By: Natalie Akoorie

Hospitals are $370 million in the red, causing concern that funding of the country’s health system is unbalanced.

According to Ministry of Health data, the country’s hospitals collectively blew the budget by $153m in the 2017/18 financial year, after exceeding a planned deficit of $216m.

The hospitals with the biggest deficits were Waikato with $64m, Canterbury on $39m and Auckland at $36m.

It means that less money is able to be spent in primary and community care despite these areas being recognised as reducing demand and pressure on hospitals, including emergency departments.

Under the Health and Disability Act, a DHB is required to be responsible for the health of its entire population by ensuring there are preventative and community-based services in place as well as acute hospital services.

A DHB has two distinctive arms, provider and funder. The provider arm is predominately hospital services and the funder arm refers to the business of allocating the DHB’s funding to the various health services delivered to its population.

Waikato District Health Board set out to make a $34m surplus in the funder arm last financial year, but only managed $26.3m.

The DHB had allowed for a $44m deficit in the provider arm for hospital services, but that ballooned out to $63.7m.

If Waikato DHB stuck to budget it would have presented an overall $10m deficit. Instead it had the second highest DHB-wide deficit out of 20 DHBs, at $37.4m, behind Canterbury District Health Board on $63.9m.

It’s feared DHB surpluses were already allowing for deferred investment in primary community care, and now that investment could continue to reduce, sources say.

That’s despite Government policy calling for greater investment in primary and community care to ensure people are treated proactively in the community, allowing them to stay at home.

“Hospitalisation, especially of the elderly, is often the start of loss of ability to stay at home and in the community, significantly increasing costs,” sources said.

“Yet the DHBs are managing hospital blowouts by not spending in primary and community.”

They said DHBs were also “too small” and therefore competing with each other.

But Minister of Health Dr David Clark said he had made it clear to DHBs that primary health care was an increased priority under the coalition Government.

“I expect this to be reflected in their financial management.”

He said the current health review he called for, which is designed to future-proof New Zealand’s health and disability services, would capture this issue.

“In the terms of reference for the Health and Disability Review, I’ve asked for recommendations to improve the institutional, funding and governance arrangement of the health service.”

Retired GP Dr Jonathan Simon, now a healthcare consultant in the UK, said New Zealand had a disintegrated health system that was slowly dying.

“New Zealand has a dumb, divided, disintegrated system that isn’t working and no amount of funding is going to change that.

“The whole system is not sustainable and secondly it actually has to be transformed because it’s not fit for purpose.

“Part of what they have to do is take some of the toxic debt away from the DHBs. There are DHBs that have spent too much on the development of their capital infrastructure and they’re so busy paying off the debt on that to sustain their services.”

He said instead of 20 DHBs there needed to be a “single purchaser” for the whole country.

“They spend the whole time focusing on the hospital providers and the majority of them had not developed the relationships with the primary sector that would actually help banish their demand.”

Napier GP Dr Mark Peterson said good primary care would keep people away from hospitals and the Government was committed to reducing GP fees for low-income people, making a doctor’s visit $18.50 for community service cardholders from December.

However, he said more investment was required.

“We may need to look at other ways of funding within primary care that is nationally mandated and isn’t dependent on DHBs juggling budgets.”

Source: NZ Herald

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