Federal Government slashes $53,000 from hospital budget
THE Federal Government has delivered a pre-Christmas shock toCastertonMemorialHospitalby announcing it would slash $53,000 in funding from the hospital’s 2012-13 budget.
Overall, the Federal Government has cut $107.6 million toVictoria’s health services in what Member for Wannon Dan Tehan says is “all about (Prime Minister) Gillard and (Treasurer) Swan placing their need for a surplus above the health needs of south-west Victorians”.
CMH CEO Owen Stephens said the funding cut of almost 3.5 per cent to the hospital would affect the delivery of services to the community.
“The 2012-13 financial year started out as very tight budget year with CMH seeking to fully account for on-going budget reductions from the State Government in real terms and attempting to manage and budget for a host of other day to day operational rising costs,” Mr Stephens said.
“Now, on top of these initial finance and budget hurdles, we have been caught up in the Federal Government’s objective of returning a budget surplus, although so minute in relation to the overall national accounts, but the effect of the cuts will not be so minute for an organisation of our type and size in attempting to provide a broad range of services to our community.
“The effect of the federal budget reduction in grants to the state under the new National Health Reform structure will indeed see an additional $53,000 cut from our budget by the state,” Mr Stephens said.
“This has only just been advised to us six months into the financial year, and we are expected to just absorb such a cut, obviously services, personnel and all operational expenditure will now have to be reviewed fully again after we have already spent much time trying to establish a budget that we could achieve back in July.”
Mt Stephens said the hospital had progressively found it harder to maintain sound and controlled financial management when governments cutback funding.
“The following factors have been at play against CMH’s usually sound and controlled financial management;
- For each of the last two years a State $90,900 productivity savings cut to grants;
- Over-inflated activity targets with dollars attached, which we cannot possibly achieve and so have to pay back the funds to the State at the end of the year. In 2012-13 year we will have to repay about $170,000. A media releases from the Department of Health made it sound like CMH was getting another $142,000 but we cannot possibly achieve the activity targets set and have to pay it back;
- Commonwealth Aged Care funding subsidies for residents in Glenelg House have been reduced under a new calculation model for care needs and this will cut around $36,000 of our annual budget for this area of operations;
- Federal Government cuts to the State under the National Health Reform structure will cut a further $52,000 from our budget half-way through the financial year;
- Utility costs, as most households have felt, also cut deeply for us this year with an increase in expenses of around 7.5 per cent for power and water use and services a staggering 144 per cent during the same period last year. We are not using any more it is just the statutory charges and price hike per unit of use. Glenelg Shire waste disposal and landfill has also spiked exorbitantly; and
- Ambulance patient transfer costs have also hit hard with issues around the costs of inter-hospital transfer of patients from CMH doubling or tripling, dependant on the ambulance service treatment of the transfer. We have no control on this scenario.
“So, all up, CMH started the financial year with a meagre 2.12 per cent increase on its global budget to now looking at an overall budget cut for 2012-13 of 3.5 per cent,” Mr Stephens said.
“That is a net turn-around from the end of 2011-12 of nearly 5.50 per cent against our global budget.”
Mr Stephens and board of management chairman Graham Sheppard met with the Federal Shadow Minster for Health Peter Dutton and Dan Tehan on Tuesday evening to discuss the above issues and others in relation to our rural community’s health and community service needs for the future.