‘Significant concern’ over CDHB cashflow

Bills risk going unpaid by next month if the Christchurch District Health Board (CDHB) does not get Government support, a new report says.

The finance report, prepared for a public CDHB meeting on Thursday, said there were ‘‘significant concerns’’ about funding following the Covid-19 crisis.

But both the Ministry of Health and the CDHB said in written statements they were confident defaulting on payments would not happen, despite a finance report which identified the end of July 2020 as ‘‘the date [the CDHB] will no longer be able to pay our debts’’, as they would breach their overdraft limit.

In a statement, CDHB executive director of finance Justine White said they worked closely with the Ministry to manage the cashflow to ensure there was enough money to pay suppliers and staff.

A spokesman for the CDHB confirmed that ‘‘suppliers’’ covered all bills the CDHB has to pay in order to deliver the region’s healthcare, such as electricity, medical supplies, and staff pay.

White was confident the Ministry of Health was aware of the DHB’s liquidity and would assist if necessary.

‘‘We will continue to use all available mechanisms at our disposal to ensure we remain cash solvent,’’ White said.

A Ministry of Health spokeswoman said they were confident the health board would not default on payments due to ongoing work by the DHB towards a more sustainable financial position and funding allocated to DHBs in this year’s budget.

The CDHB would receive $341 million of extra funding from the Government over the next four years, the spokeswoman said.

The report stated extra expenses from the Covid-19 response has contributed to the cashflow problem.

In April, additional costs associated with Covid-19 totalled $8.071m.

Recent cashflow at the CDHB was helped by an equity injection of $130m from the Ministry of Health, according to the report.

It stated: ‘‘this has alleviated our liquidity issue in the short term but we will need a permanent solution over the next month or two.’’

The report said the opening of Christchurch Hospital’s new Hagley building, expected later this year, would add ‘‘stress points’’ to operating costs.

The report notes ‘‘financial downsides’’ to the continued delay of the new $500m building.

Forecasts of the CDHB’s net operating results show they expect a $11m April deficit to grow to just over $25m by June.

CDHB chairman, Sir John Hansen, said cashflow was a management issue and declined to comment.