Phillip Island & District Historical Society

History of Warley Hospital

Last updated on 28-May-19



With the opening of the new Phillip Island health hub this weekend, Mary Whelan looks back on a century of health care on the island. From basscoastpost.



The audience listens to speakers at the opening of the new Warley Hospital in Cowes, December 1, 1962. Photo: Phillip Island & District Historical Society




By Mary Whelan
April 19, 2018


IN 1798, when George Bass first saw Phillip Island, it was already inhabited by a few sealers. Much later came  graziers, farmers, chicory growers and shopkeepers. Guest houses and schools were built, but there was no resident doctor and no hospital.

Most illnesses were treated at home with home remedies passed down from mothers to daughters. In the case of serious illness or accident, patients were transported on basic stretchers to Cowes Pier to go by ship across to Hastings Hospital or to Melbourne, which was a very rough five-hour journey away. In 1910 residents tried to organise a link with the Bush Nursing Association and former nurses living on Phillip Island but the attempt failed.

In 1923 Mr and Mrs Thompson agreed to buy a building in Cowes, known as “Buena Vista”, for a hospital if the residents would undertake to furnish and equip it as a hospital. The house was then renamed Warley after Mr Thompson’s family home in England.

The Victorian Bush Nursing Association (VBNA), which was founded at about this time, was overseeing a number of small bush nursing cottages which, as time went by, were converted to small hospitals. According to the association’s printed handbook of 1926: “Bush nursing hospitals are private hospitals, owned and controlled by the Centres, available to all who need them, at fixed fees. They enable many cases of illness to be dealt with.”

The inaugural Warley hospital committee sought donations to equip the new hospital and applied to the VBNA for affiliation and help with maintenance funds. June Cutter’s Sixty Years of Caring – The story of Warley Cowes Bush Nursing Hospital records that affiliation was granted with the agreement that “if at any time the project was abandoned by the residents, the hospital should become the property of the Central Council of the Association”.

Warley officially opened on December 8, 1923 with beds for six patients and an operating theatre with modern appliances, including a 600-candle power lamp.

Island families donated goods from very early on. The first Warley patient, Mr Harmon West, was admitted with a septic arm. During his stay he learned the hospital had to buy milk so he offered the use of one of his cows. This was gratefully received, as were preserves for the kitchen pantry and wood for the fires. The Alfred hospital and Red Cross Hospital donated beds and equipment. Children from the local school gathered eggs for the hospital. Local guesthouse owners and other businesses sponsored fund-raising events such as the hospital ball, garden parties, fetes, car raffles and tennis tournaments, all of which were well supported by residents.

Annual subscriptions from residents helped Warley to remain financially viable for many decades. About 60 per cent of residents held private health insurance (at a time when the state average was 50 per cent), which mostly covered the hospital fees.

The Warley model of care became woven into the fabric of the lives of locals. Annual memberships entitled them to a lower fee for hospital stays; fund raising involved a willing whole community; costs were contained and volunteers did anything that was needed, including being volunteer ambulance drivers.

Over time the hospital committee guided the extension of Warley so more patients could be cared for, then the construction of the new Warley building (opened in 1962), and the addition of a nursing home in 1980. The original cottage was relocated by Mr O’Donoghue to nearby Genista St.

Warley was a “not for profit” private hospital serving its community. Pensioners were given a discounted rate for hospitalisation, and at times bed occupancy by pensioners was 38 per cent.

Warley was able to care for people at every stage of their life: from birth through illness and surgery, during convalescence and finally at the end of their life. An emergency department was staffed by nurses 24 hours a day with local GPs on call if needed; there was an outpatients service for patients who didn’t require hospitalisation and a visiting outpatients service for patients discharged from hospital.

All these were made possible by constant fund-raising, careful management over five decades and only small increases in population.

In 1921 the population of Phillip Island was 858 people. By 1976 the population was 2340, an increase of 1482 in 55 years. Over the next decade the population almost doubled to 4350 people.

