1 Sep 2016

Population pressures cause DHB budget blowouts

9:54 am on 1 September 2016

Many district health boards still face multi-million dollar budget blowouts, new figures show.

Health Ministry draft figures for the year ended 30 June showed two-thirds of DHBs did worse than expected, all ending up in the red.

Dr Anthony Yung (left) with registrar Dr Georgina Harvey excising a skin cancer. For Karen Browns dermatology story

District health boards blame continued deficits on a growing and ageing population. Photo: SUPPLIED / Waikato Hospital

The combined deficit for all 20 DHBs was $54 million - an improvement on a total $66m deficit the previous financial year.

But boards spent $35m more than they had budgeted for, mostly on staff, outsourced services, clinical supplies and infrastructure.

Many DHBs put those extra costs down to pressures from a growing and ageing population, with more people to treat - including urgent cases.

Waitemata DHB spent nearly $24m more than budgeted in personnel costs over the year, because it did more elective operations than planned and also had higher numbers of surgery, emergency and general medicine patients. Overall, however, the DHB posted a surplus for the year of just under $3m.

Extra staff to meet the growing demand cost DHBs $144m dollars more than planned, mainly for extra nurses.

Auckland DHB said the higher costs for staff were partly down to using bureau or agency nurses to fill the gap.

Outsourced clinical services and clinical supplies cost a combined $40m more than budgeted.

By far the largest deficit was recorded by Southern DHB, which was $35m in the red.

The board, which currently has a commissioner in charge, actually did better than expected, having budgeted for a $36m deficit.

Capital and Coast, Lakes, MidCentral, Taranaki and Tairawhiti DHBs all posted large deficits too - despite some of them budgeting for surpluses.

The Health Ministry has told Health Minister Jonathan Coleman the results reflected the ongoing pressures in the health sector.

Labour Party health spokesperson Annette King, said the sector was under-funded by $1.7 billion.

"The cost pressures are not being met in the budget the Minister of Health is providing, which means that many of them [DHBs] are under severe pressure," Ms King said.

"Some of it comes from increased demand that they're not being funded for, and some of it comes from not being funded for the salaries that they pay to their doctors and nurses."

But Dr Coleman said the underfunding claims were wrong.

The $54m deficit represented just 1 percent of the health budget and deficits were coming down, he said.

"There's always more to do, health is a tough sector.

"The key thing is we're providing more and more services all the time and we've got a very good health system that continues to get better."

This year's Budget gave health an extra $568m and $2.2bn dollars would go in over the next four years to help cope with an ageing and growing population, Dr Coleman said.

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