Mixed views over board’s financial health
The financial health of Auckland’s medical services are up in the air with district health board members voicing different views about the future.
At the Auckland District Health Board’s May meeting, audit committee chairman Harry Burkhardt expressed concern about the financial direction of the board.
He highlighted the need to replace ageing equipment and the increasing cost of salaries as major concerns.
“You’ve got runaway costs in our business. I feel really disempowered in the whole process.”
Mr Burkhardt declined to comment further after the meeting.
Board chairman Pat Snedden was more optimistic.
“I think the ADHB is in one of its best financial positions in many years.”
He hopes the organisation might break even at some point in the near future, but points out it’s always diffi to predict what is going to happen in the health system.
“There’s always going to be pressure coming through. It’s so transparent, anybody can put pressure on the process.”
Chief financial officer Roger Jarrold says the board has overcome many of the challenges it faced when its deficit ballooned to $63.5 million in 2001 and 2002.
The budget blowout was due to construction and extra services provided at the new Auckland City Hospital.
The board’s current debt is $10.7m.
Mr Jarrold says the improvement comes from productivity gains from more modern facilities and equipment, more funding for national services at Starship and streamlining services to match demand.
But Mr Snedden highlights the need for new technology and added services, such as treatment for eating disorders, as “extremely costly” items the board has to pay for.
Inter-district flows, where other district health boards compensate Auckland for treatment their residents receive at Auckland Hospital, is also a factor.
Mr Snedden says there is a lag between payment from other boards and expenses such as wage settlements, which must be met immediately.
“We incur the cost before we get full payment.”
But he says disagreements between boards about money is always at the margin, with 98 percent of funding decisions causing few problems.