After securing a five-year contract with the Southern District Health Board last year, the Waitaki District Council-controlled health company's annual report, tabled last month, shows the posted deficit was less than the budgeted deficit of $678,871.
But, Mr Swann said, the company would need more money from the health board and increased revenue from services.
A restructure of the way the hospital delivers its services was under way.
``We continue to have funding pressure, the negotiations around funding with the [the board] is ongoing and it basically always will be,'' he said.
Depreciation spending of about $590,000 and an increase in staff costs of $394,482, to allow for the establishment of nursing swing shifts, played a role in the deficit. It was the third year in a row Oamaru Hospital had recorded a loss.
``We did better last year than anticipated, in a difficult environment where we were negotiating a new contract. We hadn't had any funding increases from the SDHB and our cost structure was, in particular our staff costs, were increasing,'' Mr Swann said.
``Our ... revenue remained pretty static, and that's the challenge. And it is a challenge. We want good news, but at the same time the reality is that we need to get our model, as efficient and effective as we can in delivering the services we deliver. And we need to increase revenue.''
The board was aiming to run ``at the minimum'' at break even, but he did not know when the health company could realistically expect to do that.
The annual review period with the health board, as the health company implemented its service delivery restructure, would be important in reaching that goal.
The number of people seen at the emergency department - a point of contention between the health company and the health board before contract negotiations began - continued to decrease last year with 7456 presentations, down from 7612 the year before and 7742 the year before that, the report shows.
Of those who presented at the emergency department, 17.1% were admitted as inpatients to the hospital, and 4.5% were transferred to Dunedin Hospital.
A third, 33.3%, were accident-related, and 15.1% of presentations to Oamaru's emergency department arrived by ambulance.
Through the hospital there were 220 minor operations, 3879 physiotherapy outpatient and community treatments, 13,482 district nursing visits and 87 births. As well,
61 patients were treated in 10 mobile surgical visits.
