SDHB to seek deficit funding

Robert Mackway-Jones
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
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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