State gov promises extra funding as hospitals face job cuts, bed closures, surgery cancellations

Premier Jacinta Allan has promised to provide top-up funding to major hospitals who have warned they will have to slash staff or cancel surgeries amid savage budget cuts.

Premier Jacinta Allan has promised to ensure hospitals are given top-up funds to avoid both staff cuts or surgery cancellations.

Major hospitals have warned the government they will be forced to close beds, sack staff and cancel surgeries amid demands they significantly slash their budgets.

Hospitals across the state have been asked to make massive savings, which some sources have estimated at more than $1bn, with cost saving models now under assessment by the state government who will finalise budgets in coming weeks.

Hospitals across the state have been asked to make massive savings. Picture: Andrew Henshaw

The Premier, who has labelled leaks from “scaremongering”, told ABC Melbourne on Tuesday the government was ready to increase funding to hospitals.

“There should be no cancellation of surgery or putting off of staff,” Ms Allan said.

“If we do need to provide more funding to hospitals in addition to the record funding we have provided in this year’s budget, if government needs to provide additional funding as we work through this budget setting process with hospitals, we will do so.”

The Royal Children’s Hospital is among hospitals which has warned jobs and services are at risk, with sources revealing it is bracing for funding cuts of up to $60m.

Monash Health has been working to find savings of $350m while Alfred Hospital insiders say up to $180m could be wiped from its books.

The Royal Melbourne Hospital is bracing for up to $230m in cuts over the next two years. Picture: Wayne Taylor

The Royal Melbourne Hospital is bracing for up to $230m in cuts over the next two years, while Bendigo Health is looking to reduce costs by $120m.

Ms Allan said the state’s health system was still reeling from the effects of the Covid-19 pandemic.

“We want to give Victorians the world class health service that they deserve,” she said.

“We’ve effectively had to rebuild our health system following the pandemic.

“These are huge challenges and we want to absolutely deliver more care to more patients.

“Labor governments always back in our hospitals.”

The peak body for public hospitals welcomed the announcement but said more detail was needed “given the government’s commitment to reigning in expenditure”.

Victorian Healthcare Association chief executive Leigh Clarke said if the government was “truly serious” about not cutting patient care, their hospital budget measures needed to be “realistic”.

“The current one-year timeframe to achieve operational sustainability carries with it significant risk and that is why services have been left with some difficult choices,” she said.

“Returning to pre-pandemic funding is not an option in this current environment as inflation runs ahead of the true cost of service delivery.”

The government has been warned hospitals are planning to slash frontline services including stripping back surgeries and extending a standard two-week Christmas shutdown from two weeks to six weeks.

Health sources said such initiatives would wreak havoc with hospital waiting lists and cause significant delays for some surgeries.

At least one hospital has warned intensive care beds closures are inevitable.