Otago and Southland District Health Board managers have been asked to make 5% budget cuts for next year because the boards' expected deficit is $5.7 million higher than the Minister of Health finds acceptable.
In a memo to senior managers of both boards, regional chief executive Brian Rousseau said the draft annual plan for next year showed a deficit of $9.7 million for Otago and $8 million for Southland.
This financial year the board expects to have a deficit of almost $11.95 million, some $2.6 million higher than budget.
In his memo, Mr Rousseau said Health Minister Tony Ryall had made it clear the proposed deficit for next year did not meet his expectations, with Otago required to deliver a deficit of no greater than $7 million and Southland $5 million.
Board departments have until May 8 to come up with ideas on how they could make savings.
Mr Rousseau said he accepted it was difficult and "somewhat unpalatable" but doing nothing was not an option.
The executive had already identified some initiatives, including reviewing the access and amount of community services provided for the elderly, the way price increases are applied in contracts with community services and rural hospitals, saving money through its buying practices, and improving the integration of community and hospital care across the provinces.
While the amount of the deficit was large in dollar terms, it was still a small percentage of the total funding of the board, which was more than $500 million.
