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Hospital's charitable donations diverted to pay running costs

BMJ 2004; 328 doi: (Published 29 January 2004) Cite this as: BMJ 2004;328:248
  1. Christopher Zinn
  1. Sydney

    One of Australia's leading children's hospitals has been caught in an ethical and political row after a cash crisis forced it to use public donations to pay for staff wages.

    The honorary treasurer of Sydney's Westmead Children's hospital resigned over a board decision to use $A2.5m (about £1m, $1.9m, €1.5m) to pay outstanding bills. Mr David Say's letter of resignation was leaked to the media amid a growing political storm in New South Wales about the underfunding of the public hospital system.

    In the letter he said that while the move, which had not happened before, might have been legal it was unethical.

    “I do not believe that they [the public] donate so that staff from cleaners to security staff, to managers and highly paid specialists can be paid, nor would they appreciate their gifts being used to pay for basic supplies,” he wrote.

    The flagship hospital, which is well known for cardiac care and treatment of childhood cancer and leukaemia, raises 11% or $A15m of its annual budget though fundraising.

    Professor Kim Oates, Westmead's chief executive officer, said the hospital had been under pressure over the Christmas period but he denied there was a crisis or that the funds had been used for cleaners.

    He said the money was a windfall taken from “untagged funds” and was a profit from the revaluation of the hospital's share portfolio.

    “What I think the public should do is pay for extras and that does include some staff,” said Professor Oates. “When people want to support specific things the donations are tagged but our ‘untagged’ donations are useful.”

    But some of the hospital's major donors have been far from impressed. “The state government should be hanging its head in shame,” said Jean Hay, the chair of the hospital's Friends of the Bear hospice.

    In the state's highly charged political debate about health care the revelation has provoked a storm. Health minister Morris Iemma said the funds had been donated for the general running of the hospital, where 200 salaried positions are paid for through donations.

    But the Liberal opposition's health spokesman Barry O'Farrell said: “It's a disgrace that this money has been diverted into running costs and it's a breach of faith with the public who donated the money.

    “Nowhere on the children's hospital website, or in its literature, does it say it will be used to pay the salaries of cleaners or security staff.”

    Minister Iemma admitted that the state's children's hospitals were facing serious funding issues because the medical ongoing indemnity crisis meant doctors were referring young patients to hospital specialists rather than operating themselves.

    “There is nothing new in this,” he said, adding that donated funds were stringently audited. “What's new is the huge increase in patients.”

    The reluctant whistleblower, David Say, said it was unreasonable for the government to put additional demands on hospitals and at the same time cut their effective budgets.

    “I hope that nothing I've said will impact on donations,” he said. “I hope now it may bring about more rational funding of our hospitals.”

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