Fee to KordaMentha, fixing Central Adelaide Local Health Network’s $300m budget blowout, doubles to $2 million
A PLAN that aims to end overspending in a struggling section of the state health system overseeing the Royal Adelaide Hospital has itself doubled in cost to $2 million.
- Central health network, RAH to blow budget by $300m
- Consultants brough in to tackle health system’s budget blowout
- Plan for KordaMentha to run finances at RAH, QEH
- Tender issued to cut ballooning hospital finances
- Industrial action as ambo ramping reaches record levels
A PLAN that aims to end overspending in a struggling section of the state health system which oversees the Royal Adelaide Hospital has itself doubled in cost.
Health Minister Stephen Wade told State Parliament on Wednesday that the cost of a contract with consultant firm KordaMentha, which is trying to tackle the issue, would total $1.98 million.
The State Government had previously said KordaMentha was being paid $880,000 to investigate the cause of chronic spending blowouts in SA Health’s Central Adelaide Local Health Network (CALHN).
It was also being paid a further $100,000 to probe allegations by whistleblowers, including concerns about purchasing decisions.
The Government has confirmed a near doubling in the cost of the contract because more work needs to be done to prepare for any changes.
The extra work includes an implementation report and additional time for administrators to liaise with the hospital — factors that were not included in the initial contract.
Mr Wade told Parliament that given CALHN had blown its budget by $300 million, the spend to fix it was modest.
He said the former Labor government had spent $80 million on consultants as it prepared its controversial Transforming Health plans.
“If the CALHN budget overspend is eliminated, the KordaMentha costs … would be recovered in two and a half days,” Mr Wade said.
“If we start delivering savings from today, we would get our money back by Friday afternoon.”
KordaMentha was central in saving the Whyalla steelworks, having been brought in as administrators to turn around the business in preparation for its sale to British billionaire Sanjeev Gupta.
Premier Steven Marshall told Parliament nine firms had responded to a separate request for expressions of interest to implement a plan to deliver savings within the health network.
Opposition health spokesman Chris Picton said the Government had been slow to reveal the cost blowout, and must confirm whether it would rise further.
“The public have a right to know what the Government have in store for public hospitals,” he said.
“It’s been a terrible week with ramping that the clinicians are saying is worse than it’s ever been, and we know that the Government is sitting on a secret report that has now cost $2 million.
“They won’t even show people what this is going to mean for their local hospitals.”