Canty DHB debt balloons

Canterbury’s health authority has overshot its budgeted deficit by $10 million to end the financial year with what will be the largest health debt in the country.

But the bleak result has drawn less criticism from the Government’s health officials than under the previous leadership.

Provisional figures show the Canterbury District Health Board (CDHB) recorded a $63.9m deficit for the year ending June 30, up from the $53.6m budgeted in an annual plan signed off by Health Minister Dr David Clark.

Responding to questions about the CDHB’s deficit, the health minister said any increase in DHB deficits was a concern, however it needed to be seen in ‘‘the context of years of Government underfunding’’.

‘‘CDHB received an extra $45m in the budget. However, it will take more than one Budget to make up for nine years of underfunding,’’ Clark said.

Despite the shortfall, which accounts for more than a quarter of year-end DHB debt forecast by the Ministry of Health, a health system expert has predicted a more ‘‘relaxed’’ approach from the new Government.

‘‘I’m sure there will be concern in Wellington about it,’’ Otago Business School dean Professor Robin Gauld said.

‘‘However, I would imagine that the new Government is very, very focused on trying to maintain a good productive working relationship – because that’s what it’s all about.’’

Since Clark became minister, the Canterbury DHB and the Ministry of Health have embarked on what has been described as a ‘‘truth and reconciliation’’ process after years of bitter feuding over funding levels, population

‘‘It will take more than one Budget to make up for nine years of underfunding.’’ Health Minister Dr David Clark

data and building projects. Funding is part of those discussions.

Last year, the board’s planned deficit was a source of tension between the parties. Departed director general of health Chai Chuah described a $61m figure as ‘‘unlikely to be acceptable’’, while ministry requests for cost cutting were met with a warning of ‘‘significant service cuts of unprecedented scale’’.

National has pointed to yearon-year health spending increases under its watch, however critics say the increases failed to keep up with demand.

CDHB chief executive David Meates said the $10m variation between the planned and actual deficit represented just 0.59 per cent of the board’s overall revenue. The difference was driven by unpredicted growth in aged residential care, anticipated and completed collective wage settlements, and increased outsourcing to compensate for lack of theatre capacity.

Mental health services, which are under pressure from increasing demand, also required an additional $2m on top of what was budgeted.

Meates said the financial result reflected the multiple impacts of ‘‘New Zealand’s largest natural disaster’’ on facilities and infrastructure, population, health needs and staff.

The CDHB’s 2017/18 annual plan noted its government health funding per capita was lower than much of New Zealand. Board members have repeatedly claimed funding has failed to account for post-quake demographic changes.

The plan forecasted a deficit of $74m this financial year, rising further to $81m in 2019/20.