Funding fix could cut health deficits

Fixing the population-based funding formula could remove up to a third of the Southern District Health Board's deficit, chairman Joe Butterfield says.

Mr Butterfield usually dismisses concerns about the controversial formula, which distributes health money by a head count, with adjustments for rural areas, older people, and other considerations.

He was asked about figures provided by health policy authority Prof Robin Gauld, which show SDHB received less in critical adjustments than South Canterbury District Health Board.

South Canterbury received four times more per patient to recognise its proportion of older people, and more than twice as much per patient for being rural.

''Sounds crazy, doesn't it?'' Mr Butterfield said.

But the board's problems were deeper than the funding formula.

''I have never said that the funding formula is totally fair, but it's what we live with. And even if it was changed, the amount that's involved would not fix our deficit.''

The deficits were ''north of $30 or $40 million''.

Fixing population-based funding might remove ''a third of that [deficit], but it won't fix the lot of it''.

The figures were five years old, but the discrepancy would still exist, Prof Gauld said.

Mr Butterfield said the Ministry of Health was reviewing the formula.

Prof Gauld has criticised that review for not being independent.

Because of the board's persistent deficit problem, it could be sacked, and a commissioner installed until DHB elections next year.

eileen.goodwin@odt.co.nz

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