Planned surgery, also known as elective surgery, is surgery that can be booked in advance following a specialist clinical assessment resulting in a patient’s placement on the planned surgery waitlist. Under the Australian Medicare principles, patients can access planned surgeries free of charge in NSW public hospitals. Common planned surgery procedures include cataract extraction, joint replacement and gall bladder removal. Planned surgeries are scheduled in order of listing date by the patient’s treating clinician, and in line with 3 clinical urgency categories that determine the priority of the procedure. Under these categories, urgent planned surgeries should be completed within 30 days, semi-urgent planned surgeries within 90 days and non-urgent planned surgeries within 365 days of the listing date.

The Ministry of Health and local health districts have a purchaser–provider relationship for the delivery of healthcare services, including planned surgery. The Ministry of Health establishes performance expectations and the policy environment, and distributes activity-based funding via service agreements. Local health districts are expected to achieve zero overdue patients for each clinical urgency category of planned surgery.

Semi-urgent and non-urgent planned surgeries were paused several times between March 2020 and January 2022 due to the COVID-19 pandemic. This led to a significant backlog of patients overdue for surgery.

This audit assessed whether NSW Health efficiently and effectively provides access to planned surgery to public patients across the state. The audit made this assessment by answering the following questions.

• Does NSW Health have effective policies, processes and data to manage planned surgery access?
• Is NSW Health effectively and efficiently managing planned surgery waitlists?

The main review period for this audit was between January 2022 and December 2025.

NSW Health has cleared most of the backlog of patients waiting for surgery caused by pauses to planned surgery during COVID-19. However, it is not meeting the nationally agreed target of ‘zero patients waiting longer than clinically recommended for surgery’. Access to planned surgery is variable, with a disproportionately higher number of patients in some local health districts experiencing longer wait times than patients in other districts. In 2024–25, only 4 of the 17 local health districts and specialty health networks met the goal of zero patients waiting longer than clinically recommended for surgery.

NSW Health has effective policies, processes and data to manage planned surgery access and is reducing unnecessary surgeries and boosting planned surgery volumes to make better use of limited hospital resources. NSW Health has a fit for purpose policy that supports local health districts to manage planned surgery waitlists efficiently within constrained resources, supported by reliable systems data that informs decision-making. However, NSW Health is not systematically rolling out initiatives across the state that are known to improve the efficiency of planned surgery.

NSW Health does not always complete planned surgeries for public patients within clinically recommended timeframes

NSW Health has mostly cleared the backlog of patients caused by pauses to semi-urgent and non-urgent planned surgery during COVID-19, from almost 19,000 overdue patients to an average of under 4,000 in the 6 months to December 2025. However, NSW Health is not completing planned surgery for all patients within clinically recommended timeframes, which is a key performance indicator (KPI). In 2024–25, only 4 of the 17 local health districts and specialty health networks met the goal of zero patients waiting longer than clinically recommended for surgery. Districts mostly achieved zero overdue patients in the urgent category, for patients who must be treated within 30 days.

Senior NSW Health officials advise that, rather than a goal of zero patients, the pre-COVID-19 2018–19 performance of about 1,000 overdue patients at the end of a given month is a more realistic and practical benchmark or baseline for what the system can sustainably achieve with current resources. However, even this level of performance was not achieved over the review period.

As of December 2025, there were 3,885 patients waiting longer than clinically recommended for planned surgery throughout the NSW Health network. There is also considerable variation in performance amongst the local health districts, meaning that the time public patients spend on the waitlist depends on the hospital at which their surgery is scheduled.

NSW Health is not maximising the use of more efficient models to deliver planned surgery

During the audit review period, NSW Health has trialled several initiatives to increase efficiency in delivering planned surgery. This includes surgical hubs, pooled surgery waitlists, and identifying and reducing unnecessary surgical interventions. However, NSW Health is yet to roll out these initiatives across the state, limiting their impact on system-wide efficiency.

NSW Health has continued to focus on eliminating certain surgical procedures – known as low-value procedures – that are not supported by strong clinical and patient outcome evidence. For example, NSW Health is providing funding for hospitals to divert patients from surgical care where it is clinically safe to do so. In addition, NSW Health revised its planned surgery access policy to require doctors to provide a clinical explanation and approval for procedures other than high-value procedures.

NSW Health has begun to identify and run surgical hubs: high-volume, short-stay centres that, due to their scale, can treat a larger number of patients. NSW Health expects that this model will achieve improved safety outcomes for patients relative to traditional models, due to clinical staff's frequent practice of certain procedures. Due to the volume of patients this model is also expected to result in more efficient delivery of planned surgery. Relatedly, NSW Health has endorsed international benchmarks that are intended to increase surgical efficiency and improve the system’s ability to treat patients on time.

