The peak body representing Victoria’s public hospitals remains concerned with reports that hospitals are being urged to find back-of-house efficiencies, as the gap between health funding and the true cost of delivering services continues to widen.
VHA CEO Leigh Clarke said that hospitals have been left with a structural deficit following many years of funding not keeping up with the costs of delivering services. Ms Clarke said that just as inflation continues to hurt families, the cost-of-living crisis is having very real impacts on the ability of Victoria’s hospitals to run their operations sustainably and deliver basic services.
‘Essentially, public health services are not being funded in line with the real costs of delivering services – costs which are increasing,’ Ms Clarke said.
‘Without addressing that structural deficit, any further decreases to funding will ultimately be borne by health services and flow onto the delivery of frontline functions, including clinical,’ she said.
Ms Clarke said that hospitals were being asked to find efficiencies at a time when the true cost of delivering services continues to skyrocket.
‘WorkCover premiums have risen by 40% in a single year and other basic operational costs continue to face increases. Added to that you have a perfect storm as health services respond to an ageing population and increasing demands for care, all while working with a variety of other complex challenges like workforce shortages,’ she said.
Ms Clarke said that any cuts to health services would place pressure on an already stretched and fatigued health workforce, which could lead to higher rates of attrition for essential workers.
‘We need to recognise that every hospital employee plays a critical role in service delivery. If you aren’t providing frontline clinical services, you are supporting someone who is. All of these people have just led us through a once-in-a-100-year pandemic. They have persisted through the most difficult of circumstances, while operating in a challenging fiscal environment that existed well before the pandemic.’
‘Health services can’t be expected to find efficiencies because of a structural failing of the current health funding mechanism. We need to recognise that we are operating in a high inflationary environment which has worsened an already growing structural deficit in Victoria’s health budget.’
Ms Clarke acknowledged the Victorian Government was operating under a tight fiscal environment, creating a challenge for the ongoing sustainability of health services. She noted however that it is simply not viable for health services to be asked to deliver the same services with less resources and less support.
‘Victorians and our health system need to be protected from the rising pressures of inflation and increasing cost of living,’ she said.
‘The VHA urges the Victorian Government to re-consider its approach to the indexation of health service funding. Overall funding for Victoria’s healthcare services must match inflation to meet rising demand and deliver quality care, in addition to addressing the structural deficit that our services cannot control.’
‘If we don’t make a change, the gap between funding and the cost of delivering care will only continue to widen.’
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