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Health Minister Andrew Little has demanded that the cash-strapped Southern District Health Board break even in the next financial year.
However, SDHB chief executive Chris Fleming has warned the board, which meets tomorrow that getting the organisation, which recorded a deficit of $85.8 million in the past financial year, back into the black would be easier said than done.
"These expectations are going to be extremely difficult to achieve," he said.
"Our current annual plan had a $10.9 million deficit, reducing to break-even in 2021-22.
"However, there are four specific issues which had not been anticipated at that stage which are ongoing Holiday Act implications (estimated at $7.5 million), accelerated depreciation on Dunedin Hospital (estimated), introduction of Matariki as a public holiday (estimated at $1 million), and further expectations from Care Capacity Demand Management (CCDM) which is still being quantified."
All health boards are sent an annual "Letter of Expectations" by the minister, and DHBs — which racked up a combined gross deficit of just over $1 billion in the past financial year — are usually enjoined to do better financially.
However, Mr Little has been firmer than usual in this year’s letter, warning that DHB annual plans would not be supported without a commitment to break even.
"Strong fiscal management is critical to support our collective ability to invest more in new models of care and in primary care and population prevention approaches."
The SDHB was told late last year that it was now projected to record a $15.7 million deficit.
A financial report to be considered by the board tomorrow said it recorded a surplus of $2 million in January, almost as per budget, but for the year to date it has a $10.9 million deficit, having planned to be $3.6 million in the red.
Mr Little said the pace of implementation of CCDM — a safe staffing accord agreed to in 2018 as part of the settlement of the employment contract between nurses and DHBs — should be accelerated.
"I want to be clear that full implementation of CCDM includes annual full-time equivalent calculations and ensuring agreed budgeted nursing and midwifery FTE are in place," Mr Little said.
Mr Fleming said the SDHB had made significant investment in nursing and midwifery staffing in the past two years.
"However, we continue to see challenges in matching resource to demand."
Mr Fleming said this year the region would hire its largest intake yet of 93 new nurses, 64 of whom would be employed by the DHB.
Those graduate nurses had to complete six weeks of working alongside an instructor before becoming a part of the rostered workforce.
"We, therefore, hope to see some improvement in resourced beds from mid-March following this six-week period, and a second smaller cohort commences in April."