By: Natalie Akoorie
District health boards are $240 million in the red and current budget deficit forecasts have not been made public yet, despite being almost three months into the financial year.
The combined deficit of the country’s 20 DHBs is more than 100 per cent higher than was predicted this time last year, according to data compiled by the Ministry of Health.
“The year-end sector result is a $240 million deficit while at the same period last year the sector was reporting a $119 million deficit,” a DHB financial report to Minister of Health Dr David Clark said.
Clark met DHB leaders in Wellington last week to discuss their annual plans, which will forecast expected deficit levels for this year.
Terrific to have the opportunity to meet with NZ’s health leaders in Wellington today. They do a tough job, always open to public criticism — but also one that makes a huge difference in our communities. pic.twitter.com/AHDj4Rquat
— David Clark (@DavidClarkNZ) 13 September 2018
Clark told the Herald the growth of DHB deficits was a direct result of years of underfunding.
“The previous Government chose to prioritise tax cuts over the public health service, and we are living with the consequences of that,” he said.
He said, in its first Budget, the Government pumped the largest increase in health spending in a decade – an extra $2.2 billion dollars – into DHBs over the next four years.
“We also set aside a further $100 million for the coming year for additional deficit support. At the time we acknowledged that even that was not enough to make up for nine years of underfunding.”
Clark said he had been advised to expect the majority of DHBs to continue to be in deficit over the next year.
“I expect DHBs that are in deficit to map out a credible path to sustainability as we increase funding over time.
“This Government is committed to rebuilding our health system and that will take sustained investment.”
When asked if the deficits would affect frontline health services, Clark said he reminded DHB chairs and chief executives last week to spend every health dollar wisely.
“I made it clear that while their priority must be the delivery of high quality services I also expect them to tackle deficits and focus on value for taxpayer money.
“That message was particularly important right now, while the annual plan process is ongoing.”
National’s health spokesman Michael Woodhouse rejected the notion it was the previous Government’s fault that DHB deficits were so high and that National had underfunded health.
“If you follow the pattern of the deficits through the months of 2017/18, what you see is a marked change from the deficit picture from about November or December last year.
“The deficits were tracking under National as they had been budgeted and then they doubled progressively through to June 2018, so almost all of the blowout from $119 million to $240 million occurred in the second half of the financial year.”
The Coalition Government took power in late October last year.
Woodhouse admitted National had an expectation that DHBs be efficient and prudent with limited resources when in Government but said there was no justification for attributing blame for the deficits on the previous Government.
At Waikato DHB, where former board chairman Bob Simcock went on public record last year stating the DHB would have a break-even budget, the deficit was second highest at $37.4 million, behind Canterbury DHB with $63.9 million.
Only four DHBs reported a break-even budget, including Auckland, Waitemata, South Canterbury and Nelson Marlborough.
All DHBs with deficits said higher-than-planned-for volumes of patients was one of the key drivers behind the deficits.
Other reasons included the nurses’ settlement for better pay and working conditions, outsourcing personnel costs including to cover vacancies, outsourcing clinical services including to deliver elective surgeries, clinical supply costs, infrastructure costs and unmet savings.
Source: NZ Herald