South Australian health cost-cutting deal with KordaMentha on verge of renewal
Administrator KordaMentha is on the verge of reappointment to a controversial cost-cutting contract at the SA Health agency running the Royal Adelaide Hospital.
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Administrator KordaMentha is set to be reappointed to a controversial cost-cutting contract at the SA Health agency operating the Royal Adelaide Hospital.
The private company, which oversaw the Whyalla steelworks rescue, was appointed last November in a bid to turn around a $300 million budget blowout in the Central Adelaide Local Health Network (CALHN) by 2021 and save $276 million in three years.
The KordaMentha contract’s first stage is due for renewal by November and it is understood the CALHN governing board held an extraordinary meeting last week to consider an extension.
It is understood the likely renewal by early October was bolstered by a favourable report by business advisory firm PKF Australia.
Announcing the initial one-year, $18 million contract last November, Health Minister Stephen Wade declared this would “launch a responsible road map back to stability and excellence”.
A KordaMentha update in August said a $104.9 million turnaround had been achieved in six months, compared to the $41 million target for June 30.
Mr Wade then argued cost-saving measures were also delivering better patient outcomes.
The savings included cutting expensive agency nurses from a peak of 7.7 per cent of total nursing labour hours to less than 1 per cent.
Labor has lashed moves to extend the contract, declaring clinicians have said KordaMentha has presided over worsening hospital ramping and out-of-control emergency department overcrowding.
A Government spokesman said only: “No decision regarding KordaMentha post the initial contract has been made.”
The Sunday Mail has been told contracts of this nature typically require the firm to be notified at least a month in advance about whether or not they will be renewed.
Opposition health spokesman Chris Picton argued State Budget figures showed CALHN overspending increased by $25 million at the same time the KordaMentha contract cost taxpayers $23 million.
He accused the Government of forging health policy focused on jobs for corporate liquidators paid more than $5000 per day amid fewer positions for doctors and nurses.
“This is great news for the corporate liquidators but bad news for patients who will pay the price with less doctors and nurses,” Mr Picton said.
“With ambulance ramping worse than ever before, I’m sure those patients stuck waiting will be thrilled there will be more accountants and less doctors and nurses in the hospital.”