SDHB deficit estimated at $42m
Leaked document reveals concerns about health board’s finances
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.‘‘