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Seething federal pollies hand back the hospital cuts that shouldn’t have happened…

The ‘blame game’ between Federal and State Health Ministers reached a new low overnight with Victorian Premier Ted Baillieu announcing that he had received ‘an extraordinary threatening letter’ from the Prime Minister which was apparently ‘accusing him of being unable to run the health system.’

Federal Health Minister Tanya Plibersek has given a scathing interview today announcing that she could ‘no longer allow the Victorian Government cuts to continue to affect patients in this way.’ So with gritted teeth and as much charm as she could muster, she has announced that the $107m budget cut for Victorian hospitals would be forestalled this financial year and the money taken from other Federal grants to Victoria.

From where I sit, as a humble clinician at the coal face of the system, this is about as graceless and humiliating a backdown as you could get. It is also a well-deserved one. Anyone who knows anything at all about running hospitals could have told you that with public money as scarce as it is, there are rooms full of very motivated people managing budgets down to the last dollar. Hospital administrators are obsessed with tracking how money is spent. To try and force such a big clawback through in the middle of the financial year was madness. To even try shows how out of touch they must be with conditions on the ground.

Let me give some examples. Elective surgery lists have been streamlined, remodelled and redesigned again and again so that cancellations due to bed unavailability can be minimized and hospital stays shortened. lists are planned well in advance, and surgeons are kept as busy as possible. Many surgeons have their leave planned for them, and adjusted minutely to ensure targets are kept on track. Imagine then having to tell them that for the next 4 months they will not have anything like full lists. Either the surgeon has to sit around and get paid for doing nothing, or they will go and find some of the work that beckons in abundance in the private sector. I know what I’d probably do.

Once the surgeons have found more work to do in other theatres, it is very difficult to get them back into the public hospitals. It relies hugely on the goodwill of the medical and surgical specialists concerned. Suddenly moving the planning goalposts in the middle of a financial year could have repercussions for elective surgery for months to come, and some of these specialists may be permanently lost to the private sector.

Now think about the nurses and allied health staff. Short term variations in ward workload are usually gotten around by forcing staff to take leave or not replacing sick staff. But bed closures are not actually cost savings unless nurses are not being paid, so sacking some or not employing casual staff is a given. Slashing elective operations like joint replacements is cost-effective in the medium term as rehabilitation staff like physios and occupational therapists can be dispensed with or their leave simply not covered. Then when you get some money again a few months later, you may have to deal with re-employing people who you just shafted badly a few months earlier, because they are the only ones with the skills and experience you need. They, too, may have departed the public system altogether in search of more secure employment.

So faced with such an abrupt and unexpected budgetary cut, what would you do if you ran a hospital? You would simply have to put off operations, close beds and lay off staff, and hope like hell that they came back to you when things picked up. There is no other way it could have been done to produce those savings in such a short time, with no preparation.

Nobody argues with the notion that health costs must be contained, and public money must be well-spent. Our health system is indeed needlessly complicated by Federal-State relationships and even by interstate rivalry. But the time and place to make big cuts is in the budgetary cycle so that these monolithic organizations can be allowed the chance to make good decisions. They need to be able to renovate, not amputate their services.

So when hospitals responded in the way they had to, it created a predictable and mighty backlash. One wonders what else Minister Plibersek thought might have happened? Certainly everything I’ve read from hospital executives in the media is consistent with my reasoning above. Any of them could have told the Feds what a bad idea this was, and what it was going to force hospitals to resort to.

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