Numbers game
Suddenly, the community service model of care was fraught with problems. There was more use of the 24-hour service as well as the extra patients who presented in summer holidays. There was no funding for this or for the outpatients or visiting outpatients work carried out by the nursing staff.

​In the early 1990s, a fee was introduced for patients attending the emergency department: $10 for members and $20 for non-members. Accounts were sent to the patient after their visit. The problem was that a number of patients didn't ever pay their bills, particularly visitors using the after-hours service in the peak tourist period.

The doctors did not charge the same level of fees they would have at a standard private hospital as Warley provided a community service for patients and some didn't have a lot of money to pay higher fees.

When the GPs were being called in a lot or had to be on call, they requested they be paid an 'on call' fee as paid by public health services. The Warley Board could not pay this. The doctors and the Warley Board requested assistance from the government but this 'on call' fee was never paid. 

With increasing use of the 24-hour service at Warley, busy local doctors were no longer able to be on call at night and over the weekend so new doctors were needed to fill this gap.

Medicare was introduced in 1984, adding the cost of the levy to those who also paid for private health insurance. As premiums rose, many chose to drop their private insurance and use public hospital services.

Nationwide the cost of medical professional indemnity insurance rose sharply, particularly for GPs delivering babies and visiting obstetricians. Fewer doctors were willing to provide this service, particularly in small rural hospitals. Dr Ian Wilson, a GP obstetrician at Warley, observed “The government realised there would be a major problem and provided a subsidy for rural doctors which allowed them to continue this work.”

​The expectations of maternity clients also changed. You needed private health insurance to have your baby at Warley but there were no hospital fees at Wonthaggi. All these factors contributed to a decline in births at Warley. Dr Wilson delivered the last baby at the hospital.
By 2001, Warley no longer provided obstetric services. This loss was a blow to the community as families now had to leave Island to have their babies. It also meant the loss of a major source of funding and use of inpatient beds.

​From the mid-1980s hospitals and aged care facilities had to be accredited. Warley’s doctors and nurses always provided care of a very high standard; however, seeking accreditation was a significant cost that involved upgrading equipment and administrative processes to meet the standards required.

​In the 1990s a change in patient categories reduced the number of days a nursing home type patient could stay in an acute bed.

Each change made Warley Hospital’s financial position more precarious. A local group collected 1000 signatures calling for the Commonwealth to fund public hospital beds in the hospital, but to no avail. In 1990 a report recommended that five public beds be made available to Warley. This was rejected by both federal and state governments, although some funds were allocated for outpatient services. Two reports recommended that Warley increase the number of aged care beds, as there was Commonwealth funding for these beds, but Warley did not have the funds to expand further.

“In hindsight," says Greg Dean, a Warley Hospital board member, "every effort should have been made to become part of Wonthaggi, but Warley was part of us and us being Phillip island – very insular and parochial.”

On February 1 2005 The Age reported that Warley aged care had not met 22 of the 44 aged care standards. This was remedied in the next few months but prompted a review again in February 2007 where all standards were met. However, an unannounced visit in September found 21 instances of non-compliance. These were mainly due to policy, procedures and processes with no sanctions made against the facility, and all were rectified as required. 

The end of Warley 
Later that year, after two unsuccessful attempts to find a partnership for Warley’s aged care facility, the board arranged to relocate the residents to Grossard Court, along with any staff who wished to move.

On January 31, 2008, 85 years after it first opened, the acute hospital closed. At the hospital’s 85th annual general meeting on September 30 that year the president explained the series of events that had led the board to that decision.

