REVELATIONS this week that Victorian hospitals share a combined debt of $1.46 billion have caused alarm that the state’s health system is being run on a credit card.

The Victorian Healthcare Association (VHA) has warned that Victoria’s health services cannot continue to operate balance sheets in the red without consequences on the delivery of care.

VHA chief executive, Leigh Clarke said that it’s clear that Victoria’s health services were operating in an incredibly challenging budget environment, with significant risks to both non-clinical staff and services.

“The VHA remains very concerned about the size of the deficits that our health services are carrying across the state. Our members are four months out from the financial year and still don’t know when the money will come,” Ms Clarke said. 

Ms Clarke warned that unlike private companies who are rewarded for responsible fiscal management and can carry over funds into the new financial year, many public healthcare services were subject to the Victorian Funding Recall Policy which could lead to a recall of any savings achieved at the end of the financial year. 

“As a result, we know that health services have limited equity for difficult times and many operating budgets are in the red.

“With cash reserves at reported lows, health services have been forced to rely on government ‘top-ups’ … but over the years, these arrangements have kept the doors of a service open, but it’s clear Victoria’s services can’t go on like this any longer.”

Lowan MP Emma Kealy opposed the recent merger that created Grampians Health by amalgamating Ballarat Health Service (BHS), Wimmera Health Care Group, Stawell Regional Health and Edenhope and District Memorial Hospital.

“Not only is Grampians Health $60 million in deficit after just six months, but we’ve lost local health services, waitlists are longer than ever and staff morale is very low,” she said.

Ms Kealy raised concerns about regional hospital mergers in a 90-second statement in the Legislative Assembly last week that should more of western Victorian services merge, “there is a great risk we are going to see the same catastrophic failures in health that we have seen with Grampians Health”.

“With the Portland hospital CEO position, again we do not know what is happening there,” she said.

“Labor pushed Ballarat Hospital to take over hospitals in the west of the state and it’s been nothing short of an unmitigated disaster for locals outside of Ballarat.

“Labor can’t manage money and can’t manage the health system and it’s Victorians paying the price.”

The Victorian Government’s Health Services Plan that was open to submissions between December 2023 and January 2024, specifically looked at how public health services can better work together.

A series of workshops with health services were held across Victoria to discuss proposals, during which some health leaders raised the idea of amalgamations.

This has been referenced in subsequent discussions, however, “there are no predetermined outcomes” a government spokesperson said.

Western District Health Service (WDHS) and Casterton Memorial Hospital dual chief executive, Rowena Clift said WDHS prided itself on a legacy of sound financial management over many years.

She said however, like many other Health Services, WDHS was not immune to the impacts of the ongoing financial pressures in the Victorian healthcare sector.

“Despite these challenges, WDHS remains committed to strong financial management, while navigating the increasing demands of healthcare delivery,” Ms Clift said.

“We continue to explore innovative solutions and collaborate with stakeholders to ensure the sustainability of our services and uphold our commitment to delivering the highest quality care to our community.”