Hiring freeze and cuts to surgery, stationery: Hospital chief’s warning over ‘challenging’ budget

The chief of one of Victoria’s largest health services has warned that the state government’s budget cuts are more challenging than anticipated and imposed an immediate hiring freeze.

Western Health – which manages Sunshine, Footscray, Williamstown and Bacchus Marsh hospitals and five community health centres – will also reduce its elective surgery, scrapping the weekend and high-intensity theatre lists that were part of the government’s blitz on waiting lists.

Western Health chief executive Russell Harrison (centre) and politicians on a tour of Sunshine Hospital in 2021. Credit: Justin McManus

“No one, least of all me, wants to be sharing this message,” Western Health chief executive Russell Harrison said in an email to staff on Monday.

“I appreciate that this will be confronting and will be adding a further layer of stress, anxiety and uncertainty on top of the many challenges we all face and tackle each and every day.”

Western Health is one of the largest providers of healthcare in Victoria, employing more than 11,000 staff and caring for a diverse community of almost 1 million people.

Harrison said Western Health had received its budget spreadsheet for the next financial year from the Department of Health on June 14.

Health Minister Mary-Anne Thomas.Credit: Justin McManus

“It is fair to say that we are facing an incredibly challenging environment, more so than any of us had anticipated or expected,” he said, although he noted the process was not yet concluded.

“The current draft budget has been reduced from previous years. It is a clear signal from the government that they are changing their approach and viewing this as a reset for health service budgets.”

Harrison told staff that Western Health’s top priority was to minimise service impacts as much as possible and was working through a co-ordinated approach to address its financial goals and sustainability.

He said it was critical that a prudent approach was taken to minimise the potential impacts and create savings, effective immediately.

This included a recruitment freeze on all positions across the organisation, including filling existing openings. (The only exception was Footscray Hospital roles that had explicit funding from Treasury.)

There would also be no new capital works programs, a ban on travel unless paid for by external sources, and a reduction in elective surgery.

“There will be no more weekend or high intensity lists for the forseeable future,” Harrison wrote.

So-called Super Saturdays and high-intensity theatre lists (HIT lists), formed part of a blueprint released by the government last year to reduce elective surgery waiting lists.

Sunshine Hospital is part of Western Health.Credit: Jason South

Surgeons would run “HIT” clinics to power through a backlog of similar operations, such as hip replacements and add another day of surgery on weekends.

In May, the Allan government walked away from a promise to offer an extra 40,000 elective surgeries annually by 2024, lowering its targets back to pre-pandemic levels.

Harrison said staff were also encouraged to reduce spending on items such as stationery, training courses and furniture.

“If you have any cost-saving ideas please share these with your manager or through improvement initiatives such as Getting Rid of Stupid Stuff.”

Harrison said he believed it was important to be open and honest with staff and share the situation Western Health faced.

“It’s cold comfort, I know, in that we are not facing this alone and I suspect it will be some weeks before we have a final outcome from this process.”

He said Western Health’s board would submit its response to the draft budget – and its implications – on June 28.

“I wish I could have given you all a much more positive message or a fuller one,” Harrison wrote, urging staff to treat each other with dignity. “It will help us prevail and support us to get through this as best we can.”

A Western Health spokesperson said the organisation was still working with the Department of Health to agree on a final budget that would aim to support the healthcare needs of the growing community in Melbourne’s west.

“Healthcare services operate in a complex and challenging setting and we are taking active steps to respond to a constrained fiscal environment, such as recruitment holds, capital expenditure and preventing travel at this time, aimed at having minimal impact in providing best quality treatment, care, research and education for the people of the west,” the spokesperson said.

The Department of Health said health services had been provided with their modelled budgets for 2024-25 and corresponding activity targets.

It said options for efficiencies were being considered by every service to ensure they could plan for the rest of the year. These plans would then be considered by the department to ensure there was oversight of potential impacts to the system as a whole.

The department said a number of services were making localised decisions about changes they could make in the short term to reduce costs, while still prioritising frontline care.

“Since coming to government, we have invested billions upgrading our hospitals and health services, recruited more than 32,500 additional staff in our hospitals and 2,200 more paramedics and in this year’s budget alone, we have invested more than 25 per cent of the state’s annual budget into our health services,” a government spokesperson said.

“Health services haven’t submitted their budget action plans to the Department of Health for review and final budgets haven’t been agreed to.”

Opposition health spokeswoman Georgie Crozier said Labor’s funding cuts were having a direct impact on hospitals being able to deliver safe patient care.

“Labor’s ongoing mismanagement of health will see a loss of services and a loss of frontline jobs that will impact the delivery of safe patient care,” she said.

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