Hospitals asked to find huge savings, in move that could see hundreds of frontline jobs go

Melbourne’s Alfred and Royal Children’s are among hospitals facing savage budget cuts, that could result in hundreds of job losses. And some regional health services may be forced to close.

Victoria’s major hospitals are facing crippling budget cuts as the Allan government struggles to rein in spending.

Hospitals have been asked to find massive savings by the end of the month in a move that could also include hundreds of frontline job losses.

Sources say major facilities including the Alfred and the Royal Children’s Hospital could be among the hardest hit.

Regional services are also among those facing tens of millions of dollars in reductions, with some warning it will force their closure.

It is understood the government has provided hospitals with new targets and is awaiting their response before deciding on their final budget allocations.

Health insiders said some hospitals were considering selling assets, limiting surgeries and cutting jobs to find government-mandated savings of 20 per cent.

Health minister Mary-Anne Thomas vehemently denied hospitals had been asked to reduce their budgets by such a significant amount.

Melbourne’s Alfred hospital. Picture: Mark Wilson

Ambulances ramped at the Alfred Hospital this month. It may now face savage funding cuts. Picture: Wayne Taylor

But the Herald Sun has been told hospitals were directed in a series of phone calls earlier this month to find the savings.

It could force major metropolitan hospitals to cut back frontline services, while regional hospitals face the prospect of closure.

Many hospitals say they are already cutting into reserve funds while one regional hospital has cut cleaning services, with nurses taking on those duties.

“Hospitals have been given some very unrealistic targets,” one source said.

“These deliberate moves by the government to not fund hospitals is to ensure they all comply with the mergers, as it leaves them no choice if they want to survive.”

The government is currently considering forced mergers of hospitals to reduce the number of health services from 76 to as few as 12.

Pop singer Pink visits sick kids at the Royal Children's Hospital. Photo: Ian Laidlaw

Last week 25 small regional hospitals were ordered to cut back costs again by up to 30 per cent.

Larger hospitals have previously run on activity funding, which meant they are remunerated depending on demand, but with that now removed hospitals bosses are warning that staff and service cuts were now expected.

The Victorian Healthcare Association CEO Leigh Clarke said the cumulative effects of a series of cost containment measures by the state would have consequences.

“The idea of returning to ‘pre-Covid’ funding fails to reflect the challenges and cost pressures facing the Victorian public healthcare system. Doing more with less is not an option particularly as services have been asked to make cuts to non-clinical staff and services, in addition to a budget squeeze that leaves no more room to move.

“We know that there is continued demand for services and that is not going to change until we look at how we can better pay for other parts of the system like aged and community care. “We’re calling on the government to have a hard look at these budget cuts, including the urgent need to ease cost containment measures to ensure frontline services are not directly impacted, as well as guaranteeing it will provide a ‘top-up’ if the sector runs into further financial difficulty.”

Premier Jacinta Allan and Health Minister Mary-Anne Thomas (left) at The Royal Children’s Hospital. Picture: Valeriu Campan

Opposition health spokeswoman, Georgie Crozier, said forced cut backs would have a devastating impact on health services and patient outcomes.

“The priorities of the Allan government are all wrong,” she said.

“The health and wellbeing of Victorians is being abandoned as the Allan Labor government prioritises pouring $200bn into the Suburban Rail Loop.

“These cuts will lead to a loss of services and access to vital healthcare, and a loss of jobs.

“Labor cannot manage money, cannot manage our health system and Victorians are paying the price.”

In a letter to health boards following this year’s state budget Ms Thomas said it was “imperative that health services operate within their prescribed budgets and are proactive partners in mitigating cost growth in the system”.

She said this week that health services’ final budgets had not yet been agreed to.

“We are investing a record $20 billion into our hospitals this year alone — delivering all hospitals an extra $1.5bn this financial year alone,” Ms Thomas said.