The Victorian Healthcare Association (VHA) has warned that critical areas such as staff health and wellbeing cannot afford to go unfunded in this year’s State Budget. 

This comes in response to concerns that health services are re-allocating funding from other areas of the budget to fund essential investments in the health and wellbeing of their workforce. The VHA is aware that in several instances, this has led to essential back-of-house positions no longer being backfilled where staff have left the organisation. This includes roles in administration, finance and other support staff that play an important role in the quality of patient care. If action is not taken to address these budget deficit challenges, the VHA is concerned that there will be staffing cuts and further impacts to services. 

VHA CEO Leigh Clarke said that the cash reserves of Victoria’s health services, often used to invest in education and training programs, are at reported lows and budgets are barely staying in the black. She said that this represents a turning point that creates a significant risk for the ongoing viability of the health sector. 

‘During the pandemic, additional funds were provided to the sector to allow our health system to navigate the most difficult of circumstances. Now, that extra funding has dried up, even though the true cost of delivering healthcare is increasing,’ Ms Clarke said. 

Ms Clarke said that Victorian health service employers will not compromise on investing in the health and wellbeing of their staff. This means that some difficult decisions have had to be made around the services they are able to fund.  

‘While the worst of the pandemic has passed, there are long-standing issues within Victoria’s public health system that need to be addressed to support workforce wellbeing. The reality is that there is no money to invest in critical areas like health and wellbeing, requiring health services to pull funds from outside sources to meet this pressing need,’ Ms Clarke said. 

‘Health services have already been asked by the Victorian Government ahead of the budget to find back-of-house savings. Any further cuts in this year’s Budget will have significant consequences for the delivery of care.’ 

She said that WorkCover premiums are one of many escalating costs placing a strain on the ability for health services to invest in critical areas. This includes education and training programs that could provide the health workforce with the skills and confidence to keep them safe and well at work.  

‘The problems associated with the WorkCover scheme will not be solved overnight, but a continued lack of government investment in health and wellbeing doesn’t make any sense. Not only does this fail to build the capacity of an already fatigued workforce, but it’s also placing upward pressure on WorkCover premiums – which are at risk of seeing another rise this year,’ she said. 

Ms Clarke said that unfunded costs have created a structural deficit in health service budgets – where the true cost of delivering services has not kept pace with funding. 

‘The VHA urges the Victorian Government to adequately fund all health services in this year’s State Budget to keep their employees healthy and safe at work. Until we address the structural deficit, more essential services may continue to go unfunded, which will only add further to the budget crisis facing our health system.’  

Background – health and wellbeing  

All healthcare workers are entitled to a mentally healthy workplace. But to achieve this, staff working in health services need to be equipped to manage the complexities of working with vulnerable people, or agitated clients and families waiting to access care. 

While training and education programs to keep staff safe and well are key to staff retention, this cost is not met by the funding a health service receives to provide care. Health services are funded according to the demand experienced in their communities (i.e the number of patients that are expected to present to hospital). As a result, health services rely on any surplus income or cash reserves to invest in education and training programs for their workforce.  

More investment is required to support training and development for the health workforce, to build the capability and resilience needed to manage and de-escalate aggressive patients and their family members. This will ensure health services are not relying on ‘last resort’ measures such as security personnel.  

Some of Victoria’s major metropolitan hospitals have also employed security personnel, who can have a presence in emergency departments, car parks and waiting rooms where conflict may escalate regularly. However, health services are not funded to provide security services for staff and patients. In this financial year, the VHA understands that some health services have subsidised the cost of security through other funding sources where staff are raising concerns about their safety and wellbeing. 

Improved health outcomes for the community will come about from a stronger focus on workforce safety and wellbeing, which also promotes workforce retention. 

One regional health service with a small team is running a deficit of around $100,000. They made a decision to introduce a security guard during COVID as they were concerned about the risk of visitors being disruptive if they were turned away for not wearing a mask. The service also introduced CCTV cameras to support safer working conditions for staff, relying on community fundraising to meet this cost. The service feels they are unable to discontinue the security presence as staff have grown accustomed to having this support. 

Background – structural deficit  

No single factor is responsible for growing the gap between revenue and the true cost of delivering healthcare. However, unfunded costs such as education and training wellbeing supports are a contributing factor to the gap between the revenue provided to health services, and what it actually costs Victoria’s health services to deliver quality healthcare.  

Hospitals have been left with a structural deficit following many years of funding not keeping up with the costs of delivering services.  

VHA’s statement - Health sector must be safeguarded from unsustainable rise in premiums, provides further background context on the impact of rising WorkCover premiums – a contributing factor to the structural deficit.