The board yesterday confirmed Ashburn had been awarded a $130,000 three-year contract to provide community education and co-ordinate care for sufferers of eating disorders.
Last week, Ashburn, New Zealand's oldest private psychiatric hospital, confirmed it was shedding nearly 10 full-time equivalent staff and combining two inpatient wards after losing ACC and government funding, as well as reduced private sector demand because of the recession.
It is still in talks with staff about who will go.
A Ministry of Health five-bed $500,000 eating disorders contract was not renewed at the end of last month. Mr Smith said while losing the funding contributed to Ashburn's woes, it was not unexpected, as it was an interim service while board-led services were established.
The new contract was out-patient only and would be delivered almost exclusively in the community, throughout Otago and Southland.
It would be led by Ashburn medical director Dr Brett Ferguson, an internationally recognised authority on eating disorders.
As well as using Ashburn's regional infrastructure, which includes clinics in Invercargill and Cromwell, staff would go into schools and public gyms to raise awareness of an often hidden problem, he said.
A key facet was supporting and educating GPs, who often lacked the skills to treat eating disorders.
"If we can give [GPs] the help, they will be able to cope better than at the moment."
Service users could be directed to Ashburn for counselling, but this would be minimal.
With just $130,000 annually, the service, which starts next month, would not be able to meet the demand for help, but that was true of many health contracts, he said.
Outreach services were still relatively new and a challenge for Ashburn, but the clinic had rich skills and experience from which to draw, he said.
Finance and funding general manager Robert Mackway-Jones said the new service was the result of a Ministry of Health strategy emphasising family-centred services provided across primary, secondary, and tertiary levels.
