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Fighting Covid-19 has cost the cash-strapped Southern District Health Board more than $7 million so far, on top of an estimated $6.85 million in lost revenue.
The SDHB, which meets tomorrow, recorded one of the highest DHB deficits in the past financial year.
Because of its financial performance, it was ordered by then health minister David Clark to work alongside health ministry officials to try to balance its books.
However, the arrival of a global pandemic into the region has seemingly stymied those efforts.
Chief executive Chris Fleming’s report to the board set out the multimillion-dollar drain on resources Covid-19 had been for the organisation.
Additional costs attributable to Covid-19 were $7.2 million, mainly made up of untaken annual leave, special leave for staff unable to work due to age or health status, casual worker payments and $1.8 million for extra staff and supplies.
The cost of combating the disease was essential expenditure, given that for several weeks there were more Covid-19 cases in the South than anywhere else in New Zealand.
However, it also sorely cost the SDHB in terms of lost revenue because of cancelled or postponed elective surgery.
Before Covid-19 the organisation was at or even slightly ahead of its case weight target. All procedures are allocated a case weight to reflect their complexity.
"On a year to date basis, we are now 1314 case weights behind plan: this equates to revenue of $6.85 million," Mr Fleming said.
The ministry has agreed to fund DHBs for that lost revenue, based on their year-to-date performance until the end of February. That is provided that in June the DHB achieved 85% of its planned procedures, a target which Mr Fleming said the SDHB should have achieved.
"Perversely, if Southern had chosen to optimise the financial performance we could have reduced outsourcing in June," he said.
"However, we have chosen to focus on achieving recovery of the lost volumes as quickly as possible."
The SDHB already has plans in place to catch up on missed procedures, which it estimated would take four to six months.
It would shortly submit plans to the Government in an attempt to secure a share of $282.5million over the next three years, set aside in May’s Budget for planned procedures, Mr Fleming said.
The SDHB’s net deficit for May was $10.8million, $3.5million worse than forecast.
Overall, the SDHB deficit at May 31 was $44million, $9million over budget.
In the last financial year, largely driven by one-off costs such as rectifying Holidays Act underpayments, the SDHB had an $85.8million deficit.
In April, the Government provided $80million in equity support to alleviate the SDHB’s poor financial position.
The organisation’s financial statements reveal extra costs related to Covid-19, such as "infrastructure and non-clinical supplies" being almost $2million over budget, mainly because of the additional cleaning required to prevent Covid-19 in the SDHB’s facilities.
The SDHB had paid $8.1million to providers and suppliers for work related to Covid-19, but that had been offset by extra funding.
There was a thin silver lining to the Covid-19 cloud: fewer surgeries meant the SDHB saved about $4million from having used fewer drugs and clinical supplies than usual.