NSW Health identified expansion of pooled surgery waitlists as a key strategy to efficiently manage demand for planned surgery. The planned surgery access policy makes it clear that people on the planned surgery waitlist are patients of the district. Districts can allocate a suitable doctor to perform the required surgery, and the policy provides guidance on setting up pooled waitlist arrangements. However, local health districts struggle to implement these models at scale due to clinical workforce shortages and reluctance on the part of surgeons. The Ministry of Health could do more to monitor, encourage and support local health districts to expand this model where it is clinically safe to do so.

NSW Health’s performance framework and governance activities focus on improving access to planned surgery

NSW Health uses its performance framework to focus local health districts on prioritising planned surgery access performance and reaching the target of zero overdue patients across all urgency categories by the end of the financial year. Underperforming local health districts must explain underperformance at regular performance discussions. Of the 17 local health districts, 8 were at escalated performance levels at some point over the review period, due in part to planned surgery access concerns. Additional planned surgery recovery meetings held between the Ministry of Health and local health districts demonstrated an effective regime of escalation and intervention for underperforming districts to target areas for improvement.

In July 2025, NSW Health introduced an additional KPI focused on day surgery rates for select procedures. This new KPI is intended to focus hospitals on reducing overnight bed use, improving theatre throughput and freeing capacity to treat more patients safely and efficiently.

NSW Health has invested in surgery volume intensification and outsourcing surgery to the private sector, measures that have been effective in reducing wait times for planned surgery in the short term. The number of patients overdue for surgery increased after the investments in outsourcing and volume intensification lapsed. Inflation in costs to deliver surgery and increased demand via population growth are key risks to the longer-term sustainability of planned surgery service delivery.

NSW Health has a fit for purpose planned surgery access policy that supports local health districts to manage their planned surgery waitlists

NSW Health has an up-to-date and fit for purpose planned surgery access policy, which provides districts with clear directives on key activities involved in waitlist management and scheduling of surgery in line with the ‘treat in turn’ principle, and clinical urgency categories. Following a recent update, the policy now strengthens clinical governance reviews for non-standard urgency categories and aligns with efforts to increase planned surgery efficiency, including day surgery and benchmarks for procedure numbers delivered per surgical session.

NSW Health has a good understanding of supply and demand for planned surgery

NSW Health has a good understanding of the supply of, and demand for, planned surgery. The discipline of managing the planned surgery waitlist week to week ensures that administrators are aware of short-term supply and demand factors. NSW Health is developing more comprehensive and consistent tools to further improve demand forecasting for planned surgery and to communicate results with administrative and clinical staff. NSW Health has identified longer-term constraints, including hospital bed capacity and a growing cohort of older patients requiring more surgical care. Both local health districts reviewed for this audit experienced clinical workforce shortages, particularly relating to anaesthetists, which affects their capacity to perform planned surgery in line with demand. Shortages tend to be more acute in regional hospitals.

NSW Health has robust processes to ensure waitlist data is fit for purpose, but there remain control weaknesses at the local health district level

The administration of planned surgery waitlists at local health districts is reliant on paper forms and manual data entry and a lack of automatic system checks. However, a structured system of clerical checking and ad hoc reviews mostly compensates for the control weaknesses of the manual paper-based process. The planned surgery access policy does not provide guidance on the frequency and scope of ad hoc reviews to support robust data quality.

NSW Health maintains a central waitlist data collection, which includes information on patients joining and leaving the planned surgery waitlists. Data in the collection is updated via a monthly extract from local health district patient administration systems and is subject to completeness and validity checks. Despite control weaknesses at the local level, NSW Health waitlist data is fit for purpose as a record of planned surgery access performance and to inform decision-making.

By June 2027, the Ministry of Health should:

1. Define additional efficiency performance targets for inclusion in service agreements with local health districts for the delivery of planned surgery by expanding and enforcing the current set of international benchmarks for surgical productivity
2. Identify and determine the planned surgery service delivery models that achieve greater efficiencies and surgical throughput, and target policy and investment accordingly
3. To supplement current clerical reviews, develop risk-based guidance for local health districts to conduct:
   1. regular, sample-based compliance reviews of clinical urgency categorisation changes to support clinical review panels
   2. periodic internal audits of planned surgery waitlist management and compliance.

Planned surgery, also known as elective surgery, is surgery that can be booked in advance as a result of a specialist clinical assessment resulting in a patient’s placement on the planned surgery waitlist. Patients are listed on the planned surgery waitlist after seeing a specialist surgeon and submitting a Recommendation for Admission form, which contains details of the patient and their required surgical procedure. Under the Australian Government’s Medicare principles, patients who elect to be treated free of charge as public patients in NSW Health hospitals are treated based on clinical need and in line with ‘treat in turn’ principles. This means that surgeries are scheduled in order of listing date, and according to the following 3 clinical urgency categories informed by clinical need, which determine the priority of the procedure.

