South-west Victoria's hospitals could merge into a single service, with the state government pushing for amalgamations as it develops a new blueprint for the system, an eminent health expert says.
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Victoria's health leaders are providing the government with feedback on the optimal design and governance of its public health network.
They're looking at how services can better work together and use resources to deliver improved care more cheaply in the future.
A government spokesperson told The Standard some leaders had raised the idea of amalgamations but no decisions had been made. There were no plans to reduce the number of hospitals.
An Independent Expert Advisory Committee is leading the work and is made up of former and current health service executives and board members.
But the architect of Victoria's hospital funding system, Dr Stephen Duckett, told The Standard amalgamations were more than just an idea.
"That's not just a possibility, that's what they're looking to achieve," he said.
"It's unclear to me whether they're looking to broker marriages or whether they're looking to force amalgamations.
"I haven't seen anything in writing whatsoever but I think that might be because they're listening still - they've got to work out what's feasible, is it Warrnambool merging with Geelong or is it Warrnambool and Portland merging? They have different benefits and they achieve different things.
"There are lots of options and it depends on what you're trying to achieve. It might not be locally comfortable but it might be sensible for Warrnambool, Hamilton and Portland. Who knows what the right mix is but it's about emphasising that the local communities have to be brought along with this."
Victoria has 76 health services while NSW has 15 health districts. Each of Victoria's health services has a CEO, board and administration and if there were amalgamations, efficiencies and savings could be made in these areas.
Professor Duckett said the November 2021 creation of Grampians Health, which includes Ballarat, Horsham, Stawell, Dimboola and Edenhope, highlighted the benefits of amalgamations.
Warrnambool's South West Healthcare operates a laundry and logistics centre, which supplies the region's hospitals, including Portland, Hamilton and Colac. It also has expert staff who help at Portland hospital and takes on patients diverted from Portland.
"The government's saying now 'we should do more of this', but once you move from voluntary amalgamations to compulsory, it becomes much more difficult politically because local communities need to be sold on the benefits of amalgamations and that takes time - you need evidence of what does and doesn't happen," Dr Duckett said.
"There's not much saving frankly to be made because these are mostly small hospitals. Some of these health services are essentially aged care services so they're mostly funded by the residents and the Commonwealth.
"The money in my view is not there to be saved, it's more about trying to procure a better mix of services for the community, improving quality of care, sharing resources and having a rotation program for nurses to build their skills."
He said merging with bigger health services, such as Barwon Health, also had its benefits.
"Everybody has trouble recruiting staff, but if you're able to offer in some of those very small places a staff exchange or development program so a person who goes out there knows they'll be supported and won't be stuck there forever - those sorts of things make it more attractive to recruit staff," Dr Duckett said.
"They might have an agency bank that's their own so people who want to work part time or casual can do it.
"It's all those sorts of things which have real benefits in local communities. Bigger hospitals are stronger in clinical governance arrangements and so on and it's not always the case these smaller places are providing good quality care and you can have better oversight to ensure that happens."
A draft health services plan is due to be released in April.
South West Healthcare was asked if it had made a submission. It said any questions about the health services plan needed to be referred to the department.
A government spokesperson said every Victorian deserved to have accessible, world-class public health care available to them, when and where they needed it, following the once-in-100-year pandemic.
"It's critical we plan to meet the future needs of communities like Warrnambool," the spokesperson said.
"We are looking at how we continue delivering care into the future while maintaining and enhancing access to safe and high-quality services right across Victoria - and we are working closely with our health services and agencies on how we can best to do this."
The health services plan comes as the state's health system is in crisis. Internal Department of Health figures, sighted by The Standard, showed the state's public hospitals were $1.46 billion in deficit in the six months to December 2023, with every single regional health service recording a shortfall, including South West Healthcare, which was $16.62 million in the red.
