State hospitals told to plan for more cuts in spending

Friday 30th November, 2012

Victorian Health Minister David Davis. Photo: Luis Enrique AscuiVictorian Health Minister David Davis has told hospitals to plan for multimillion-dollar budget cuts over the next seven months, conceding patients will suffer as a result of federal government funding changes from next week.

In a letter to hospital board chairs, Mr Davis said the federal government was refusing to back down on plans to slash $106.7 million from Victorian hospital budgets this financial year.

Mr Davis first raised concerns about the federal government's recalculations six weeks ago. He said they were based on flawed population data.

''There is no doubt that these cuts will impact negatively on the treatment of patients,'' Mr Davis wrote this week. ''Therefore I ask you and your board to assess the impact of the reductions and consider potential changes you would need to make to operate within these unprecedented and unwelcome new financial parameters.

''In light of the intransigence of the Commonwealth government and the imminence of their funding reduction I ask that you consider its impact and begin planning spending reduction options which minimise the impact on services.''

An attachment to Mr Davis' letter detailed the budget cuts that would flow through to each hospital for the remainder of this financial year, including $13.6 million at Southern Health, $7.9 million at Alfred Health, $8.5 million at Eastern Health and $8.4 million at Melbourne Health.

Federal Health Minister Tanya Plibersek said overall federal funding for hospitals was increasing. She accused Mr Davis of trying to create a ''smokescreen'' to distract from his government's budget cuts.

Victorian Healthcare Association chief executive Trevor Carr said hospital chiefs were becoming increasingly concerned about the cuts.

''They are all struggling to comprehend how they can be expected to find this cut without it affecting service delivery,'' he said. ''There is no fat left in the system in Victoria as a result of years and years of various efficiency cuts, therefore services are going to be affected and front-line staff will be cut.

''This is equivalent to closing 440 beds for the next six months, or [cutting more than] 21,000 elective surgeries. They are big numbers.''

Victoria's elective surgery waiting list reached 46,131 people at the end of June - up from 37,194 in June 2010 under Labor.