Victorian health crisis: Nearly half a billion dollar emergency funding to cover hospital staff salaries

MedTech & Diagnostics News: Victorian Health Minister Mary-Anne Thomas has been compelled to seek “urgent” approval for a $422 million bailout of the state’s hospitals, as revealed by Freedom of Information (FOI) documents obtained by the state opposition.

In a letter to Victorian Treasurer Tim Pallas, Thomas highlighted the pressing need for “urgent payments” to cover payroll and creditor obligations.

The document, dated June 9, 2023, warns that without additional funding, “Health Services will be unable to make payroll payments to employees and will have insufficient operating cash to pay creditors.” It further notes the potential for “reputational risks for individual Health Services, the public health system, and government.”

The financial documents disclose a troubling picture: Victoria’s 22 health services are collectively in deficit, with Melbourne Health, which operates the Royal Melbourne Hospital, facing a staggering $104 million shortfall. Other major health providers such as Austin Health, Alfred Health, St Vincent’s Health, and Monash Health report deficits ranging from $50 million to $34 million.

Shadow Health Minister Georgie Crozier criticised the situation as “yet another example of Labor’s financial mismanagement,” emphasising its detrimental impact on frontline health services.

“Is it any wonder why our health system remains in crisis under Labor when hospitals are running out of money and cannot afford to pay nurses, doctors, and staff on time?” Crozier questioned. She called for the Allan Labor Government to provide “funding certainty” to improve patient care and stabilise the health system.

In response, Minister Thomas defended the situation, attributing the financial strain to “a range of unexpected costs” exacerbated by the lingering impacts of COVID-19 on healthcare delivery expenses.

In August, an additional $1.5 billion was allocated to hospitals for one year, on top of the existing $8.8 billion budget. Premier Jacinta Allan has since advised health services to reduce spending to pre-COVID levels.

Opposition Leader John Pesutto described the situation as “dire,” questioning the extent of worsening conditions in the following financial year.

“The health minister had to seek an urgent injection of nearly half a billion dollars to prop up our public health system, and in particular our public hospitals, that’s not good enough,” Pesutto asserted.

“It is so dire that health services across the state are unable to pay their bills and to pay the salaries of doctors and nurses.”

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