• Category 1: Urgent – to be treated within 30 days
• Category 2: Semi-urgent – to be treated within 90 days
• Category 3: Non-urgent – to be treated within 365 days.

NSW Health’s planned surgery access policy sets out the policy requirements and scheduling principles that local health districts and hospitals must follow when managing planned surgery waitlists. The policy, most recently revised in September 2025, applies to surgical procedures performed in an operating theatre, requiring anaesthesia and surgical techniques.

Non-urgent planned surgery was paused several times during the COVID-19 pandemic between March 2020 and January 2022. This resulted in a backlog of overdue planned surgery patients, reaching a peak of almost 19,000 patients overdue for planned surgery in April 2022. At the end of the audit period in December 2025, there were almost 3,900 overdue patients. Exhibit 1 shows the number of patients overdue for surgery from July 2018 to December 2025.

NSW public hospitals are mostly funded based on activity expressed in a common activity unit called Nationally Weighted Activity Units (NWAU) multiplied by the state price. The Ministry of Health purchases NWAU from local health districts, and nominates different categories of service activity, such as emergency, acute or non-acute care. Planned surgery is classified as acute care. Acute care also includes other types of admitted patient activity. More complex procedures consume more NWAU than less complex procedures. This method of funding supports technical efficiency by closely tying funding to activity.

NSW Health uses an activity-based costing methodology to estimate costs of surgical procedures. Exhibit 2 shows that NSW Health now spends about $2.3 billion per year providing planned surgery.

Source: Ministry of Health.

Of the 17 local health districts and specialty health networks, 2 – South Western Sydney and Hunter New England – were selected to provide focus and illustrative examples for the audit. The audit team held interviews with clinical and administrative staff and reviewed relevant documentation from both districts to gain an understanding of local practices and initiatives to inform case studies throughout the audit report. The audit team visited Liverpool and Campbelltown Hospitals in South Western Sydney Local Health District, and John Hunter, Maitland and Tamworth Hospitals in Hunter New England Local Health District. See Appendix 2 for further details on the selected local health districts and hospitals, and Appendix 4 for further details on the selection of these 2 local health districts.

Three surgical specialties were selected to focus the audit’s inquiries at the chosen local health districts and hospitals: Ear, Nose and Throat (ENT); Ophthalmology; and Orthopaedics. These specialties perform high-volume procedures such as cataract surgery, hip and knee replacements, tonsil removals, and grommet insertions. These procedures also account for a high proportion of patients on the waitlist and overdue for surgery.

Less than 25% of local health districts achieved planned surgery access KPIs

Only 4 of the 17 local health districts and specialty health networks met the ‘zero overdue patients for all categories’ target for 2024–25, as shown in Exhibit 3. While local health districts generally meet targets for urgent planned surgery that is clinically indicated within 30 days of referral, most record overdue patients for semi-urgent and non-urgent categories. ESAP performance is set out in Appendix 3.

The 2 local health districts reviewed for this audit – South Western Sydney and Hunter New England – underperformed on planned surgery access KPIs over the review period. Both districts have experienced pressure on capacity to deliver planned surgery, including unplanned demand, infrastructure constraints and clinical workforce shortages, which are discussed in more detail in Chapter 5.

Refer to Appendix 3 for a data table on overdue patients’ results for each clinical urgency category.

#  Sydney Local Health District and Western Sydney Local Health District are considered by the Ministry of Health to have met the target of zero overdue patients for all categories in 2024–25.

Source: Audit Office of New South Wales analysis of Bureau of Health Information data.

The Ministry of Health considers 2018–19 results to be the baseline for planned surgery access system performance against which the system underperforms

Despite the official KPI targeting zero overdue patients for planned surgery across all urgency categories, in practice senior NSW Health officials advise that they consider the 2018–19 performance to be an effective benchmark to gauge system performance, that is, around 1,000 overdue patients. NSW Health officials first identified 2018–19 as the baseline during the period immediately after the COVID-19-related pauses on planned surgery activity to set an expectation of what a return to normal looked like. However, this understanding has persisted as the Ministry of Health benchmark for what the system can deliver within current financial resources.

Exhibit 4 shows overdue patient performance against a nominal 1,000 overdue patients benchmark. The exhibit shows that NSW Health underperformed against the identified baseline over the review period. The Ministry of Health reports that limited funding and rising surgery demand prevent the system from reaching the 2018–19 baseline of zero overdue patients.

Planned surgery access KPIs focus attention on overdue patients

The performance framework has enabled local health districts to address planned surgery access performance and has focused Ministry of Health attention on local health districts requiring additional assistance. The performance framework sets out an escalation procedure for local health districts that have not achieved KPIs. As the performance of local health districts declines, 4 performance levels have progressively more Ministry of Health involvement. For example, in order to implement effective strategies to address access concerns, the Ministry of Health has established a planned surgery access recovery meeting as a forum for local health districts and the Ministry of Health to review progress against recovery plans and facilitate collaboration across the NSW Health network. Of the 17 local health districts, 8 were at escalated performance levels at some point over the review period, due in part to planned surgery access performance.

