Otago Daily Times

Virus ups SDHB costs by $26m

- MIKE HOULAHAN Health reporter

PROJECTS have been delayed or cancelled and services are managing bottleneck­s of patients as the Southern District Health Board copes with the ongoing impact of Covid19.

The pandemic has forced the SDHB, which last year had one of the highest DHB deficits in the country, to spend about $26 million extra on unbudgeted operating costs and $1.2 million in capital expenditur­e.

‘‘However, we know the impact of Covid in terms of our operations goes wider than this,’’ SDHB finance executive director Julie Rickman said.

‘‘A range of projects slowed or stopped during the intense organisati­onal focus on addressing Covid19, and there may be indirect cost and efficiency implicatio­ns as a result.’’

An issue like Covid19 was not contemplat­ed when the SDHB drew up its 201920 budget — in which it predicted a $10.9 million deficit, down from $85.8 million the previous year.

The arrival of the pandemic in New Zealand in February, and then in the southern region days later, resulted in the SDHB incurring millions of dollars in costs to prepare for possible cases in hospitals and in the community.

‘‘This included the need to set up systems right across the southern health sector to treat Covid19 patients.

‘‘While we are fortunate these were not tested to the extent we feared possible, the preparatio­n work was still required.’’

The SDHB, then and now, had to find the money for Covid19 testing and also had ongoing costs from maintainin­g the health system in readiness for any future change in alert levels.

‘‘In some instances we have needed to modify our ‘business as usual’ to reflect the requiremen­ts of new normal,’’ Ms Rickman said.

‘‘For example, we are continuing with increased levels of infection prevention and control requiremen­ts than prior to Covid19.’’

The SDHB’s burgeoning deficit, which resulted in ministry staff being detailed to work with the organisati­on on steadying its finances and Crown monitors being put in place, was highly inflated last year due to oneoff costs.

However, in November the board warned the ministry its latest deficit projection had risen to $15.7 million.

The ministry recently revealed that nationally DHBs had collective­ly spent more than $600 million to fight Covid19.

The SDHB’s spend ranked sixth out of 20 health boards, a figure which likely reflected the enormous efforts of southern health profession­als when Covid19 was detected in the region last year.

Clusters of the disease broke out in Queenstown and Bluff, and cases linked to a Dunedin high school and Lakes District Hospital required a rapid response so any possible spread of Covid19 was prevented.

Ms Rickman said that, overall, the DHB had been well supported by the ministry to manage the financial implicatio­ns of Covid19.

‘‘They have provided support as we go and direct Covid19 costs are for the most part being covered.

‘‘They have enabled expenditur­e decisions to be made swiftly, have accommodat­ed the reduction in services provided (for example, elective surgeries) without reducing this income, paid for equipment such as ventilator­s and have assumed responsibi­lity in areas such as national PPE procuremen­t to achieve consistenc­y across the sector.’’

However, the costs to the SDHB had been greater than just the emergency response.

During Alert Levels 3 and 4 many patients had appointmen­ts and procedures postponed, a backlog the DHB was still trying to clear.

It also believed those deferrals had contribute­d to the recent surge in complex cases arriving in emergency department­s, a phenomenon which had contribute­d to bed block and resulted in elective surgery being deferred over December and January.

‘‘While the ministry has agreed to fund us to catch up on treatment deferred by Covid19, we now face the challenge of finding the staff and resource capacity to care for the extra volumes caused by lockdown, on top of the existing workload,’’ Ms Rickman said.

‘‘These indirect costs [from Covid19] are continuing to be felt, and have been a lesson in the ongoing consequenc­es of such a disruption . . . The overall cost to our society as a whole has been much less than might otherwise have been the case.

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