Just who is driving urgent cost-cutting at the Southern
District Health Board was under scrutiny yesterday as the board
mulled its parlous financial position.
The mood at the meeting in Invercargill was dire as board
members digested the new forecast $13.9 million deficit, $4.9
million more than originally forecast.
The board is under more pressure than usual to meet its
financial targets, because it will face big capital charge
costs for the Dunedin Hospital clinical services building
rebuild. Board member Dr John Chambers took issue yesterday
with urgent cost-cutting decisions made last month involving
staff recruitment, travel, and delegation spending levels.
Dr Chambers, also an emergency department specialist, said he
had become aware of various high-level meetings involving
Ministry of Health officials at which decisions were taken
without input from elected board members. Dr Chambers said he
had been approached by a doctor colleague who asked why
cost-cutting was needed before the board could afford the
Acting chairman Tim Ward said the district health board was
under intensive monitoring because of its financial position,
which involved meetings with the chairman, senior management
and Wellington officials.
Crown monitor Dr Jan White pointed out that if decisions were
operational, they need not come before the board anyway.
Chief executive Carole Heatly said she had made the
cost-cutting decisions herself after discovering a rapid
financial deterioration. She said she had called in senior
executives over a weekend, had told the board chairman on
Sunday, and changes were made the following day.
The board received about $840 million a year, and ought to be
able to provide its services for that. For every $100 million
it would receive for the hospital rebuild, it would need
about $10 million a year for interest and depreciation, Ms
Board member Richard Thomson said the public and many health
board staff did not grasp the fact the Government did not
simply hand out money for the rebuild - it carried interest
and other costs.
Approached for comment, Health Minister Tony Ryall said
Southern's deficit was disappointing, but less than the
combined Otago and Southland health board deficit of $21
million when the National Government took office.
''All district health boards strive to live within their
budgets. Looking for waste and efficiencies is business as
''The best way district health boards can ensure they have
long-term secure services is through a sound financial
''The planning for the Dunedin Hospital upgrade will
continue,'' Mr Ryall said.