Southern close to budgeted deficit of $22m

Four DHBs exceed $10m in red

THE Southern District Health Board is one of four DHBs to have racked up deficits of more than $10 million in the 201617 financial year.

Parliament’s Health select committee has just released its report on the Auditorgeneral’s audits of the health sector, in which it noted Southern’s financial performance.

‘‘The Office of the Auditorgeneral (OAG) told us that these significant variances between forecast and actual deficits were caused by legitimately unpredictable circumstances,’’ the report said.

Southern was the only one of the DHBs in the $10 millionplus deficit group to have actually budgeted to be that much in the red at the end of 201617.

Counties Manukau had forecast a $5 million surplus but actually recorded a $12 million loss.

Southern had forecast a $22 million deficit and came in at $21.8 million.

The most recent financial information for the SDHB, posted on the Ministry of Health website in June, showed the DHB with a $21.3 million deficit, $7.4 million unfavourable to budget.

SDHB CEO Chris Fleming said the organisation was trying to progressively reduce its deficit in a sustainable manner.

‘‘This means making investments in areas that will set the health system up to run better in the long term, as our population ages and those living with longterm conditions increase,’’ he said.

‘‘Our focus is on transforming primary and community care, as well as developing our technology and other systems, to sup port people to receive care closer to home.’’

The SDHB was examining its use of pharmaceuticals and also ways to reduce the unnecessary time patients can spend in hospital.

‘‘Spending longer than needed in hospital is not good for patient care, especially for our older patients, and it is not the best use of the limited health resources we have available to deliver care to the community.

‘‘These are not quick fixes, but are needed to position the health system for the future, so we can maximise the care we can deliver within the resources that are available to us.’’

The report noted in 201617 the combined deficit for all DHBs was $119 million, $70 million more than budgeted.

In this year’s Budget the Government put $100 million towards DHB deficit reduction.

Health Minister David Clark said the government was dealing with historic underfunding of the health sector.

‘‘I understand not all DHBs will return to surplus immediately, but I expect they will exercise close control over their funds.’’

The report noted the Auditorgeneral’s office had concerns over DHB contract management, scrutiny of sensitive expenditure and asset management.

DHB assets were valued at $6 billion, but their total replacement cost was estimated at $16 billion.

The committee said DHBs received a large proportion of annual government spending, and provided vital services to all New Zealanders.

‘‘We share the OAG’s desire to challenge entities to improve their performance,’’ it said.

❛ Spending longer than needed in hospital is not good for patient care, especially for our older patients, and it is not the

best use of the limited health resources we have

available