Victoria's public hospital lobby says the state government is seriously endangering its plans to reshape the health system by slashing hospital budgets. or signup to continue reading Health Minister Mary-Anne Thomas will soon decide whether to amalgamate health services across Victoria, but she has just slashed hospital budgets throughout the state in a bid to control the Health Department's spiralling finances. The Victorian Healthcare Association - which represents most of Victoria's public hospitals - said the austerity drive raised "serious questions" about how the state could manage the reforms without making the system worse, rather than better.
"We're not clear how the Victorian Government intends to achieve governance reform in this incredibly tight fiscal environment," VHA chief executive Leigh Clarke said. "When you consider the cost cutting measures our member services are facing, when combined with the rising cost of service delivery - there is a serious question about how reform can be done well." The architect of Victoria's hospital funding system, Stephen Duckett, echoed the warning and said he was shocked by the government's approach.
Ms Thomas has consistently denied hospitals have been hit with budget cuts in recent weeks, But Professor Duckett said health services were facing "impossible" cut backs. "Some of the budget cuts are too big to be done in one year, so it's just crazy that that's what they're trying to do," he said. "It's just impossible for a service to do it.
Why on earth would you put an impossible target on an agency? "Maybe they're saying, we are going to make these big budget cuts and that will force you into an amalgamation because that will be the only way of doing it." ACM revealed on June 13 the government had sent out "modelled budgets" to the state's hospitals, with . I just don't think they have thought about how it's going to all hang together.
Some health service CEOs told ACM they feared the "brutal" budgets were a tactic to soften them up for amalgamations. But Professor Duckett said there was no way the government could manage amalgamations and cut hospital costs at the same time. "That approach assumes there are no transition costs in an amalgamation when there clearly are," he said.
"One of the purposes of an amalgamation is to reduce duplication in management overheads for example, in which case you're going to have to pay redundancies. "So even on that simple basis - let alone all the planning you'll have to do - it's still going to cost more. "I just don't think they have thought about how it's going to all hang together.
" Professor Duckett led an independent review of the Grampians Health amalgamation that merged Ballarat Base Hospital with several services across western Victoria. It found the amalgamation achieved positive results, but a lack of adequate planning and funding were serious impediments. Ms Clarke - the VHA chief - said any major reform like amalgamations would require significant extra funding, but instead the government was cutting costs.
She said many regional health services were still using paper record systems, so just to standardise record-keeping would require significant extra IT and HR resources across the state. She said none of these services had been funded to upgrade their systems and the VHA worried about the fate of regional healthcare in a poorly managed reform. "There are many changes that need to be made if we are to achieve a fairer and more equitable healthcare system, including policies that attract and retain workers in regional areas," Ms Clarke said.
"We would also point out the risks to loss of leadership if reform is not managed properly, along with further fatigue of the workforce." Ms Thomas has said for several months no decision has been made on potential amalgamations, but ACM understands Treasury and the Health Department had been operating on the assumption the reforms would proceed. But government sources said critical media coverage, leaks from hospitals, and protests from some regional communities and health services had raised the chance the reforms would be shelved.
Professor Duckett said the Grampians Health experience should be a cautionary tale. "What we said in the Grampians Health paper is there has to be a lot of serious planning for this to all work," he said. "You have to build trust, you have to get everybody onside, you have to plan it and invest in standardising all the systems.
You have to do all those things for amalgamation to work." The Grampians Health merger was just a single amalgamation. The proposed statewide merger would create 11 more amalgamated services.
Ms Clarke said it was a huge task for a government also trying to get its health budget under control. "The VHA believes the Victorian Government must strongly consider whether now is the time to be undertaking large-scale reform, particularly if it continues to pursue a course of action that looks to make significant cuts to the publicly funded healthcare system," she said. "Both actions occurring simultaneously could be at the expense of Victorian patients.
" Correspondent covering key issues across regional Victoria, based in Melbourne. Correspondent covering key issues across regional Victoria, based in Melbourne. Advertisement Sign up for our newsletter to stay up to date.
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