A report released this week says clinical staff are in ''two camps'', one of which is willing to ''exploit division'' to get its own way.
When it reached financial crisis-point this year, the board called in Nelson Marlborough DHB chief executive Chris Fleming, whose March report outlines his view.
The report says managers need support from the board - which has subsequently been sacked and replaced with a commissioner - to make ''painful'' changes.
''The southern community has a history of very public expressions of concerns whenever there are changes which could impact on services or staffing across the district.
''This has in the past resulted in reluctance from the executive team, board and the National Health Board [part of the Ministry of Health] to support initiatives despite the evidence of the most sustainable outcomes.
''The result has seen `victories' within the community but victories that have come at considerable expense to the district health board.
''Examples of this include tertiary level services such as neurosurgery, the challenges of health services in [Queenstown Lakes], the recent issues related to the potential outsourcing of food services, through to the Stop Dunedin Hospital From Being Downgraded [Facebook page].''
The report was written about the time the board delayed the decision on food outsourcing to give unions more time to argue against the proposal.
It was later approved, so it was not one of the ''victories'' in the end.
Dunedin woman Kay Murray, who organised an 8000-signature petition opposing the food outsourcing, said people paid tax and had a right to have a say over their health services.
Ms Murray said the people protesting against the food outsourcing simply did not believe the promised savings would be realised.
The move would not solve the DHB's money woes.
The Otago Daily Times requested the report in April, and then made an urgent request last Friday, but the board only released it this week, after it had been leaked to another news outlet.
''Equally, clinical staff have learnt that response and reactions are generated by creating crisis within the organisation and the community,'' the report said.
''There is plenty of evidence that board and clinical staff alike are very adept at utilising the media to generate attention and action on issues.''
Management needed to be backed ''to the hilt'' by board members to make ''tough calls even if some of these may be painful in the short term''.
''The perception internally appears to be in two camps. Firstly, staff who are prepared to tackle the challenges but who perceive that at board or National Health Board level they simply wish to quell any potential noise or criticism of the DHB or health system.
''There is the second camp which are staff who are aware of this situation and who are prepared to challenge and exploit division to suit [an] end.''
When contacted for comment, Association of Salaried Medical Specialists executive director Ian Powell bristled at what he took to be a dig at the vocal senior doctors' union.
''It almost feels like a stereotyped answer that someone writes without having been involved in it,'' he said.
''I think the biggest problem, which the board didn't address, was the culture of the senior management.''
The report was ''compromised'' because no chief executive would dare conclude another board's problems stemmed from under-funding.
''I can't imagine any chief executive of any other DHB being prepared to put their head on the block and say under-funding is a big issue.
''So I think the report, as a consequence, had to look for other things.''
The report said it would make no comment on the adequacy of funding.
It said aspects of the population-based funding model could be challenged for potentially disadvantaging the South, including whether the model recognised the area's tertiary-level service costs, and lower property values, which hiked the cost of residential care subsidies.
However, concern about the funding model should not be used as an excuse not to find ways to live within the allocated budget, the report said.
It identified a 29% rise in medical staffing costs over a five-year period, during which revenue increased 13%.
Mr Powell said medical staffing costs were higher in the South because of the demands of two base hospitals, in Dunedin and Invercargill.
Also, doctor numbers increased in recent years because there were more medical graduates.
The report said the University of Otago added to the board's financial burden through joint clinical-academic appointments.
''The needs of the university are often cited as reasons why configuration of services cannot change. As such the university should be challenged to face the implications and pressures this places on the Southern District Health Board.''
Adding to the board's woes was ''considerable turnover'' in its finance team, particularly business analysts, meaning a loss of institutional knowledge.
Chief executive Carole Heatly and University of Otago health sciences pro-vice-chancellor Prof Peter Crampton declined to comment.
Mr Fleming could not be reached for comment.
