Virus casts its shadow on finances

RISING to meet the challenge of Covid19 has derailed efforts to manage another major issue facing the Southern District Health Board: its parlous financial state.

A report by SDHB chief executive Chris Fleming to be presented to a board meeting today said Covid19 had not only imposed new staffing costs on the organisation as it mobilised staff to deal with the illness, but had also severely affected revenue as nonurgent surgery had been cancelled.

‘‘The obvious challenge, however, with the Covid19 pandemic is that we will now be facing significant cost pressures as we take all steps possible to mitigate the spread and reduce harm for any patients who do contract the virus,’’ Mr Fleming said.

‘‘When we move to the recovery phase, it is likely we will need to utilise the private sector to catch up activity, but this will come at an unanticipated cost.’’

The SDHB recorded an $85.8 million deficit last year, a sum inflated by oneoff costs but one of the largest in the country.

To date this financial year, its deficit stands at $24.2 million, but in February the SDHB managed to operate in surplus, albeit below its budget target.

The organisation’s cash position had improved after a revenue advance from the Ministry of Health at the end of February.

Unsurprisingly, Mr Fleming said neither the SDHB nor the Ministry of Health had devoted much time to developing the annual plan or budget for the following financial year.

‘‘Presently there has been no feedback from the Ministry on either . . . the challenge is that there are now so many unknowns, including how long the Covid19 challenge will last and then what the recovery will look like,’’ Mr Fleming said.

‘‘When we move into a more stable phase we will be able to return our attention to this.’’