By: Lucy Bennett

Canterbury District Health Board is closing in on a $100 million projected deficit for the current financial year.

The $98.4 million estimated deficit is 50 per cent higher than the $63.9m deficit the DHB posted in the 2017/18 financial year.

It also follows the revelation last week that Counties Manukau DHB is also heading for a larger than expected deficit at the end of the 2018/19 year. It has a projected deficit of $53.4m, double the $19.8m it ended 2017/18 on.

Canterbury District Health Board chairman John Wood and the DHB’s leadership team appeared before the health select committee at Parliament today to be questioned about its annual plan for the 2018/19 year.

The Herald reported today that just 12 of the country’s 20 DHBs have had their annual plans signed off, with only four months of the financial year left.

Wood and chief executive David Meates confirmed to the committee that Canterbury’s annual plan had gone to Health Minister David Clark only a week ago, after “many iterations” in which they were asked to go back over it and look for more savings.

Meates said there were several reasons for the size of the deficit, including the “ongoing disconnect between share of population and share of funding, which has been a challenge for the Canterbury region for the last five years”.

Wood was also critical of population projections, saying the December 2013 figures were 41,000 people lower than what actually eventuated.

Population projections are important because they are used to determine the share of funding each DHB receives. The Ministry of Health has confirmed it will use 2013 Census figures for new projections because of issues with last year’s Census.

Canterbury had undergone rapid population growth following the earthquakes, Wood said.
“Such rapid population growth has put services under pressure and meant our damaged physical infrastructure is inadequate to deal with our actual population and their needs.”
The scale of the combined deficit for all DHBs is not known because monthly financial performance data has not been publicly released since the end of the 2017/18 financial year.

At that time, the combined deficit of the DHBs had blown out to $240 million, double what it was the previous year.

National’s health spokesman Michael Woodhouse has estimated it could double again to $500m by the end of the 2018/19 year.

A Ministry of Health report on the DHBs’ financial performance in the first four months of the 2018/19 financial year was enough to prompt a warning from Health Minister David Clark to DHBs that they need to tighten their belts or face the prospect of more governance or board changes.

Clark met DHB chairs in December and followed up with a letter.

“We are now halfway through the financial year and, based on current evidence from DHB annual plans, this expectation is unlikely to be met,” he wrote in his letter of December 17.

In Budget 2018, health received an additional $2.2b over four years and another $100m to help cover deficits.

That amount will barely touch the sides if the deficit blowouts of Counties Manukau Canterbury, a combined $150m, are an indication.

Source: NZ Herald


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