A lack of financial sustainability may force one-third of public hospital beds in Victoria to close, according to the auditor-general.
Released yesterday (November 9), the 2011 Victorian auditor-general's report into public hospitals found that 29 out of 87 hospitals audited did not meet the Australian Accounting Standards "going concern" test at the end of 2010-11 financial year and may require a government guarantee to survive.
The report attributed the closure threats to many public hospitals' inability to replace assets, as well as the constant occurrence of cash shortages.
Results show that 61 per cent of public hospitals – including 25 major metropolitan and regional facilities – had cash holdings equivalent to less than 30 days operating expense outflows.
The number of those holding less than seven days worth of operating cash flow had risen to 24 – seven up on the previous financial year.
Private health insurance offers policy holders the opportunity to avoid public bed closures and growing waiting lists by attending a private hospital.
Currently, the government's funding model looks at the sector as a whole – rather than at each hospital's needs – sometimes leaving hospital boards to support themselves in terms of financial management.