‘Streamline that spending’: Hospitals told to cut back where they can

Victorian hospitals must get rid of “waste and duplication”, the state’s health minister has declared, as she and the premier left it up to health services to make their budgets work under strict new rules.

The Age revealed on Thursday that two of Victoria’s largest health services had imposed immediate hiring freezes in response to new funding arrangements that mean hospitals will not have their budgets topped up if they fall into the red.

Health Minister Mary-Anne Thomas said hospitals were not being asked to cut patient care.Credit: Penny Stephens

Health Minister Mary-Anne Thomas was asked four times on Thursday whether hospitals would have to wind back services as a result of her government’s demand for savings.

The Labor frontbencher declined to rule out bed closures or elective surgery cancellations, but did insist she had not asked hospitals to slash patient care as part of a bid to rein in spending.

“There’s a lot of fearmongering and politicking going on at the moment,” Thomas told ABC radio.

“Let me be clear: our government delivered an additional $8.8 billion into our hospitals at our most recent budget. This year alone, $20 billion is being invested into our hospitals.

“Right now, we are asking our health services to look at their budgets, to negotiate their upcoming budgets with my department, and to look at where they can streamline that spending.”

The Coalition says the funding shake-up is because Victoria’s budget has too much debt, and that the government’s tough stance will lead to hospital amalgamations and erode patient care. The May budget predicted net debt would rise to $187.8 billion by June 2028.

But Thomas said on Thursday that the negotiations were designed to create a sustainable health system.

“The message is very clear: it’s time to get rid of waste and duplication.

“It’s time to take a hard look at the number of executives, the number of communications and marketing people, [and] whether or not it’s really necessary to travel overseas for professional development.”

Western Health – which manages Sunshine, Footscray, Williamstown and Bacchus Marsh hospitals, and five community health centres – has already told staff it plans to reduce elective surgery.

Western Health and Northern Health – which manages Northern, Broadmeadows and Kilmore District hospitals, and Bundoora and Craigieburn centres – have also told workers of temporary freezes on some recruitment.

Opposition Leader John Pesutto said the elective surgery reductions showed the seriousness of Victoria’s financial woes.

“Lives will be put at risk because of the severity and savageness of these budget cuts,” he said.

Premier Jacinta Allan backed her cabinet colleague on Thursday, insisting that no final decisions had been made regarding public hospital budgets for the new financial year.

“So any speculation is just that – speculation – and fearmongering,” Allan said. “Particularly by Liberal politicians who only know one line when it comes to the hospital system, and that is to cut and close.”

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.