Health boards in the red by $207m
District health boards have been put ‘‘on notice’’, with the health minister threatening wholesale changes to membership if spending isn’t brought under control.
After months of refusing to release the figures, the Ministry of Health has published the latest financial reports of the 20 DHBS.
A sector-wide deficit of $207 million has been posted, with every DHB now in the red.
DHBS were forecasting a $372m deficit to June 30, which had deteriorated by $24.1m since the November 2018 forecast.
Supporting documents also warned that if DHBS continued to spend to budget for the remainder of the year, or failed to achieve revenue targets, ‘‘a higher deficit than planned is expected’’.
Health Minister David Clark said he had put the DHBS ‘‘on notice’’, and would consider ‘‘a range of options to improve performance’’ if necessary.
That included changes to board memberships, which Clark said he raised with board chairs and chief executives last week.
Canterbury, Counties Manukau, Southern and Waikato DHBS posted the biggest deficits; $41m, $24m, $29m and $24m, respectively. Each DHB had its own set of cost pressures, including geographical challenges, bigger highneeds populations or demographic changes. But documents showed the Ministry of Health cited increased staff costs as the major driver of deficits, including the hiring of an additional 2667 fulltime equivalent staff in the first half of 2018-19, at a cost of about $126m. ‘‘That includes 440 extra medical staff, 1271 more nurses and 303 allied health workers,’’ Clark said.
Outsourced personnel costs however, were still unfavourable to budget by $43m – that was across 17 DHBS. Generally, outsourced personnel costs are incurred to cover unfilled personnel vacancies.
Clark released a letter he sent to DHB chairs in December, alongside the release of the deficit figures, designed to both set out his expectations in cost reductions and blunt any reaction the Government had not done enough in its first budget to bring the health sector back up to sustainable funding levels.
Crying out for cash
A limited amount of ‘‘equity support’’ was available but it came with strings attached, in the form of stringent monitoring conditions. Of the 20 DHBS, Clark said seven had made requests for ‘‘equity support’’, or additional cash, ranging from $3m to $64m to improve the state of their books.
Canterbury District Health Board, which was facing an estimated $98.4m deficit this financial year, made the largest request. It was one of eight health boards yet to have their annual plans signed off.
Services slipping
In his general letter to all DHBS, Clark also indicated displeasure that some key measures of performance were slipping: specialist wait times, elective surgical wait times and those for radiology or cancer services.
At Budget 2018, the Government injected $2.2 billion more into health over four years, as well as $100m tagged specifically to addressing burgeoning deficits across 19 of the 20 DHBS.