Liberal government in South Australia calls in cost cutters in 2018 but state health spending 2021-22 hits $7.4 billion
A patient in a PET (positron emission tomography) scanner at Royal Adelaide Hospital – part of the Central Adelaide Local Health Network targeted for cost cutting under the state Liberal government from 2018.
Consultants Korda Mentha were called in by the new South Australian Liberal government during 2018 to cut the losses in the state’s biggest health network, including the Royal Adelaide and Queen Elizabeth hospitals, as it faced a $375 million cost blowout.
The $20 million extended contract for Korda Mentha to take over as administrators of the Central Adelaide Local Health Network was suspended in 2020 during the Covid-19 pandemic and resumed in 2021. Korda Mentha were previous successful consultants for the Whyalla steelworks.
Since 2018, hundreds of jobs, of out the state government’s SA Health department’s 41,000-strong workforce, had been shed by the offer of voluntary separation packages, mostly from the Central Adelaide network.
The 2021-22 state budget included $393 million over four years to “recast SA Health’s financial improvement targets”. The state treasuer Rob Lucas said some South Australian hospitals were operating 25% above the average cost of other Australian hospitals for the same services. He said there would be an extra 258 South Australian Ambulance Service staf, and 1,000 extra health employees in the Liberal government’s 2021-22 budget, compared with the last budget of the previous Labor government.
Health spending rose to almost $7.4 billion for 2021-22, compared with the forecast of $6.9 billion in the previous year’s budget. Health spending was far more than the next biggest item, health ($4 billion), facing the challenges of record ambulance ramping and clogged emergency departments.
The government’s four-point plan to address ramping was to expand emergency department capacity, increase health staff, ease demand for emergency department services with alternatives such as home care, and ease the hospital bed block by improved discharge protocols and transferring metropolitan patients to peri-urban hospitals in peak times.
More mental health beds in hospitals and crisis centres, support for children and people with addiction, and training to grow the workforce were allocated $160 million. Other key points included: $20 million to fast track elective surgery to reduce the backlog linked to the pandemic; $86 million to fasttrack the Covid-19 vaccine rollout; $149 million for the public health response to the pandemic; $3 million for the meningococcal B immunisation of babies and young people.