By: Lucy Bennett

The embattled Counties Manukau District Health Board has revealed it’s facing a projected deficit of $53.5 million for the current financial year.

That’s more than double the $19.8m deficit it ended the 2017/18 financial year with.

Counties Manukau DHB chairman Vui Mark Gosche and members of the executive leadership team appeared before the health select committee at Parliament today for its annual review.

Chief financial officer Margaret White said, in response to a question from National’s health spokesman Michael Woodhouse, that the DHB’s projected deficit for the 2018/19 year, was $53.5 million.

She also confirmed that the DHB’s annual plan had not yet had formal feedback from Health Minister David Clark.

“So you’re into the ninth month of the financial year and you’re working on a trajectory that’s not supported by an approved annual plan?” Woodhouse said.

He asked whether, six months in, the deficit was tracking higher or lower than the projected figure.

“We are delivering at a better rate than forecast. Our plan when we submitted was $53.5m deficit. We are heading to a forecast position of $45m deficit,” White told the committee.

“We’ve been working together with the ministry [of Health], together with the Crown Monitor, from the very first month of our new financial year.”

White said the majority of the costs were associated with additional capacity, particularly extra doctors and nurses.

Gosche told the Herald after the committee hearing that the DHB was working hard to get the projected deficit lower.

“It’s not an easy process where you just find big chunks. It’s a lot of small things. A lot of it is about the work that’s been going on around making the hospital more efficient.

“Where you put that effort in it does take some time, but what it does do is stop the costs driving up,” he said.

Clark installed Crown monitor Ken Whelan at Counties Manukau DHB in April last year following revelations about the state of the buildings across its Middlemore, Kidz First and Manukau SuperClinic sites.

In November the Government announced an $80m injection, in addition to earlier funding, to help fix infrastructure issues at the DHB.

The country’s 20 district health boards ended the last financial year with a combined deficit of $240 million, more double the $119m predicted a year earlier.

DHBs’ monthly financial performance used to be published on the Ministry of Health website but have not been posted since the end of the last financial year.

However, a report from the Ministry of Health to Clark on the financial performance of the DHBs in the first four months of the 2018/19 financial year showed almost all were on track for a deficit.

That prompted Clark to write to all DHBs warning them to tighten their belts or face more governance oversight and possible board changes.

“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.

“This is very disappointing as in 2018 the Government provided DHBs with the highest increase in funding in 10 years,” Clark told the Herald last month.

DHBs receive around $13 billion of the $18b health budget. In Budget 2018, health received an additional $2.2b over four years and another $100m to help cover deficits.

Source: NZ Herald


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