There are fears among Victorian hospitals that they will have to close beds, delay elective surgeries and sack staff as the state government works to rein in post-pandemic health spending amid its debt woes.
Despite both the premier, Jacinta Allan, and the health minister, Mary-Anne Thomas, dismissing such measures as “speculation” and “fearmongering”, several major hospitals have confirmed they have imposed hiring freezes ahead of submitting their annual budgets to the health department.
The opposition leader, John Pesutto, has described the situation as “alarming” and warned “lives will be put at risk”.
But what’s actually going on? Here’s what we know.
What is happening at Victorian hospitals?
On Wednesday, Western Health – which operates five hospitals across Melbourne’s west – was the first health service to announce it had imposed a temporary hiring freeze and was preventing travel.
A spokesperson said it was working with the Department of Health to agree on a final budget, and that the interim measures were “aimed at having minimal impact in providing best quality treatment, care, research and education”.
Meanwhile, in an email to staff, Northern Health – which runs the Northern hospital at Epping and three other hospitals – said they had also introduced a “temporary freeze” on recruitment and recognised the feelings of “uncertainty and stress”.
“This decision is necessary as we strive to reduce our operating deficit for 2024-25,” the email, seen by Guardian Australia, said.
Will others follow?
The Herald Sun on Thursday reported others were considering similar moves. It said Monash Health, which runs Monash Medical Centre and Monash Children’s hospital, among others, was looking at shutting beds and cancelling all weekend elective surgeries.
This was not confirmed by Monash Health. In a statement to Guardian Australia, it said: “Monash Health’s annual budget is currently being developed in close consultation with the Department of Health to deliver the care our community needs.”
The Herald Sun has also reported the Alfred and the Royal Children’s hospital could also be affected by budget pressures.
Has the government cut hospital budgets?
The Victorian Healthcare Association says there have been several “cost containment measures” tightening the squeeze on hospitals.
This began at the end of 2023, when the department asked hospitals to revise their budgets and find savings across non-clinical staff and services. In March, small rural health services were asked to do the same.
In May’s budget, the government announced $8.8bn in funding to “kickstart a change in the way our hospitals are funded, so they can more effectively and efficiently deliver world-class care – and plan for the future”.
Some of this funding was “top-ups” paid by the government to cover deficits recorded by more than half the state’s public hospitals.
That same week, Thomas wrote to hospitals to inform them no further funding would be provided beyond what was committed in the budget, and urged them to take measures to reduce deficits.
Allan said on Thursday that it was “standard practice” for hospitals to “plan for the year ahead”.
She said there was no confirmation of recruitment freezes because hospitals were yet to submit their draft budgets, due at the end of the week, to the health department.
“For emails to be sent out saying certain things that we’ve seen in the last couple of days, that does not reflect where discussions are between hospitals and the department,” she told reporters.
“Any speculation is just that – speculation and scaremongering, particularly by Liberal politicians.”
Thomas told ABC Radio Melbourne that her “clear message to health services” was that there should be “no impact to patient care”.
She said she had asked hospitals to cut “waste and duplication”, including in executive, and communication and marketing departments.
“There are no directions to hospitals to cut or close any care,” she said.
What else is the government doing with the state’s health system?
In September last year, an expert advisory committee was set up to see if some of the state’s health services could merge.
The health departmenthas received their final report and is considering its recommendations, though Thomas has stressed “no hospitals will close as a result”.
She told parliament last month that the state has 76 health services – “twice as many as the rest of Australia combined” – that are all “competing against one another for staff” and “driving up costs”.
“We need our health services to work better together to manage their staffing in a way that is cost effective and focused on the delivery of frontline health care,” she said.
