One of the country's largest district health boards is considering cutting staff costs and making other changes to reduce a $12 million deficit.
Auckland District Health Board has told staff in an internal email that its spending this year is financially unsustainable.
In the email obtained by Radio New Zealand, DHB chief executive Ailsa Claire said the underlying deficit is a problem that could not be covered by opportunistic saving.
She said significant change is needed urgently regarding operating theatre costs, children and older people's services and services where there are significant losses. It lists those as cardiothoracic surgery, vascular surgery, general surgery, gynaecology, neurosurgery, orthopaedic surgery, respiratory medicine and intensive care.
Ms Claire said staff costs must be reduced and a plan is needed or they were in danger of the board or others doing it for them.
In a statement later, she said the DHB was within budget overall but would have to deal with areas that are over-spending.
Ian Powell, executive director of senior doctors' union the Association of Salaried Medical Specialists, says managers have said there won't be staff redundancies but vacancies may not be filled.
"So, it'll be retrenchment around the size of the workforce and we might see in relative terms that workforce declining over time, while the demands on the health system keep going." He said it will add pressure to already stretched staff and that would compromise patient care.
Auckland City Hospital is the country's largest public hospital and the DHB is the third fastest growing in the country. It provides specialised services for other DHBs and has an annual budget of almost $2 billion.
Radio New Zealand's health correspondent says all DHBs are under intense Government pressure to balance their books.
The Auckland board said in its annual report it faces a major challenge in meeting growing demand for services from a rapidly growing population, 34 percent of whom are in deprived areas.
Nurses Organisation's industrial adviser for the DHB sector, Lesley Harry, told Radio New Zealand's Nine To Noon programme nurses are worried they could be targeted in cost-cutting, and there is no fat left in the system.