Day surgery targets introduced for 2025–26 are expected to improve overall system efficiency and effectiveness

In July 2025, the Ministry of Health introduced a day surgery KPI for 8 procedures that research indicated were suitable for day-only models of care. The new KPI targets 68% of the 8 identified procedures delivered as day-only surgery. The Ministry of Health also introduced an improvement measure for monitoring districts' reduction in average length of stay for hip and knee replacement procedures. Previously, local health districts were encouraged to explore same-day models of care but without targets or an expectation that they must explain performance in implementing these models of care.

Same-day surgery is potentially beneficial for patients in terms of health outcomes but also allows hospitals to achieve greater throughput because patients do not occupy an overnight bed. The saved bed days can then be used for additional planned or unplanned admissions. The Ministry of Health identified the British Association of Day Surgery benchmarks as aspirational targets to work towards in NSW. It expects to expand the scope of these targets over time. The new targets are expected to incentivise local health districts to adjust models of care to achieve better outcomes for patients and for the healthcare system.

During the review period, local health districts increased day surgery procedures overall, including for high-volume procedures. Ministry of Health analysis of same-day surgery indicates that increased prevalence of day surgery procedures for the 8 procedures subject to the new KPI contributed an additional 12,773 saved bed days in 2024–25. From July to November 2025, NSW Health delivered 45% of the eligible procedures as day surgery.

Funding enhancements to address the planned surgery waitlist backlog achieved short-term reductions in the planned surgery waitlist

The NSW Government paused semi-urgent and non-urgent planned surgery at times during the COVID-19 pandemic, resulting in a significant backlog of patients overdue for planned surgery. The NSW Government committed additional funding between 2022 and 2025 to address the backlog.

• May 2022 deferred care package: $405 million for 2022–23 and 2023–24 to address the planned surgery backlog.
• November 2024 additional surgery demand package: $186 million for 2024–25 to address the planned surgery backlog.
• May 2025 ageing and population package: $137 million for 2025–26 to fund general ageing and population factors affecting acute hospital services, including, but not limited to, planned surgery.

The Ministry of Health allocated $414 million of the deferred care and additional surgery demand packages to local health districts to reduce overdue patients based on their number of patients overdue for surgery. It distributed the entire $137 million ageing and population package to local health districts according to their demographic profiles.

The Ministry of Health retained a small reserve from the first 2 packages to facilitate cross-district flow of patients and for dedicated projects to achieve system reform. For example, in March 2023, part of the deferred care package was used to clear a backlog caused by changing the clinical urgency categorisation of second eye cataract procedures from non-urgent to semi-urgent in line with updated clinical evidence. That is, from an expectation that patients receive treatment within 365 days to 90 days. Exhibit 6 illustrates the trend in overdue patient numbers, indicating when targeted planned surgery funding enhancements were released to the local health districts.

The Isolated Patient Transport Access and Accommodation Scheme (IPTAAS) helps ease the financial burdens of patients who must travel for surgery, but is not currently funded to meet future demand

The IPTAAS provides financial assistance in the form of reimbursements for patients travelling long distances to receive specialised healthcare. It is available for planned surgery and other healthcare services. In 2024–25, NSW Health spent $57.3 million on the IPTAAS, supporting 59,800 patients to receive specialist healthcare, including around 27,000 planned surgery patients. NSW Health’s evaluation of the program shows that patients accessing the IPTAAS experienced better health outcomes than patients who did not access it. NSW Health estimates that the amount of funding it allocates to the IPTAAS cannot meet future demand at current service levels.

Local health districts run assessment prioritisation programs in partnership with local First Nations organisations to promote equitable access to planned surgery

First Nations patients do not wait longer than non-First Nations patients for planned surgery once placed on the waitlist. However, research indicates that First Nations patients experience barriers to healthcare prior to joining the planned surgery waitlist; these are often due to historical, culturally unsafe healthcare settings and practices. Consequently, both local health districts reviewed for this audit have entered into partnership agreements with local First Nations organisations for patients to access health services, including the provision of bulk-billed specialist doctor appointments through outreach clinics. These clinics allow for the prioritisation of assessment of First Nations patients to ensure they receive required surgical care where clinically indicated.

For example, Hunter New England Local Health District has implemented a priority pathway for First Nations children presenting with hearing issues to access specialist ENT care through the John Hunter Hospital outpatient clinic. Children are initially assessed by an allied health audiologist who consults with the ENT surgeon to confirm whether surgery is required, resulting in placement on the planned surgery waitlist according to clinical indications. The pathway resulted in reduced waiting times for assessment, as well as strong diagnostic outcomes and patient safety. In 2025, 215 children were seen through the pathway, with an average waiting time of 79 days.

