HEALTH CHECK

A leaked Treasury report warns the financial performance of district health boards (DHBs) has deteriorated severely over the past two years, and flags eight regions where there are serious concerns over services.

The results leave the Ministry of Health with two options, according to Labour’s Annette King: increase funding, or expect cuts in services.

The report measured financial and non-financial performance of the country’s 20 DHBs, and was presented to Health Minister Jonathan Coleman in June.

After several years of improvement, the boards lost a total of $7 million in 2014, rising dramatically to $66m last year.

The report predicts poor financial resilience will mean several DHBs requiring additional support from the Government in the near future, including Canterbury, Wairarapa, Waikato, Southern, and Tairawhiti (Gisborne and the East Cape).

Treasury health team manager Ben McBride said continuing problems at Southern and Canterbury DHBs were the main contributors.

‘‘This is a report we provide for the minister of health. It’s not a public document,’’ he said.

He was unwilling to elaborate on the advice the Treasury would be offering to Coleman. ‘‘Overall productivity is pretty stable, health indicators are mixed but generally positive overall.’’

The Ministry of Health’s chief adviser on DHB funding, John Hazeldine, said deficits had improved in the past year, coming out at a $54m loss.

‘‘Generally, deficits have no impact on patients. However, from a health infrastructural viewpoint, it is important that services over time are sustainable ... and that DHBs are able to live within their income,’’ he said.

King, who is Labour’s health spokeswoman, disagreed, saying the results would put community and primary healthcare under pressure.

‘‘They cut the fat, they cut some of the muscle, and now they’re down to the bone. They have gone as far as they can in efficiencies and they can’t save much more.’’

She accused Coleman of being unwilling to acknowledge the warning signs. ‘‘His head is firmly stuck in the sand.’’

The Public Finance Act did not allow deficits to run into the next year, so either more money would need to be injected or the public would see cuts, she said.

Twelve out of the 20 DHBs showed deficits in 2015, a figure expected to drop to four, according to 2016 plans.

Southern DHB was the worst financial performer, followed by Wairarapa, Tairawhiti, Hutt, Lakes and Canterbury. The only DHB to achieve green lights across the board was Counties Manukau.

Capital & Coast District Health Board performed poorly, with serious concern registered in the amount of preventable cases ending up in hospital and moderate concern registered with regards to its balance sheet, financial productivity, emergency department wait times and rates of inhospital death due to heart attack.

Southern interim chief executive Chris Fleming said significant work had been undertaken under a government-assigned commissioner, and the target was to break even by 2020.

‘‘We also improved our performance against all health targets across the year. This gives us confidence we are moving in the right direction.’’

Wairapapa and Hutt DHBs split over the previous year, and a Wairapapa spokeswoman said its newly formed executive was well aware of the financial situation.

‘‘There are a number of challenges to the current financial situation, including an ageing infrastructure that needs rejuvenating, particularly in the area of IT ... This places funding demands on the DHB.’’

Canterbury DHB chief executive David Meates criticised the report for failing to take into account the impacts of the earthquakes, particularly in increased demand on mental health services. ‘‘There appears to be little room in New Zealand for evidence in policy decisions.’’

Concerns over non-financial indicators were mainly centred on rates of preventable hospital admissions. The Treasury identified 11 DHBs where patients were turning up to hospital when they could have been cared for by GPs.

Royal New Zealand College of General Practitioners president Tim Malloy said this reflected an erosion in investment in primary care.

‘‘The net result, of course, is that it shifts the balance between prevention and treatment, and therefore increases the pressure on hospitals as a result.’’