff shortages as an ageing workforce exits the sector, and fatigue creates increased turnover of younger employees. This is exacerbated by the challenge that mandatory vaccination presents for many healthcare professionals – almost 4,000 Queensland healthcare workers6 have been suspended for choosing not to get the Covid vaccine, while in South Australia, SA Health reports7 391 of its staff chose not to be vaccinated. All these factors have combined to lift the temperature of industrial relations conversations. No wonder that HWA predicts8 a national shortage of 100,000 nurses by 2025.  

Meanwhile, Mental Health Australia reports9 that the mental health and well-being of 70% of healthcare professionals has been impacted by increased stress levels during the pandemic, resulting in unprecedented levels of burnout and absenteeism. Healthcare workers have had to stare down increased demand due to the influx of seriously ill COVID patients, adapt to alternate care settings and models of care and manage a backlog of elective surgery waiting lists, all off the back of one of the worst bushfire crises Australia had ever experienced.   

Healthcare infrastructure requirements have also ramped up in the last two years and are not expected to slow. Assets have been ‘sweated’ to a point where many institutions face significant lifts in capex budgets just to maintain existing service standards. And that’s before they begin itemising the investments needed to support the altered settings the COVID response required, many of which they now want to keep. The mix of services demanded of many organisations has changed. Previously adequate (if ageing) infrastructure is no longer fit-for-purpose to fulfil new requirements, such as hospital in the home, telehealth, and the demand for improved infection control. Rapid technology deployment is of course a key ingredient to future-focused asset strategy, as new products are brought to market allowing unsustainable systems to be streamlined, enhancing procedural efficiency and minimising risk. 

All of these shifts have profound implications for strategic options and plans for healthcare of the future. Whilst they may all be part of the routine strategic risk reporting, the fundamental nature of the risks has shifted. Equally, the current strategies deployed to manage those risks may be coming of age. With heightened environmental pressures and uncertainty now a constant backdrop, boards and senior executives must have dynamic and effective risk management and reporting in place to keep an eye on the future. 


1 Ally Foster and Alex Blair, Omicron Australia Covid updates (2 December, 2021) <>

Coronavirus (COVID-19) case numbers and statistics (2 December, 2021) Australian Government Department of Health <>

Stephanie Borys, State health ministers demand crisis funding for hospitals ahead of eased COVID-19 restrictions (5 October, 2021), ABC News <>

4 Crisis Management in Healthcare - Adapting to Covid 19 (26 May 2021) Olympus <>

5 Health Care and Social Assistance Industry Analysis (23 November 2021) Labour market and Information Portal <>

6 Brendon Oliver, 4000 health workers suspend for refusing Covid Jab (1 November 2021) Gold Coast Bulletin <> 

7 Rebecca Opie, SA Health data reveals hundreds of staff forced to take leave over COVID-19 vaccination refusal (2 November 2021) ABC News <>

8  Coping with demand and a healthcare workforce shortage (28 April 2019) Australian Healthcare Week Digital <

9 Candice Jones, Support from friends and family crucial to health workers’ wellbeing (8 October 2020) Mental Health Australia  <>