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LMC is a primary birthing unit but under the Southern District Health Board maternity services review it becomes a "mother and child hub".
LMC’s owners, the Northern Southland Health Company charity, believe the number of births in the region was the figure used for a legal opinion on service provision.
However, NSHC said the number of pregnancies would give a truer figure for how extensively the service was used, and reflect the service coverage schedule agreement between DHBs and the Ministry of Health.
"From the information directors have received so far it looks like for that legal opinion they only received one year of birth data," NSHC director Carrie Adams said.
"This contract refers to pregnancies in our area, not births, so it can be argued they are comparing apples and oranges there.
"The basis of the legal opinion saying ‘you don’t need a facility there, DHB’ in our head, has been looking at the wrong measurement."
The service coverage schedule said a primary maternity facility must be provided in a catchment of 100 pregnancies where the unit is an hour’s drive from a secondary unit, namely a hospital.
The SDHB addressed this issue in its review, and said its independent legal opinion was that the relevant clause was "imprecise and does not lend itself to one single obvious interpretation."
"We think SDHB’s proposed interpretation of clause 4.8, applied to Lumsden, is reasonable and lawful," the opinion said.
"It follows that we do not think that SDHB is under an obligation to continue to fund the Lumsden facility as a primary maternity facility by virtue of clause 4.8 of the SCS."
A letter from director of health Ashley Bloomfield to SDHB chief executive Chris Fleming echoed that legal opinion, and said "the requirements of the SCS allow a level of flexibility, and the ministry’s view is that the SDHB has followed the proper process in considering compliance with the requirements and how the requirements are met".
Health Minister David Clark asked Ministry of Health officials to review the SDHB’s report to ensure the concerns of the Lumsden and Te Anau communities had been addressed.
Dr Clark acknowledged the controversy about the plan, and said that was why he commissioned further work on the issue.
"The expert advice to me is that the DHB’s plan will deliver high quality care and service across the region," he said.
"It is important to remember that the DHB has decided to create new maternity and child hubs in both Wanaka and Te Anau.
"These are entirely new services that will improve support to mothers in those towns and surrounding areas."
However, National health spokesman Michael Woodhouse called the ministry’s advice to Dr Clark "a whitewash".
"It is extraordinary, and nothing more than a rubber stamping exercise which does nothing more than acknowledge the concerns of the community," he said.
"There was no effort to test them, or engage the community."
MOH service commissioning director Jill Lane said the ministry, including senior maternity advisers, reviewed the SDHB strategy document, its recommendations, and supporting data.
"It took into consideration clinical risk, geographical location, workforce issues, sustainability of services, and equity of access across the region as a whole," she said.