$8 Billion Needed to Upgrade 3 Major Deterioriating Melbourne Hospitals

‘The Alfred, Royal Melbourne and Austin hospitals have needed renewal for nearly a decade,’ Jonathan Spear said.
$8 Billion Needed to Upgrade 3 Major Deterioriating Melbourne Hospitals
A general view of the entrance of the Royal Melbourne Hospital in Melbourne, Australia, on July 21, 2022. Ratnayake/Getty Images
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Three major Melbourne hospitals are deteriorating and have been in need of an upgrade for more than a decade, according to Infrastructure Victoria.

The report, Victoria’s Infrastructure Strategy 2025 to 2055, revealed that The Alfred Hospital had needed to close wards and reschedule procedures due to challenges with infrastructure.
“Its operating theatres urgently need replacing, said Infrastructure Victoria, an independent statutory authority.

Infrastructure Victoria also found major issues with Austin Hospital and Royal Melbourne Hospital.

“The Austin Hospital is unable to use some of its facilities, reducing access. Many assets at the Royal Melbourne’s Parkville and Royal Park campuses are past their useful life,” Infrastructure Victoria added.

Chief Executive Jonathan Spear said the three hospitals provide the highest level of complex and specialised healthcare for Victorians.

“Critical maintenance issues and deteriorating and aged facilities can compromise the delivery of safe, high-quality patient care,” he said.

Further, he called for urgent action from the government so that the hospitals are able to meet the needs of Victoria’s growing population.

The report noted Victoria’s hospitals faced multiple challenges, including an ageing population and a rise in chronic diseases.

By 2051, about one-fifth of Victorians would be 65 or over.

“About 80 percent of people in this age group have at least one chronic health condition, and 28 percent have three or more. Hospitals must be able to meet these changing demands,” the report said.

The report also noted that providing hospital services in run-down assets could drive up long-term costs.

“Upgrading these hospitals will mean they can continue to provide higher complexity care to patients from all over Victoria. The government will also need to expand infrastructure capacity in response to rapid population growth in Melbourne’s outer suburbs,” the report said.

$8 Billion Cost to Redevelop the Three Hospitals

Infrastructure Victoria estimated the cost of upgrading the three hospitals would be between $6 to $8 billion over the next 10 years, on top of funding the government has already announced.

Construction on all three hospitals should start in the next five years to enable completion by 2035, the statutory authority recommended.

“The Victorian government should announce the scope and timeframes to redevelop the Royal Melbourne Hospital’s facilities in Parkville,” Infrastructure Victoria said.

“It should replace the Alfred Hospital’s operating theatres and announce the scope, timing and funding to further redevelop the Alfred and Austin hospitals.”

Spear added that, “Recent government investments address some immediate needs, but these hospitals still require urgent capital works. Now is the time for investment in our critical hospital infrastructure.”

The report also recommended the government invest in a statewide virtual care and medical image sharing system in the next five years.

“A statewide medical image sharing system can improve care, reduce unnecessary tests and save costs for hospitals and patients. Other states have already introduced similar systems,” Spear said.

It suggested that general government revenue would be able to fund these hospital redevelopments, while other funding models could also be considered.

“The Victorian government can also consider alternative funding sources, like leasing parts of hospitals to businesses who then provide services for hospital staff, consultants, patients and visitors. Other funding sources include property income, provision of other services, donations and bequests,” the report said.

“The government can use funding models like public-private partnerships and ground lease models to enable private financing and delivery.”

Some Funding Already Underway

Minister for Health Mary-Anne Thomas said on Nov. 11 in a release announcing a multicultural health survey, “We’re building a health system that works for all Victorians—no matter who you are or where you’re from.”
In August, the Allan Labor government announced a $292 million investment in the Alfred Hospital to support important infrastructure upgrades.

“This funding will support important infrastructure upgrades at The Alfred, improving patient experience and supporting the work of dedicated health care workers,” the Labor government said.

In response to the report, Shadow Health Minister Georgie Crozier said Victorians deserve better.

“Labor’s priorities are all wrong when our hospitals are crumbling,” she said on X.
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Monica O’Shea
Monica O’Shea
Author
Monica O’Shea is a reporter based in Australia. She previously worked as a reporter for Motley Fool Australia, Daily Mail Australia, and Fairfax Regional Media. She can be reached at monica.o'[email protected]