Growing Debt Affects Australian Public Hospitals

15 April 2010 (Last Updated April 15th, 2010 18:30)

Due to a growing debt crisis, public hospitals in Australia are failing to pay suppliers of essential medicines and diagnostic tests, despite measures imposed by the government a year ago. South Eastern Sydney and Illawarra Area Health Service's debt has increased by 70% from A$12m on 30

Due to a growing debt crisis, public hospitals in Australia are failing to pay suppliers of essential medicines and diagnostic tests, despite measures imposed by the government a year ago.

South Eastern Sydney and Illawarra Area Health Service's debt has increased by 70% from A$12m on 30 June last year to A$20.4m on 30 March, while Sydney West Area Health Service's has risen 30% from A$14.3m to A$18.9m according to the Sydney Morning Herald.

The state total was A$69m, which includes only invoices unpaid after 45 days, the time set by the department, though many contracts stipulate 30-day payment.

According to the Medical Technology Association of Australia, which represents suppliers of equipment, 48% of invoices to NSW Health in the past year had been paid later than contract terms.

Dubbo and Bathurst hospitals were unable to order bandages, gloves and garbage bags because of unpaid bills and more than 20 companies had suspended supply in the Northern Sydney Central Coast Area Health Service due to debts, according to a list obtained by the Herald.

Tightening of controls on staff to limit purchases that don't relate directly to patient care could be considered as a debt strategy, experts said.

The debt was A$20m lower than last March and the total owed to small vendors, whose annual trade with area health services was less than $150,000, was A$1.7m, down from A$15m in November 2008.