Funding squeeze will be critical blow to state’s ailing health system

It was barely three years ago that Victorians were confined to the safety of their homes, while the vital organs of Victoria’s hospital system – doctors, nurses, cleaners and allied health workers – donned full-length gowns, masks and gloves to save lives during the deadly COVID-19 pandemic.

Lauded as heroes by politicians and the media, these frontline workers worked longer-than-ever shifts to respond to unprecedented demand on the hospital system while getting sick themselves, with some even dying from the virus.

Months rolled into years of untenable and deteriorating conditions in our hospitals, as the pandemic exposed and aggravated the vulnerabilities in our ailing health system.

Doctors and nurses were pushed to the point of exhaustion and burnout, causing an exodus of highly skilled practitioners. Over the past few years, Victorians have been spent more hours waiting in emergency departments, while ambulance ramping has continued, and the state government has fallen short of its elective surgery promises.

If we have learnt anything from the pandemic, it is the vital importance of a properly funded healthcare system, and that catastrophic consequences are inevitable when this is undermined, overlooked and neglected by politicians tasked with spending public money.

It is astonishing, therefore, that the Labor government ministers who steered the state through the worst of the pandemic are now spearheading what has been described by the Australian Medical Association as “savage” funding cuts to hospitals, causing two of Victoria’s largest health services, Western Health and Northern Health, to impose immediate hiring freezes. Western Health is also now preparing to reduce elective surgery.

Stories published in The Age over recent days have chronicled the cost-saving measures the state’s biggest hospitals are weighing up, while they brace for the greatest financial shock in 30 years as the government tackles ballooning debt, infrastructure delays and cost blowouts.

The government’s proposed model budgets that were presented to the state’s 76 separate public hospital networks, and are yet to be finalised, threaten to decimate our health services. A secret recording of a meeting of hospital executives revealed the possibility of bed closures, shutting wards, cancelling breast screening and reducing elective surgery were discussed.

“The whole system is going to tank,” one administrator told the meeting.

These revelations punch a hole in Health Minister Mary-Anne Thomas’ “nothing to see here” rhetoric this week, including claims that cuts are aimed at skimming the fat off hospital budgets by targeting executive wages, marketing staff and overseas travel. Thomas and Premier Jacinta Allan have chalked up the week’s reports on hospital cuts to mere “speculation” and “fearmongering” drummed up by the opposition.

Victorian Health Minister Mary-Anne Thomas tours a new elective surgery theatre at the Alfred Centre in early 2023.Credit: Penny Stephens

Of course hospitals are expected to be responsible for balancing their budgets and not overspend taxpayer dollars. But a $200 million cut to the operating expenses of the state’s largest network, Monash Health, cannot possibly affect “waste and duplication” alone, as Thomas has preferred us to believe.

Make no mistake, hospitals have some tough decisions ahead of them about patient care, and every Victorian should be concerned. The hospitals must soon submit their plans to the Victorian Department of Health, which has the final say over where clinical services are provided.

To its credit, the Andrews government boosted hospital funding after COVID-19, including a $1.5 billion catch-up plan and reforms to surgery in April 2022 before a state election focused on health. The reforms improved staffing and resources and streamlined activity, as well as including plans to increase the number of operations performed. But the goal to perform a record 240,000 surgeries has been discarded, with Victoria expected to perform 207,000 “planned surgeries” – as elective procedures are now called – by the end of this financial year.

This week brought a win for Victorian nurses and midwives, who have overwhelmingly approved a 28.4 per cent pay rise over four years, ending eight months of tense negotiations between their union and the state government. Of all the professions in need of pay rises, there are few more deserving than hardworking nurses and midwives. It will, however, put further pressure on hospital budgets.

While the government is at pains to reiterate that it has made no final decisions regarding public hospital budgets, the squeeze that hospitals are bracing for threatens to seriously undermine the sustainability of our health system.

Much like a dull backache or tooth pain, it is only when things go from bad to worse that we truly appreciate the critical importance of our health, or more specifically, a well-functioning health system.

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