The Southern District Health Board wants to cut costs by 5% for its services and those of contracted providers, as it grapples with an ''awful reality'', chairman Joe Butterfield says.
The board's projected $42 million deficit in 2015-16 was revealed this week in a leaked document released by Labour health spokeswoman Annette King, who said it showed the board was in ''serious freefall''.
The 5% cut demanded from community-based providers has been highlighted recently by affected rural hospitals, but yesterday Mr Butterfield said the same was expected of the board's hospitals.
''It is not realistic to accept a $42 million deficit.''
The Government has funded the health board's deficits for years despite protestations that the board must start to break even.
''I don't think this Government will accept a $42 million deficit ... all of a sudden I suspect there's an awful reality.''
Mr Butterfield said the cost reduction could mean services were provided differently, but declined to specify how this would happen.
The cut to community-based providers has caused confusion because in its recent strategic plan the board talked up the prospect of them playing a more significant role.
Association of Salaried Medical Specialists executive director Ian Powell said the board's approach was one of ''incredible inconsistency''.
''They put so much emphasis on the rural hospitals in their strategic plan and then they gut them.''
The board was ''clutching at straws'' by applying short-term solutions to deep-seated problems.
He said some Southland doctors were ruing the merger of the old Otago and Southland boards several years ago, as promised benefits were not being realised.
Yesterday, Mr Powell addressed an Australian Medical Association meeting, in Canberra, where he told members the Otago and Southland merger had not worked.
''This was not based on strengthened clinical relationships and ignored the challenge of providing health services to such a huge geographic mass with widely dispersed populations.
''It is now considered by many to be an embarrassment in need of regime change and acting as two DHBs with one letterhead,'' he said.
