SDHB deficit $4 million lower

SOUTHERN District Health Board staff have been told ‘‘blunt instruments’’ to cut costs will not be introduced, as the organisation battles a deficit more than $8 million more than budgeted.

Staff had feared measures such as a hiring freeze had been introduced, but chief executive Chris Fleming ruled that out yesterday, saying hiring for initiatives such as nursing safe staffing would be fully implemented.

‘‘We are under significant pressure, and the Minister [of Health, David Clark] does expect us and other DHBs to improve our financial position,’’ he said in an email to all staff.

‘‘To do this we have to be firm but fair. I have no intention of placing artificial barriers up as a blunt instrument to control costs.’’

The Otago Daily Times yesterday reported — as stated in the Ministry of Health’s monthly financial reports — that the SDHB’s deficit was $29.9 million.

However, the ministry made an error in its report, which it then corrected. The deficit figure was in fact $4 million less, $25.9 million.

‘‘We have been reporting monthly to the ministry, which has been aware of our growing concerns,’’ Mr Fleming later told the Otago Daily Times.

The SDHB has reined in its deficit in the past few weeks.

Mr Fleming said the year to date result had dropped to a $22.8 million deficit, $7.6 million over budget.

Significant efforts by the surgical services team had improved the financial figures somewhat, Mr Fleming said.

To the end of December, elective surgery had been $1.3 million less than planned, but was now back on track after operation numbers were caught up in January.

‘‘We have had challenges meeting our elective surgery targets, our medical workforce costs have been significantly more than planned, and increased spend on pharmaceuticals is about half of it.’’

Industrial action and pay settlements had affected the SDHB, as it had all DHBs, Mr Fleming said.

Pharmaceutical costs were $3.6 million more than planned, and the board was still trying to get ‘‘robust’’ information as to why that was.

‘‘That is just starting to flow now,’’ Mr Fleming said.

‘‘We also have one of the highest rates of people being on multiple drugs, by which I mean 11 or more.’’

Starting in March, in conjunction with the Pharmacy School at the University of Otago, the SDHB would start running clinics which would review patient drug requirements, both in hospital and in primary care.

‘‘The intention is to make sure there is appropriate pharmaceutical prescribing, and also to make sure people are taking their pharmaceuticals.

‘‘Hopefully this will be a winwin all round.’’

Cancer drugs were another big driver of pharmaceutical costs, and a new staff member had been appointed to manage the use of medicines which were being used at a rate much higher than government drug buying agency Pharmac had anticipated, Mr Fleming said.

‘‘We just need to understand what is going on, because we want to make sure people are indeed accessing appropriate services.’’

Mr Fleming said the Ministry of Health had given the SDHB ‘‘clear expectations’’ of how it would manage its financial situation, and had offered assistance to identify and address problems.

‘‘For the first time the ministry are not just meeting with us and asking how we are going to do better in terms of our financial performance, they have actually offered help.

‘‘We would like them to analyse their national databases and tell us where from service provision, we look different, and not only know where the problem is but have a bit more knowledge about what they think is causing that difference.

‘‘Once we now the causes of it . . . we can start working with clinicians and the community.’’

❛ We have had challenges meeting our

elective surgery targets, our medical workforce costs have been significantly more than planned, and increased spend on pharmaceuticals is about half of it

Chris Fleming