Reviewed local health districts have a good understanding of the demand for planned surgery services and their capacity to treat patients on time

Both local health districts reviewed for this audit have actions to focus on reducing the number of patients overdue for planned surgery and ensuring that patients are treated in turn. They have daily and weekly meetings to identify short-term actual and potential barriers to treating patients on time, and they demonstrate flexibility in accommodating last minute changes. In addition, they are aware of seasonality in the demand for planned surgery and of the factors that affect their ability to treat patients on time. Further, they have plans to accommodate the predictable and routine surge in demand for hospital resources during winter months that constrain the number of beds available for planned surgery patients.

Both local health districts are also attuned to the effect of school holidays on their ability to run surgical services at full capacity and adjust planned surgery activity accordingly. Patients are added to the planned surgery waitlist after being assessed by a specialist surgeon, which mainly occurs through the surgeon’s private rooms, or, less often, through local health district public outpatient clinics. NSW Health has limited visibility of the demand for planned surgery prior to patients being added to the planned surgery waitlist. The planned surgery access policy provides guidance on managing spikes in demand for surgery caused by doctor referrals in excess of local health districts’ capacity to complete surgeries within the recommended clinical urgency timeframe. However, the local health districts reviewed for this audit report that this section of the policy is often difficult to enforce.

During fieldwork for this audit, both local health districts’ clinical leaders spoke about the relative complexity of the needs of their planned surgery patients, and reported that this complexity is not always reflected in patient records. South Western Sydney Local Health District recently began a project to better reflect the clinical complexity and comorbidities of planned surgery patients, and the clinical services provided. The district hypothesises that patients on its waiting lists generally present later and with more comorbidities than in other parts of metropolitan Sydney. Improving the accuracy of clinical coding may support districts in their conversations with the Ministry around efficiency and access performance metrics.

NSW Health developed a series of tools to consistently identify and make use of surgical capacity

Both local health districts reviewed for this audit produce a series of local management reports on the status of their planned surgery waitlists and factors affecting their ability to treat patients on time, such as theatre efficiency and length of stay. In the last 3 years, NSW Health has invested in a series of centralised operational dashboards to harmonise practice and support a common understanding of effective waitlist management. For example, the Surgical Demand and Capacity Dashboard, commissioned in August 2025, was modelled on a design pioneered at Northern Sydney Local Health District.

The dashboard allows local health districts to consistently forecast the number of overdue patients by specialty and surgeon. This gives districts consistent tools to identify and address upcoming capacity bottlenecks and to initiate evidence-based discussions with clinicians where required to address any concerns. In time, NSW Health plans to introduce greater sophistication in forecasting to the dashboard to better support local health districts in understanding demand for planned surgery, existing constraints and identifying areas for improvement relative to peers.

Unplanned surgical activity levels can encroach on local health districts’ ability to meet planned surgery performance targets

Hospitals are required to manage their operating theatre capacity to perform both emergency and planned surgery. Hospitals will typically schedule planned surgical lists in some of their theatres, while keeping their other theatres available for emergency surgery. Emergency surgery is higher priority than planned surgery and unexpected high volumes of emergency surgery can displace planned surgery. NSW Health publishes guidance for local health districts to manage and preserve capacity for planned and unplanned surgery. The Ministry of Health argues that local health districts should be able to effectively ring fence planned and unplanned surgery lists to ensure that the latter do not encroach on the former.

Both local health districts reviewed for this audit are exploring the implementation of ‘catch and release’ programs. These will reduce the demand of emergency patients on beds by saving bed days and better organising unplanned surgery lists to avoid encroaching on planned surgery lists. For example, South Western Sydney Local Health District is trialling an emergency gall bladder removal and hernia repair surgery catch and release program at Campbelltown Hospital. In this program, instead of the patient occupying a bed for multiple days while waiting for surgery, they will instead be sent home with remote monitoring and re-present to hospital on the day of their scheduled surgery. This allows for the use of hospital resources to be more evenly distributed.

Hunter New England Local Health District reported infrastructure challenges that compound increased unplanned hospital demand. The district has identified that bed block, stemming from unplanned surgery rather than operating theatre availability alone, is a major constraint in addressing the number of overdue patients on its waitlist. Therefore, the hospital cannot resolve its backlog only by operating additional theatres, but must invest in strategies to make beds available, increase the volume of surgery that does not require a bed or find ways to divert surgical volume away from the John Hunter Hospital. Hunter New England Local Health District has recently updated its district-wide clinical service planning to divert lower-acuity planned surgery to smaller hospitals, for example, by moving Orthopaedic surgery to Maitland Hospital and General surgery to Belmont Hospital.

