Vaccinating the nation: state by state breakdown

Health emergency as hospital care costs outweigh cash

 

Queensland's hospital budget sheets are bleeding red, with the state's health services racking up an $82 million operating loss last year as they spent more than they had on patient care.

But the state's health boss says it's the fault of the COVID pandemic for biting $70 million out of bottom lines.

In an "ongoing decline in financial sustainability", 11 of the state's 16 Hospital and Health Services (HHS) recorded losses in 2019-20, despite just one planning for a loss, a probe by the Auditor-General found.

Brendan Worrell found the cost of delivering health services was now more than the funding received from governments.

 

Health care is now costing more than Hospital and Health Services are funded for.
Health care is now costing more than Hospital and Health Services are funded for.

It said HHSs receive $5033 per "Queensland weighted activity unit" - which is a measurement of health activity delivered - but the average cost of delivering care was $5161 per unit.

HHSs "have not been able to deliver sufficient savings to close the gap" despite efficiency and productivity dividends, he wrote.

And he found five HHSs "may not have enough cash" to pay for necessary expenses as the department was forced to give nearly $9 million in cash advances last year so three could pay their bills.

HHSs had their overdraft facility with Queensland Treasury increased from $100 million to $200 million to allow them to access cash to pay suppliers and continue operations in the event of temporary cash shortfalls.

North West HHS used that overdraft facility to access $3.35 million.

Increasing employee expenses funding pay rises, overtime, allowances and additional staff had a large impact, increasing by 8 per cent to $778 million and now making up 68 per cent of total expenses.

"While not all of this increase was a direct result of COVID-19, it did contribute to

HHSs' increasing net costs and declining financial results," the report said.

Operational and financial challenges would also come as employees who banked leave during COVID took leave in 2021 and HHSs would "need to ensure they have appropriate capacity to maintain health services" then.

Mr Worrell also identified a "significant future challenge" in funding building maintenance, with about $800 million in anticipated building maintenance looming.

Queensland Health Director-General Dr John Wakefield said he recognised continuing challenges around financial sustainability but largely blamed COVID.

He said increased staff costs related to the pandemic and cancelled surgery that impacting revenues had cost an estimated $70 million.

 

Queensland Health Director General John Wakefield (AAP Image/Dan Peled)
Queensland Health Director General John Wakefield (AAP Image/Dan Peled)

But Mr Worrall's report found an "ongoing decline in financial sustainability" and that seven HHSs had now made an overall loss since they were formed in 2012.

A government spokesman said the majority of HHSs were expected to deliver balanced budgets this year.

Originally published as Health emergency as hospital care costs outweigh cash



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