Robert Mackway-Jones
The Southern District Health Board will seek $16.65
million to meet its deficit and fund future capital works.
At the board meeting yesterday in Dunedin, chairman Joe
Butterfield said it made sense to draw the government funds
in advance, in a "largely technical" move.
Of the total, $6.65 million was a loan for future capital
work to be kept on interest-bearing deposit until needed.
The DHB also sought equity support of $10 million in advance
to fund its anticipated deficit.
Board member Mary Flannery received an assurance the money
would not be spent for anything other than intended.
Joe Butterfield
Mr Butterfield said: "It's a question of building up cash
reserves to meet capital expenditure in [the next] two to three
years, so when we come to spend it, we have the cash".
Finance and funding general manager Robert Mackway-Jones said
the DHB faced budgetary "pressure points" in the final half
of 2011-12. The year-to-date position had been better than
expected, but board members should not expect "plain sailing"
for the remainder of the year.
The board faced a $10 million deficit. While the forecast was
$10.5 million, initially favourable conditions raised hopes
of posting a considerably better result.
Negative drivers were the write-down or repair work for the
old obstetrics building at Southland Hospital, which was
found not to comply with the new building code.
That would cost up to $2.7 million. The board was still
considering what to do.
It also faced other "big ticket" costs brought about by
investing in new services, and staffing new facilities.
Asked by Mr Butterfield whether $1.7 million of doubtful
debts was factored into the expected deficit, Mr
Mackway-Jones said it was not, but he was confident the DHB
would be paid back a good portion of that.
Bad debts, often accrued through tourists' medical costs, had
risen significantly in the past two years, Mr Mackway-Jones
said.
The DHB's financial position would be worse if not for
$800,000 unspent primary health organisation funds, which
underlined weaknesses in other areas, Mr Mackway-Jones said.
• The DHB yesterday adopted a proposal to retain monthly
meetings for its hospitals' advisory committee.
Last year the board decided to reduce the meetings to six per
year, but yesterday agreed to keep meeting monthly, which
works out at 10 a year.
The move to fewer meetings was rejected earlier this week by
the hospitals' advisory committee.
- eileen.goodwin@odt.co.nz
Board deficits cut by $100m
District health board deficits have been slashed from a
combined $155 million in 2008-09 to $55 million in 2011-12, a
briefing to incoming Health Minister Tony Ryall says.
The briefing, outlining challenges and trends in the health
and disability sector, appeared on the Ministry of Health's
website yesterday.
Ministry costs were also being cut, with a 12.2% reduction in
full-time equivalent staff between June 2009 and June 2011
contributing to lower running costs ($198 million in 2012-13
compared with $204 million at present).
The sector as a whole had adapted to lower spending increases
in the past three years, with new ways of providing care and
paying for services enabling a more efficient use of
resources.
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