Health network’s external staff costs blow out by $22m

The Adelaide central health network’s spending on external contractors – especially nurses – in the 2018 financial year was more than double its budget, InDaily can reveal.

Nov 23, 2018, updated Nov 23, 2018
The new Royal Adelaide Hospital. Photo: Tony Lewis/InDaily

The new Royal Adelaide Hospital. Photo: Tony Lewis/InDaily

The Central Adelaide Local Health Network’s spend on external agency staff was $44.1 million in the 2018 financial year – more than double its $21.8 million budget.

The revelation is the latest in a series of selective releases to the media of information from the Government-commissioned audit of CALHN’s parlous finances by advisory firm KordaMentha.

The extracts provided to InDaily this morning reveal that CALHN’s negligible budgets for agency surgery and critical care nursing staff blew out wildly – by about 40,000 per cent in the case of surgery nurses, and just under 12,900 per cent in the case of critical care nurses this year.

CALHN had budgeted $10,000 for agency surgical nurses in 2018-19, but spent $3.898 million.

It budgeted $13,000 for critical care nursing staff, but spent $1.687 million.

The overspend was less dramatic in other nursing disciplines, bringing the overall agency nurses spend to 262 per cent of budget.

CALHN also spent 56 per cent more than budgeted on agency medical officers – clinicians – but spent slightly less than budgeted on clinical academics and salaried employees.

The KordaMentha report forecasts that the network will spend $51 million on agency staff use this financial year – $31.3 million above the budgeted amount of $19.8 million.

Agency staff work on a contract or casual basis and are paid 40 to 60 per cent higher than permanent staff.

The full report into CALHN – which runs the Royal Adelaide and Queen Elizabeth hospitals – is expected to be released early next week.

Tonight the FOURTH drop to The Advertiser from the supposedly secret Cabinet document the KordaMentha liquidators report.@StephenWadeMLC it is now a farce that this is protected by Cabinet in confidence. You owe it to your doctors, nurses and patients to release the report now!

— Chris Picton MP (@PictonChris) November 22, 2018

Health and Wellbeing Minister Stephen Wade said in a statement this morning that the budget blowouts in agency spending had to stop.

“Spending more than double the budgeted amount for agency use within CALHN is another example of the organisational problems at the Royal Adelaide Hospital,” said Wade.

“The financial performance of the central health network is a symptom of the organisational failure.

“I cannot, in good conscience, sit by and allow this to continue to happen.”

Wade said the Government was finalising a “turnaround” plan for CALHN.

“For patients, for the dedicated and hard-working staff and for the taxpayers of this state we must deliver a circuit breaker for this hospital,” said Wade.

“CALHN is not performing to the standards expected by patients, staff or the people of South Australia.

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“We understand the expectations of patients and taxpayers – they want quality and sustainable health care they can rely on, close to their home. That is why we are committed to turning the RAH around.”

Part of the report released by the Government last month said CALHN was on track for a further $300 million budget blowout.

“A cost overrun of more than $300 million is unsustainable,” he said.

“One of the key criticisms that has been highlighted in this report is that financial control is almost non-existent currently.

“Families know how to live within their budgets and so must our hospitals.

“We need to reposition the RAH and TQEH as high-performing hospitals, operating to Australian benchmark standards.”

‘No guarantee’ for lung nurse service

Meanwhile, Labor says a Royal Adelaide Hospital specialist lung nursing service is under threat because the Government has yet to guarantee funding.

Opposition Health and Wellbeing spokesperson Chris Picton said funding for the RAH’s pulmonary hypertension nurse is due to run out at the end of this calendar year.

The nurse currently helps over 300 patients each year manage their conditions and coordinate their treatment.

“As a patient at the Royal Adelaide Hospital for over eight years, I have seen first-hand the essential work of the pulmonary hypertension nurse in caring for patients and keeping people out of our emergency departments,” said Pulmonary Hypertension Association Australia vice president Kevin Burke.

“In the Pulmonary Hypertension community, specialist nurses are held with the same high regard as are breast cancer care nurses by patients with breast cancer.

“Without the nurse the results could be devastating for patients.”

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