Budget slashed: government defends putting health service under the knife

The Health Department sent out summaries of their "model budgets" for the 2024-25 financial year on June 12.

Many rural services had their funding slashed by millions of dollars, while others faced cuts of just $120,000.

A department spokesperson on Wednesday, June 19, said the Victorian government is investing "around $20 billion" in health services over the next year.

"With this kind of major investment and continued rising health costs, there is a need for a higher level of fiscal accountability across the entire sector and we're working with all public health services, including Albury Wodonga Health, to see where we can be more efficient and to ensure funding is focused on frontline care," the spokesperson said.

"(We're) also ... making a return to pre-COVID funding models that aims to ensure services can plan further in advance and better manage cash flow, while reducing deficits and reliance on top up funding."

Last week, AWH chief executive Bill Appleby informed staff via email that the hospital must find ways to save $3 million in its 2024-25 budget.

The email stated that the hospital must break even next financial year, implementing measures such as no wage increases, hiring restrictions on locums, strict rostering, and prohibiting the use of external consultants without Health Department approval.

Additionally, there will be no new full time equivalent (FTE) hires, and existing new roles will be reviewed.

The budget cuts are the third successive financial assault on health services in a matter of months.

The government has already forced services to make significant administrative cuts through mandatory financial management improvement plans, and more recently imposed strict cost containment measures with an effective hiring freeze.

The Border Mail posed several questions to the Health Department:

The department did not disclose the exact funding cut to AWH. However, a spokesperson said "(AWH) will not be using bequests or general fundraising contributions for day-to-day operations".

"The intent of the FTE expenditure cap and other measures is to help put downward pressure on this practice across the entire system, to manage and reduce expenditure in these areas," the spokesperson went on to say.

"If Albury Wodonga Health needs an exemption to any of these measures, for example if they need to spend more than their average FTE expenditure, they are able to make a request to the department and have it reviewed.

"The external consultancy restrictions are for any non-medical professional services or engagements that aren't essential to supporting business as usual hospital operations."