Razor gangs forced to identify millions in hospital budget savings

EXCLUSIVE: HOSPITAL razor gangs have been forced to identify tens of millions of dollars in budget savings after sudden changes to funding formulas.

The Austin hospital is facing a budget deficit of up to $30 million.

HOSPITAL razor gangs have been forced to identify tens of millions of dollars in budget savings after sudden changes to funding formulas.

Monash Health is among the worst hit, with fears that about $40 million will have to be cut, while hospitals including The Alfred and Austin are also facing deficits of up to $30 million.

The cash crisis has come after changes to the way money is provided for complex diagnoses, on top of skyrocketing power bills.

One health source, who did not want to be identified, said current shortfalls meant some hospitals “won’t be performing things they would have performed before”.

“Patient welfare and safety is to come first, and won’t be compromised,” the source said.

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Complex funding models mean hospitals get money for providing certain services, and changes to the way money is provided is understood to be part of the reason hospital budgets are in turmoil.

This includes diagnostic services for things such as sleep disorders, skin conditions and respiratory problems. The state government says it has delivered record funding of $10.6 billion this year — about $666 million more than last year — to cope with surging growth.

But Opposition health spokeswoman Mary Wooldridge said Premier Daniel Andrews should step in to ensure that hospitals weren’t “short-changed” by changes to funding formulas.

“Hospitals are already being crushed by skyrocketing power prices and booming population growth and now Daniel Andrews leaves them cash-strapped,” she said.

Opposition health spokeswoman Mary Wooldridge says the Premier should step in to ensure that hospitals weren’t “short-changed”. Picture: Steve Tanner

Spokeswoman for Health Minister Jill Hennessy, Elisa Fernandes, said there were “no cuts in Victorian Government funding for hospitals” and all hospitals were getting extra state money this year.

It is understood hospital executives and Department of Health officials have held meetings to discuss the dilemma, and that some hospitals have started to assess the impact of shortfalls they now expect. Further negotiations are expected in coming weeks.

A Department of Health and Human Services spokesman said the $10.6 billion in funding for Victorian hospitals was 6.7 per cent more than in the previous financial year.

“The government’s increased funding will support hospitals to meet demand so patients can access the care they need and deserve, more quickly, no matter where they live,” he said. “It will enable hospitals to admit 1.9 million patients, treat 1.8 million patients in emergency and carry out more than 200,000 elective surgeries to reduce waiting lists even further.”

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