Four inpatient beds, as well as day respite care services, will close at the Otago Community Hospice in the next month, as the home for the terminally ill struggles because of insufficient funding.
Hospice Trust board chairman Stuart McLauchlan said it was facing a $300,000 deficit in the next financial year and had to make the tough decision to cut services.
"We have been exploring numerous ways of avoiding this but, unfortunately, at the end of the day, we have got to make a responsible decision. We can't have deficits of that level because we would be going broke."
Chief executive Ginny Green said cutting hospice bed numbers from 12 to eight would mean delays to patients being admitted.
The inpatient unit takes patients who are very ill or need terminal care.
Very ill patients often come in for a few days and, once their symptoms are under control, return home.
Funding from the Otago District Health Board had not kept pace with increasing wage costs, and the number of patients being referred to the hospice was also increasing, she said.
The hospice is contracted by the board to provide specialist palliative care services and funds about half of the costs.
The remainder comes from fund-raising.
The community contributed more than $1 million in the past financial year.
Ms Green said the community was essentially paying twice for hospice services, firstly through taxes and secondly through fund-raising. .
The day respite service, which is not funded by the board, looks after patients for a day to give their home carers a break.
Otago District Health Board chairman Richard Thomson said it was under financial constraints and there was a long list of services approaching the board saying they needed more money.
While there was no disagreement the services provided by the hospice were important, so were services for children or for mothers suffering from postnatal depression, he said.
"In the absence of having the money to fund these, we don't have a great deal of choice. Our only choice would be to take funding away from another community organisation and then you would be writing a different story."
Ms Green said support would be put in place for people who could not be admitted to the hospice, but patients who needed medical intervention would have to go to a GP or the Dunedin Hospital emergency department.
Redeployment and redundancy options were being looked at for the three staff who would be directly affected by the closures.
The introduction of an initiative to help caregivers of the terminally ill, such as GPs and rest-home staff, follow a pathway of care in the last 48 hours of a patient's life has also been postponed.
The Community Trust of Otago had given $80,000 towards the initiative, but the hospice could not provide the remaining $40,000 needed.
Referrals to the hospice had increased from 322 in 2006-07 to 406 in 2007-08.
Much palliative care took place in the patient's home or in rest-homes, but about 30% of terminally ill patients referred to the hospice were admitted, Ms Green said.
A large majority of hospice patients have cancer.