NSW Health is supporting local health districts to implement clinical practices that help to safely reduce patients’ length of stay following surgery, freeing up space for other patients

The amount of time that patients recover in hospital beds following surgery affects a hospital’s ability to achieve higher surgical throughput and treat more patients within a given timeframe. Strategies that reduce patients’ recovery time in hospital are therefore attractive to system administrators seeking to improve planned surgery access performance. Patients also benefit from a reduced length of stay in hospital, as they can recover in the comfort of their home and report improved satisfaction under these approaches compared with traditional surgery service models.

NSW Health’s 2023 Enhanced Recovery After Surgery (ERAS) guidelines are a key example of how a strategy, once implemented within a surgical model of care, can safely reduce length of stay in hospitals and any unplanned readmissions. The ERAS guidelines are designed to improve patient reported outcomes, with reduced length of stay and early mobilisation, as well as patient safety outcomes, including reduction in postoperative complications and readmissions. The ERAS guidelines can support districts implementing models of care to achieve Ministry of Health day surgery targets. They also provide clinicians with evidence-based perioperative protocols that should be integrated into local surgical models of care.

Both local health districts reviewed for this audit have integrated ERAS protocols into models of care for delivering planned surgery to suitable patients. For example, since 2023, South Western Sydney has operationalised day surgery models of care guidelines incorporating ERAS protocols for patients undergoing planned tonsil and gall bladder removal surgeries. Overall, between 2023 and 2025, the district has achieved an average reduction in length of stay of 0.3 and 0.2 days for tonsil and gall bladder removal respectively. In late 2024, Hunter New England’s Maitland Hospital implemented a Rapid Knee Arthroplasty project, which has embedded ERAS protocols into the knee replacement surgery model of care. In the first 6 months of the program to May 2025, the average length of stay for the 45 patients undergoing their surgery under this model of care was significantly reduced from 7.6 days in the first quarter of 2024, to 2 days. The hospital has also made cost savings associated with the reduced overnight hospital stays.

The Ministry of Health is encouraging local health districts to develop specialised surgical hubs to more efficiently treat patients waiting for planned surgery

NSW hospitals deliver planned surgery at varying rates of cost efficiency. For example, in 2024–25 the average cost per procedure for hip replacement was approximately $25,200 at Concord Hospital and $36,900 at St George Hospital. Over the review period, the Ministry of Health encouraged and incentivised local health districts to adopt hub models for high-volume or specialised surgical procedures. These hubs are expected to capitalise on the efficiencies that can be generated by concentrating clinical expertise and volume in one place. In September 2025, the Ministry of Health invited local health districts to apply for one-off funding to set up or expand surgical hubs and high-volume short stay centres. The Ministry of Health funded 24 projects across 13 districts for $25.8 million in 2025–26. Districts are expected to cover costs from the 2026–27 financial year onwards.

Separate to Ministry of Health funding, Hunter New England Local Health District is also implementing a surgical hub model. In late 2025, Maitland Hospital opened the Hunter Joint Centre. The Centre will treat patients suitable for day-only and short-stay hip, shoulder and knee replacement procedures. It will have guaranteed access to a ring-fenced sixth operating theatre, accompanied by ring-fenced beds available for recovering patients. The centre aims to complete 5 joint procedures per 10-hour surgical session, compared with a current district average of 3 to 4 procedures per session.

In 2025, NSW Health endorsed the United Kingdom National Health Service’s Getting It Right First Time (GIRFT) standard for several surgical procedures. For example, the GIRFT standards for cataract procedures are 6 cases performed per 4-hour surgical session. There is an opportunity in the future for the Ministry of Health to use the benchmarks to inform both performance monitoring of districts and hospitals and clinical service planning, including decisions to consolidate surgical services into hubs.

The local health districts reviewed for this audit identified a potential trade-off in establishing surgical hubs, where other hospitals in the district may experience degradation of experience in some surgical procedures as surgeons at non-hub sites complete fewer of the high-volume procedures targeted by the hubs. Further, local health districts assert that certain surgical skills cross-pollinate to emergency surgery settings, which presents nuanced challenges for larger trauma centres that must provide a full range of specialty surgical services.

The future of surgical hubs for regional areas is not well understood in the regional local health district reviewed for this report. Hunter New England Local Health District staff raised concerns that extensive implementation of surgical hubs might require regional patients to travel further for high-volume surgery procedures. Medicare principles require that regional patients are reasonably able to access surgical services. However, NSW Health does not have a clear definition of what travel is reasonable to implement this model at scale for regional areas.

NSW Health uses policy and funding levers to encourage better-value care and manage planned surgery waitlists

Over the review period, the Ministry of Health used policy and funding levers to encourage the system to deliver better-value care. Low-value procedures are procedures that have little to no benefit to patients. Aside from benefits to patients, concentration on better-value care means that scarce surgical resources are spent more effectively. In November 2023, the Agency for Clinical Innovation (ACI) released a clinical practice guide on value-based surgery. The ACI is the NSW Health organisation responsible for researching, identifying and designing clinically led innovations that improve patient experience and outcomes, and deliver efficient and sustainable healthcare services. The clinical practice guide on value-based surgery contains an evidence-based list of potentially low-value procedures that may have little to no benefit to patients. It also provides hospitals with a framework to review and make decisions on surgical activity in line with better-value care principles.

