A budget-blowout at St Vincent's Hospital Sydney will force staff to find $18 million worth of cuts as external consultants are called in to audit the hospital's services.
The hospital's financial woes blindsided doctors who spoke to Fairfax Media, after a memo from the executive in September celebrated St Vincent's on budget performance in 2016-17 "in the face of extraordinary activity levels".
But in an email to staff earlier this week, chief executive Anthony Schembri said "over the past months our financial position throughout St Vincent's Health Network has been challenged".
"I want to acknowledge that these cost saving initiatives will involve changes being made by our hospital departments," Mr Schembri said.
"I know there will be challenges for many staff, but by working together we can limit the impact and duration to be back on track with our budget sustainability," he said, adding the executive would soon share details about the specific measures they had planned.
St Vincent's Hospital Sydney's executive largely attributes the budget blowout to a confluence of external factors, including activity-based changes to heart/lung funding arrangements, the rising cost of major goods and services like electricity, and tightening of the revenue from privately insured patients. Efficiency or savings measures had been slower than planned to implement.
In a statement, St Vincent's said, "Like other health services, St Vincent's has been confronting a range of issues in recent months relevant to its financial situation, including an unanticipated surge in demand in emergency patient presentations, particularly those requiring hospital admission.
"Accordingly, St Vincent's will be focusing our efforts to deliver services more efficiently, while maintaining our high quality patient care."
Fairfax Media understands the national body governing the hospital, St Vincent's Health Australia Group, has directed the major Sydney tertiary hospital to find $18 million in savings. The hospital's total budget for 2017/2018 is just under $400m.
The hospital has set up a Program Management Office and contracted external consultants to oversee the savings measures.
It is understood that cutting overtime and the reliance on agency workers will be targeted.
But some staff were concerned the cuts could mean job losses and seriously affect the services they deliver.
One service already affected is the hospital's H2M service, which provides dedicated psychological and psychiatric care for people with HIV and hepatitis C.
GPs with patients referred to the service were informed via email that H2M was being "wound down and closed because of severe budgetary constraints" and could not take new referrals effective immediately.
Current patients will be referred to other mental health services, according to the email.
"St Vincent's Hospital Sydney is funded by the NSW government and like every other public hospital it operates within the funding envelope it has been provided," St Vincent's said.
"The hospital is working to ensure it delivers its commitments within the funding parameters it has been given."
