Patients will wait and suffer longer as a result of massive public hospital investment losses revealed today by the Auditor-General, Shadow Minister for Health David Davis said.
The Auditor-General revealed that Victorian public hospitals had suffered a catastrophic loss on investments of more than $35 million in 2008-09, up from an already unacceptable $10.3 million the previous year.
Critically, the Auditor-General said that this was only “in part” a consequence of the global financial crisis.
In a scathing assessment of the Brumby Government’s performance, the Auditor-General reported that: “The former Department of Human Services previously advised that draft investment policy guidelines for public hospitals had been developed some time ago, but have not been promulgated to the sector”.
The Auditor-General found that the relevant Acts of Parliament do not restrict the type of investments that can be made by public hospitals, including higher-risk investments, such as collateralised debt obligations (CDOs).
Mr Davis said John Brumby’s failure to put guidelines in place has meant huge and unnecessary hospital investment losses. Mr Brumby and his Health Minister Daniel Andrews had permitted Victoria’s public hospitals to engage in all sorts of high risk and ultimately self-defeating investments despite the fact that:
• 80 per cent of Victoria’s public hospitals had not undertaken benchmarking analysis of their investment performance, and
• 83 per cent had not even commissioned internal audits of their investment management practices.
“There can be no doubt that, with tens of millions of dollars no longer available for the treatment of patients in Victoria’s public hospitals, patients will suffer,” Mr Davis said.
“People waiting for dentures will have to wait longer as a result of the losses at Dental Services Victoria, whose ratio of impairment loss to other financial assets is at a massive 61 per cent.
“There is no doubt that patients waiting for hip operations and other elective surgery at Ballarat Health will not get their operations as quickly as they should or would have.
“There is no doubt that people at the Royal Women’s and the Royal Children’s will also suffer because of the Brumby Government’s financial mismanagement of our hospitals.
“That financial mismanagement has got to be squarely sheeted home to the risky investments supported by the Brumby Government, the failure to put in place proper management techniques and guidelines and the failure of many of our public hospitals to have investment committees that oversee these risky investments,” Mr Davis said.
See attached excerpt from the Audtor-General’s report Public Hospitals: Results of the 2008-09 Audits Public Hospital Investment Losses for 2008 and 2009