The updated planned surgery access policy, released in September 2025, has guidelines for integration of better-value care principles into planned surgery decision-making. Based on the ACI’s guide, the policy has a list of potentially low-value procedures that must be reviewed in line with value-based care principles. The policy requires that potentially low-value procedures have ‘a demonstrated clear clinical need to improve a patient’s physical health’. The ACI intends to continually review and expand the list in the future in line with new evidence.

In August 2025, the Ministry of Health invited local health districts to express interest in additional funding to support access to high-value non-surgical care as an alternative to unnecessary surgery. Eight districts were successful in securing $3.6 million for 2025–26.

Pooled waitlists are a key strategy to manage demand for planned surgery, but local health districts have been unable to implement them at scale

The planned surgery access policy makes clear that patients are patients of the hospital within the local health district. That is, the policy establishes that the local health district can allocate any appropriately qualified doctor to perform the required surgery. However, in practice, patients are largely assigned to the surgical waitlist of their referring doctor, and waiting time is contingent on that doctor’s availability as well as the ‘treat in turn’ principles. A pooled waitlist is a mechanism to assign a patient’s surgery to the next available treating doctor who is participating in the arrangement. This means that patients are assigned a date for surgery based on the date they are added to the waitlist and clinical urgency, rather than as a function of the date they are added to the waitlist, clinical urgency and the capacity of their referring doctor. NSW Health expects that pooled waitlists will result in shorter wait times for patients because hospitals will be better able to use any latent capacity among their surgical staff.

In March 2024, the Surgical Care Governance Taskforce’s final report identified that the implementation of pooled waitlists across districts was an under-utilised strategy. Nine of the 17 districts and networks identified pooled arrangements as a locally implemented strategy. However, further inquiries at the 2 local health districts reviewed for this audit suggest that this arrangement is not widespread across most surgical procedures. In January 2026, Hunter New England and South Western Sydney Local Health Districts reported that they run one or 2 pooled waitlists each on a routine basis, comprising a small fraction of all surgical lists across these districts. The taskforce found that pooled waitlist arrangements are fit for purpose for high-volume procedures, such as hernia repair, tonsil removal and lower joint replacements. It argued that, as an evidence-based strategy to meet demand, there is a need to continue to promote the use of pooled waitlists where appropriate.

The updated planned surgery access policy, released in September 2025, included changes to give local health districts more operating authority to pursue pooled waitlist arrangements with their clinicians. It also provided clear guidance on how to communicate proposals to transfer a patient’s care to another treating doctor, including as part of a routine pooled waitlist arrangement.

The local health districts reviewed for this audit identified pooled waitlists as a key strategy both within their surgical governance meeting papers and within performance meetings with the Ministry of Health. Both districts are seeking to establish additional pooled arrangements for selected specialties, including Ophthalmology, Gynaecology and General surgery. However, both districts reported that there are barriers to setting up pooled arrangements, mainly due to reluctance from clinical staff. Surgical workforce shortages in regional areas often exacerbate the power imbalance between doctors and hospital management, increasing the difficulty of implementing changes like greater use of pooled waitlists.

Outsourcing is effective in clearing short-term waitlist backlogs and remains an important surge capacity tool, but is not a substitute for longer-term reform

Outsourcing planned surgery procedures on public waitlists to private hospitals is a way to clear waitlist backlogs and reduce overdue patients in the short term. However, this approach can attract premium costs and degrade public hospital capacity in the longer term. Outsourcing was a key strategy employed to reduce the COVID-19 backlog and remains an important strategy for local health districts in addressing sudden increases in overdue patients for high-volume, low-complexity procedures. Exhibit 7 displays the quarterly number of procedures outsourced to private hospital operators over the review period and indicates a large volume of outsourced surgery to clear the COVID-19 backlog. It also shows subsequent surges to clear overdue patients leading up to the end of each annual performance cycle, utilising the additional government funding reported in Chapter 4.

Clinical workforce shortages affect selected local health districts’ ability to deliver planned surgery and are more acute in regional settings

Australia, like many other countries, is experiencing a shortage in anaesthetists. Both local health districts reviewed for this audit have experienced anaesthetic workforce shortages that affect their ability to conduct planned surgery, as well as certain types of medical procedures. If an anaesthetist is not available for the scheduled operating theatre session, then surgeries must be cancelled and rescheduled to a later date. This risks patients being treated outside of their clinical urgency category timeframe.