With a debt of $1.9 million, the board had approximately $400,000 in staff entitlements to pay. The 13 bed licences were sold, and the bank sworn valuation of the existing properties was $3.3 million. “The board hopes to sell off some of the assets to service the debt, leaving some land and buildings with which to investigate the provision of health services to the community”

Warley was held in such high regard by the Phillip Island community that the loss is felt to this day. These are a few of the comments I heard from former patients and staff in researching this article:

  • “It was incredibly sad, it was a facility we took for granted, and lovely to have a baby there, so convenient. Warley Avenue was such a vibrant street with a life of its own. When it closed it was like a ghost town.” Irene (patient)
  • “It was a wonderful midwifery team. There was great respect between the doctors and the nurses.  
       “You never knew what might happen on night shift. One evening I had a baby on the breast, a man with chest pain on the monitor and the doorbell rang, and when I opened it there was a man with a spear gun in his guts.” Jill (nurse)
  • “I worked at Warley for three months and used to think, when I was standing in the ward looking out at the wonderful view over the water, what a lovely place to be when you are unwell.” Marie (nurse)
  • “The nursing staff were a lovely bunch of ladies who were very supportive, well trained, very competent, always gave good quality care.” Bruce (surgeon)
  • “My dad had a heart attack and we took him to Warley. He saw Dr Wilson who wanted to send him to Melbourne. Dad said no, he wasn’t going. The doctor said ‘I’ve got a new drug but it might kill you’. ‘I’ll have that then,’ says Dad. It didn’t kill him.”  Howard
  • “I remember having my tonsils out in the old hospital and Nell Forrest living there. My grandmother Evelyn Anne Janson was the oldest resident on the Island in 1962 and so had the honour of cutting the cake at the garden party opening of the new hospital. My friend Bill Mitchell was the last patient in Warley.” John Jansson
  • “Great working there, the team work of the doctors and nurses made it really good.” Dr Ian Wilson
  • “Disappointment - we couldn’t save the joint.”  Greg Dean, Warley Hospital Board member

"Warley Era Comes to a Close"  from the Phillip Island & San Remo Advertiser, 3.1.2019

A century-long history of Warley Hospital is coming to an end, after $1.3 million was officially transferred from the Warley Trust to the Phillip Island Health Hub. The trust has been responsible for holding the assets from the sale of Warley Hospital which closed in 2008, overseen by trustee Leading Age Services Australia (Victoria) (LASA).

LASA officer George Andreola confirmed the transfer of $1.3 million was made after the hub secured Federal and State funding, as well as securing lease of the Church Street land from the Bass Coast Shire and securing a building contractor. Mr Andreola said $43,569 was now all that remained in the trust from the Warley sale, which would also be given to the hub next eyar once all legal bills had been finalised.

"Once the funds have been dispersed, that will be the end of the Warley Trust," Mr Andreola said.

Warley Hospital closed in January 2008, after both the state and federal governments of the day refused lifeline funding of $2.5 million to save it. As a stunned community came to grips with its loss and impending sale, residents were further shocked when a Melbourne based organisation, ACCV Ltd (Aged and Community Care Victoria) laid claim to all Warley Hospital assets. ACCV Ltd asserted that a 1923 Deed of Trust set up by Warley's donor, W E Thompson, specified that in the event of Warley Bush Nursing Hospital ever closing, the asset would pass to (the now defuct) Bush Nursing Association of Victoria (BNV). And that as it was the successor of BNV, the assets belonged to it.

In a further action that outraged the community, ACCV lawyeers informed the Warley Board by letter that ACCV was entitled to the Warley assets, and gave the community 28 days to vacate the premises. The final chapter in the fight for the assets remaining after the sale of Warley Hospital played out in the Supreme Court in 2011. The Supreme Court, on April 14, 2011, ordered the proceedings brought by ACCV be dismissed. The Court then ruled the community, through an Advisory Committee, be appointed, retain control of expenditure of the $1.4 million, which was to be held in Trust. 

It was ruled that the funds could only be distributed in a manner consistent with the purpose of the original 1923 Deed of Trust, which was for the purpose of providing medical, nursing and paramedical services to the people of Phillip Island. Advisory Committee representative David Luscombe said while the era of Warley ended "some time ago", the payment of the $1.3 million was the "exxecution of a decision made by the court".