Three external reports on potential savings and efficiencies in Health have been released for public consultation by the South Australian Government.


The reports propose savings including a reduction in health staff and hospital beds through natural attrition and by reducing unnecessarily long stays for patients, rather than reducing health services.


Minister for Health and Ageing John Hill said that while health funding would continue to increase in overall terms, savings were needed in the areas where performance was below national benchmarks.


“Health makes up the largest component of government spending, and we’re proud to have increased spending on public health services by $2.8 billion, or 129 percent, since Labor came to government.


“This investment has led directly to better outcomes for patients, as shown by our ED and elective surgery times which have improved dramatically and are now among the best in Australia.


“However, in the light of a tough global and national economic environment, the State Government has had to make tough savings decisions in all areas and this includes Health.


“In 2011-12 SA Health achieved savings of $64.5m and reduced central administration staff numbers by over 74 full-time equivalent positions plus seven executives.


“Measures currently underway include: reforms and efficiencies in imaging, pathology, pharmacy, mental health, outpatients, departmental staff reductions (through the use of TVSPs and non renewal of executive contracts), and reforms in finance, ICT and workforce management.


“SA Health expects to save a total of $120m a year by 2014-15 from these exisiting measures.


“In addition to this work, SA Health engaged Deloitte and KPMG to review the efficiency of the three metropolitan Local Health Networks – Northern, Central and Southern.


“If all of the efficiency measures in the three reports were adopted, the total additional saving to Health would be $83.1 million a year by 2014-15, bringing the total savings to $203.1 million a year.


“We are now releasing these reports for six weeks of consultation with interest groups, staff and the wider community.


 “The reports’ options for savings include reducing the number of hospital beds by up to 114 beds that would usually be flexed up in busy times and by reducing staff numbers by around 300 full-time equivalents.


“There will be no forced redundancies; I anticipate that the reductions can be met through natural attrition – not replacing some positions as people leave or retire – and by using fewer agency and temporary staff.


“Since 2002, we have employed 4569 (42 percent) more nurses, 1217 (56 percent) more doctors and 1146 (60 percent) more allied health workers.


“Beds will not be closed through a reduction in services as in some other States, but rather through reduced lengths of stay in hospital for patients where appropriate.


“Advances in modern medicine and technology mean that patients need to stay in hospital for much shorter periods of time, which in turn means those beds can be used more efficiently.


“If we were to reduce bed numbers by the recommended 114 by 2014-15, SA’s rate of hospital beds per 1000 population would still be 2.6, which is above the national average of 2.3 beds.


“While I want to consult with staff and the wider community on all of the recommendations in these reports, I can say that the proposal to make Noarlunga Hospital a day-only service has been ruled out as it would be a cut in services and go against South Australia’s Health Care Plan 2007-2016.


“I have also asked SA Health to look at alternatives to the proposed reduction in funding to the McLaren Vale Hospital to achieve better value from the funding that is provided to that hospital.


“Other options for savings include: reviewing the relatively high cost of food services at the Repat and Noarlunga Hospitals, ensuring prosthetics and medications are clinically and cost effective, increasing the cost of admission to the FMC hydrotherapy pool and outsourcing café services at FMC and Noarlunga Hospitals.


“I appreciate that these reports present a challenge, but in the current global financial climate we must all spend within our means and operate as efficiently as possible.


“Over the next six weeks we will consult widely on these reports, listening to the views of staff, patients and the wider community.


“I plan to return to cabinet at the end of this period with a plan of action that will allow us to reduce spending while maintaining standards.”


The Hospital Budget Performance and Remediation reports and information on consultation are available from .