In addition to providing anaesthesia services to surgical patients, anaesthetists are also required to provide sedation to patients undergoing some medical procedures, including endoscopy. A further risk from the shortage of anaesthetists is that, given the choice between deploying scarce anaesthetic resources on planned surgery or on medical procedures requiring anaesthesia, hospitals will rationally choose planned surgery. This is because there are targets for planned surgery but not for medical procedure access. This may result in longer wait times for patients waiting for medical procedures that require sedation.

Both local health districts reviewed for this audit developed local strategies to manage the shortage. Campbelltown Hospital in South Western Sydney Local Health District has introduced into their visiting medical officer contracts a minimum number of hours that an anaesthetist is expected to work. This gives the district certainty in scheduling surgical sessions above the standard zero-hour contracts, and, in practice, visiting medical officers generally work greater than the minimum hours.

Both districts are exploring ways of easing the burden on anaesthetists in order to better utilise their skills and expertise. For example, expanding nurse practitioner scopes of practice to include providing pain management services for patients that are currently provided by anaesthetists. Pending a successful evaluation, the districts anticipate that these changes will allow anaesthetists to spend more time in theatres supporting planned surgery and may, in combination with other efforts to streamline anaesthetists’ roles, allow the districts to schedule additional planned surgery lists.

Regional hospitals face an additional challenge in attracting qualified anaesthetists to their towns. For this reason, many regional hospitals employ rural general practitioner anaesthetists to provide sedation to patients for minor, uncomplicated surgical procedures. In doing so, the rural general practitioner anaesthetists reduce the burden on specialist anaesthetists. However, this audit identified some regional variation in implementing this approach. For example, Tamworth Hospital has not endorsed this strategy, unlike other regional hospitals in the district. Reviewing whether this variation in practice within a district is warranted may be an option.

In August 2022, the Surgical Care Governance Taskforce identified the anaesthetist shortage as a key risk to the system’s capacity to deliver planned surgery. The taskforce identified a need to increase the number of specialist anaesthetist fellows by between 6 and 15 per year until 2036 and anticipated the development of a strategy to achieve this outcome. The Ministry of Health reports that, in the absence of a formal strategy, actions have been taken to address the shortage through providing incentives for internationally trained anaesthetists to fill positions in areas of need. It further reports that it continues to discuss increasing the number of trainee places with the Australian and New Zealand College of Anaesthetists.

Regional hospitals experience distinct workforce challenges

Regional hospitals experience acute shortages in other parts of their specialist medical workforce. For example, Tamworth Hospital did not have an ENT specialist for the 8 years prior to 2022, which limited options available for patients requiring ENT surgery in the New England region.

In 2022, the NSW Parliamentary Inquiry into Health Outcomes and Access to Health and Hospital Services in Rural, Regional and Remote New South Wales published a report that highlighted health-sector workforce issues in regional NSW. In 2023, the Ministry of Health published its Regional Health Strategic Plan 2022–32 which identified priority areas and associated targets. Progress against the targets for each priority area are publicly reported in annual progress snapshots.

The first priority in the Ministry of Health’s plan is to strengthen the regional workforce by targeting regional workforce supply issues with supports such as training and upskilling of clinical staff and investments to improve recruitment and retention, including incentive benefits for hard-to-fill and critical roles and key worker accommodation. These initiatives are not specifically directed towards planned surgery services in regional NSW but are nevertheless expected to alleviate staff recruitment and retention challenges affecting planned surgery delivery.

Hospitals over-recruit medical roles to account for attrition and reduce the risk of workforce shortages

Junior doctors are doctors who are not yet trained through a specialist medical college and rotate through hospital departments as part of training. They are a core component of a hospital’s surgical workforce. The medical recruitment year for junior doctors commences each February. Towards the end of the previous year, junior doctors seek appointment as senior doctors and often leave junior doctor roles for permanent positions at other hospitals. Therefore, there is high attrition in junior doctor roles towards the end of the calendar year. The local health districts reviewed for this audit reported that, during this time, workforce shortages are at their worst and compounded by the limited ability to recruit doctors to fill vacant positions until the following February. All hospitals are vying to recruit from the same limited pool of available doctors, and hospitals may need to rely on locums to fill these gaps later in the year, attracting a premium cost.

Hunter New England Local Health District has recently implemented a strategy to over-recruit for junior surgical roles at the beginning of the 2026 year to account for successful candidates who are offered roles, but withdraw, as well as for expected attrition later in the year. The district anticipates that this will help ensure that it maintains capacity to keep services running throughout the year, with fewer cancellations of surgical lists and delays to patients’ surgeries.

In a similar strategy, aimed at addressing attrition risk and to account for expected withdrawals, Campbelltown Hospital in South Western Sydney over-recruits for visiting medical officer anaesthetists on minimum-hour contracts. Campbelltown Hospital also recruits Career Medical Officers – experienced doctors who have chosen not to specialise – at regular points throughout the year to cover the shortages arising from attrition.