SDHB wants funding to reflect size

The Southern District Health Board will call for changes to the population-based funding formula when it is reviewed by the Ministry of Health next year.

Although the formula takes rural populations into account, the sheer size of the board’s catchment area means it’s not enough to cover every corner of the district, board members agreed at a meeting on Wednesday.

In a presentation, board strategy and planning manager Rory Dowding said more than 30 per cent of Southland and Otago residents lived more than an hour’s drive from their closest hospital and 20 per cent lived more than two hours away.

At 65,608 square kilometres, the DHB is geographically the largest in the country.

It’s the sixth-largest in the country by population with an estimated 343,360 residents, the majority of whom live in Invercargill or Dunedin.

The two cities offer the only secondary hospitals in the district, meaning patients travel further for specialist treatment than elsewhere in the country.

National averages show 1.8 per cent of New Zealand’s population lives more than two hours from a hospital. That drops to 0.5 per cent when Southland and Otago are removed from the equation.

Much of the DHB’s funding depends on the characteristics of its population, which is expected to grow 6 per cent to 10 per cent in the next decade, Dowding said.

The district’s ageing population could become a concern in the coming years, with the portion of residents over the age of 65 already 1.4 per cent more than the national average, he said.

This group is considered to have the highest level of needs and is associated with higher costs.

Dowding said the Queenstown Lakes area was expected to see population growth of as much as 50 per cent in the next 20 years, while Central Otago could see a 25 per cent jump – although these estimates could be downgraded in the wake of the Covid-19 crisis.

If these two regions were to be placed under their own DHB, they would be the sixth-largest DHB in the country by area, he said.

The population-based formula is used to divide ministry funding between DHBs and is reviewed every five years. (The previous review took place in 2015.)

It is calculated using the average health expenditure for individuals per year based on their demographic groups and population estimates from Stats NZ (based on ministry assumptions).

This calculation is then adjusted according to the portion of the population who typically experience access issues, the number of refugees or work visa holders in the region, and how rural the region is.