Latrobe hospital finances healthy, audit report finds

Latrobe Regional Hospital is at a low risk of financial sustainability worries, an Auditor General’s report has found.

The ‘Public Hospitals: Results of the 2013-14 Audits’ report, tabled in Parliament on Wednesday, indicated many of the state’s public hospitals had significant financial risks that needed addressing.

At the end of June 2014, 12 hospitals across the state were only able to fund seven days or less of their operations from available cash-holdings.

LRH was not among them, recording more than 53 days of cash available and an average of more than 40 since 2010.

“Not everything is funded appropriately, so you have to have a little bit in reserve to do the extra things that you want to do,” LRH acting chief executive Amanda Cameron said.

“It’s about having the capacity to provide maybe extra equipment, or staff over and above (what the government would fund).

“If we didn’t have that extra little bit, we wouldn’t be able to increase the number of operations that we’ve done in the organisation, which makes a great service for the community, because they’re getting their surgery in a timely fashion.”

Ms Cameron said the hospital’s financial position was the result of a series of strategies, including tight limits on who has the authority to approve amounts of spending.

“Things don’t just get ordered, things have to be approved appropriately,” she said.

“We have a very flat organisation structure, we don’t have a huge corporate structure, there’s only four directors and the CEO, so that also helps.”

Ms Cameron said spending was focused on clinical aspects of the organisation and non-clinical areas were run “pretty lean”.

“We also have pretty tight internal processes, checks and balances and our auditing processes,” she said.

The report also found the hospital had the ability to replace its assets and infrastructure.

LRH is about to embark on a major expansion, with construction of the $73 million project due to start in September.

It will include an extra 17 emergency department beds, two day rooms for endoscopy procedures, a cardiac cathaterisation lab – decreasing the need for patients to go to Melbourne for procedures requiring a heart catheter – a short-stay unit and acute ward.

While the project has been funded by the State Government, the hospital’s director of corporate services Gary Gray said once opened, the new facilities could initially throw up financial challenges.

“There’ll be some risks to us in terms of being able to maintain the level of what financial efficiencies we’ve got,” Mr Gray said.

“(For example) there’s a new cathaterisation lab and there’s an emergency department to expand, so there’ll be an outlay to support that, but there won’t be an immediate increase in volumes to pay for it.”

However, he said LRH’s current financial position meant it should be able to weather some of that risk.

LRH’s neighbour to the east, the Central Gippsland Health Service at Sale had 6.73 days of cash available at the end of June, while the West Gippsland Healthcare Group at Warragul had more than 33 days, according to the Auditor General’s report.