SDHB deficit es­ti­mated at $42m

Leaked doc­u­ment re­veals con­cerns about health board’s fi­nances

Central Otago Mirror - - NEWS - By PHIL MCCARTHY

Gov­er­nance changes could be on the cards at the South­ern Dis­trict Health Board as a 2015-16 fore­cast deficit of up to $42 mil­lion looms, Labour Party health spokes­woman An­nette King says.

King said she was very con­fi­dent a leaked doc­u­ment her of­fice re­ceived this week was a Min­istry of Health re­port re­lat­ing to the fi­nan­cial de­te­ri­o­ra­tion of the South­ern Dis­trict Health Board.

The doc­u­ment says the board’s fi­nan­cial per­for­mance has de­te­ri­o­rated through­out 2013-14 and most of 2014-15.

‘‘The DHB con­tin­ues to fore­cast a year-end deficit of $27 mil­lion for 2014-15 de­spite pos­i­tive re­sults in Jan­uary and Fe­bru­ary 2015,’’ the doc­u­ment says. ‘‘Gov­er­nance op­tions are be­ing pro­gressed to as­sist in ad­dress­ing this.’’

It goes on to say: ‘‘The Min­istry of Health has pro­vided ad­vice to the Min­is­ter of Health on gov­er­nance op­tions for South­ern DHB.’’

King said the gov­er­nance op­tions be­ing con­sid­ered were well be­yond the al­ready an­nounced re­place­ment of board chair­man Joe But­ter­field. The re­port meant Health Min­is­ter Jonathan Cole­man was con­sid­er­ing in­creas­ing mon­i­tor­ing of the board by the Na­tional Health Board or re­plac­ing the board with a com­mis­sioner, King said.

How­ever, in a state­ment Cole­man said: ‘‘Joe But­ter­field is still SDHB Chair up un­til the point at which a new Chair is ap­pointed, and that will oc­cur in due course.

‘‘A grow­ing deficit at South­ern DHB is not ac­cept­able. The Min­istry is work­ing closely with the DHB and it re­mains on In­ten­sive Mon­i­tor­ing by the Na­tional Health Board. Given that Dunedin Hos­pi­tal re­quires ex­ten­sive re­de­vel­op­ment, it is im­por­tant the DHB re­turns to a more sus­tain­able fi­nan­cial po­si­tion whilst en­sur­ing the de­liv­ery of ef­fec­tive ser­vices that meet the com­mu­nity’s needs,’’ Cole­man said.

The leaked doc­u­ment also out­lines a dra­matic in­crease in the board’s ini­tial fore­cast 2015-16 bud­get.

‘‘The first draft tem­plates for the 2015-16 an­nual plan in­di­cate a $42 mil­lion deficit. The (Na­tional Health Board) ad­vised the DHB that this is un­ac­cept­able. The board is con­sid­er­ing fur­ther sav­ings pro­pos­als in April-May 2015.’’

King said the board had al­ready out­lined its po­si­tion to the gov­ern­ment around in­creas­ing staff, phar­ma­ceu­ti­cal and in­ter­dis­trict costs and ques­tioned what more it could do about the sit­u­a­tion.

‘‘I don’t think there’s much more they can squeeze out of the lemons.’’

The board was be­tween a rock and a hard place, and the gov­ern­ment needed to carry out an in­de­pen­dent re­view of the pop­u­la­tion-based fund­ing for­mula, she said.

The de­mands be­ing put on the board could mean more cuts to health board ser­vices, wages and staff lev­els.

King said she sus­pected a lack of proper due dili­gence about the dy­nam­ics of the south­ern re­gions, in­clud­ing the vast geog­ra­phy and static pop­u­la­tions, when the Otago and South­land boards were merged was a ma­jor fac­tor in the present dif­fi­cul­ties.

But­ter­field was a ‘‘good man’’ but the job had be­come too big for the board to per­form un­der the cur­rent fund­ing regime. Sev­eral other dis­trict health boards were ‘‘sweat­ing over their bud­gets’’ but the South­ern Dis­trict Health Board was in the worst po­si­tion.

In­ver­cargill MPSarah Dowie said the lat­est South­ern Dis­trict Health Board deficit fore­casts she had seen ‘‘over­whelmed’’ her and the board was on the radar of Cole­man ‘‘on a num­ber of dif­fer­ent lev­els’’.

She said about 70 per cent of elec­torate queries she fielded were health-re­lated, and ranged from sys­tem fail­ures to in­di­vid­ual com­plaints.

Dowie said she could not com­ment fur­ther on the board’s po­si­tion.

‘‘Joe But­ter­field is still SDHB Chair up un­til the point at which a new Chair is ap­pointed, and that will oc­cur in due course.‘‘

An­nette King.

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