Worrying and alarming are just two adjectives to describe the financial state of Victoria's hospitals.

This week The Standard revealed the state hospital system racked up a $697 million operating deficit - spending significantly more than its budget - in the first quarter of the 2023-24 financial year.

All but one of the state's 23 regional health services were in the red as of September, 2023.

Warrnambool-based South West Healthcare recorded a deficit of $6.31 million after a $234,000 surplus in 2022-23.

Ballarat's Grampians Health notched a $25.26 million deficit, Albury Wodonga Health $22.24 million, and Bendigo Health $15 million, while Gippsland Southern Health was the only service in the black, with a $60,000 surplus.

Left unabated, the system is on track to post a $2.8 billion deficit. That's more than the new taxes and cost savings the government introduced this financial year to repay the state's huge COVID-19 debt would raise in a year.

Sobering indeed.

The public health system is not supposed to turn a profit, it is there to help us in vulnerable moments. But with deficits as large as these, will the system be there to help us when we need it?

How has this happened?

A state government spokesperson could offer no reason for the huge budget shortfalls other than "higher than expected demand".

Is demand higher now than during the COVID-19 pandemic?

As we revealed, hospitals didn't receive their actual budgets until late January, seven months into the new financial year and that surely wouldn't help. Have hospitals been operating in the dark? Why has the government taken so long?

The health system's unprecedented financial position prompted the government to introduce significant cost saving initiatives. But the government would not outline the measures.

The government failed to rule out service and staff cuts, when asked. But the government has to be careful because at South West Healthcare elective surgery wait times surged to near record highs in late 2023. Reducing surgeries is not the answer because wait lists will only continue to grow and delaying procedures will only add strain to other areas, GPs, allied health professionals and demand for medications.

South West Healthcare has said it will not cut services.

So, how will the deficits be reined in?

Health Minister Mary-Anne Thomas and the government need to come clean. Denying the issue is not the answer. Saying nothing only leaves a vacuum of worry, which will undermine confidence in the system and the government. Yet again, this government needs to provide answers. But as regular readers of The Standard know, it is more interested in obfuscation and political speak.

Until next week,

Greg Best

Editor, The Standard