REGIONAL Hospitals have been warned by energy suppliers that they will face a massive increase in electricity costs this year.
Hospitals were recently advised by Health Purchasing Victoria, which purchases electricity contracts on their behalf, to expect a rise in costs in the near future.
Cohuna District Hospital chief executive officer, Michael Delahunty said that the hospital was facing an increase in power costs of 50 per cent.
“It’s significant and it’s a serious issue for the whole community, but in the context of public hospitals it has a material impact on our budget in this current financial year,” he said.
“The cost has been imposed on us suddenly. We knew there would be a cost increase, [and we’re thinking] okay, we’re looking at a 10 to 15 per cent increase, but it was a shock to find out it will be 50 per cent,” he said.
Mr Delahunty does not believe the sudden rise in costs will have an impact on service delivery, but it does mean the hospital will have to find savings in other areas.
Kerang District Health chief executive officer, Robert Jarman said that the price rise information was only received after the health service had prepared its 2017/18 financial year budget.
The sudden news placed the health service provider under a lot of pressure to come up with savings to meet a projected 60 per cent increase.
Mr Jarman said the hospital has called on the State Government to provide funding to help hospitals cope.
“We had this increase come after we had set our budget for 2017/18, so we initially contacted the Department of Health and Human Services asking if they could go to Treasury and see if they can get additional funding from the government to cover these costs,” he said.
“If Treasury decide not to add additional funding to our budget, obviously that means we’re going to have to look at making savings in other areas, and I suppose areas that tend to lose out are thing like maintenance and replacing equipment and those sort of of things,” he said.
The call for additional funding has been echoed by Nationals Leader, Peter Walsh, who in State Parliament criticised the Minister for Energy, Lily D’Ambrosio for not guaranteeing hospital funding assistance.
Inglewood and Districts Health Service chief executive officer, Tracey Wilson has faced the same situation and had been warned by suppliers to ensure that the health service budgets for rising power costs.
“Health Purchasing Victoria advised there could be significant costs for energy bills, so when we’ve done our budgeting process we’ve taken that into account,” Mrs Wilson said.
But she is also confident it won’t have an impact on health delivery, and instead will make the same assessments as the other hospitals to find savings elsewhere.
“It will have no impact on services delivery or staffing but we’re looking at ways to make savings on energy usage, such as not heating unused rooms, or lighting uses.”
