Health Minister David Clark has encouraged the Bay of Plenty District Health Board to explore ways to reduce projected budget shortfalls. Photo / File
Health Minister David Clark has encouraged the Bay of Plenty District Health Board to explore ways to reduce projected budget shortfalls. Photo / File
Government pressure is growing on the Bay of Plenty District Health Board to improve its financial performance, after it submitted another big deficit for 2018/19 – $10.47 million.
The district health board (DHB) reported a $9.85m deficit last financial year and is also estimating $8m and $5m deficits for 2019/2020and 2020/2021 respectively.
It is not alone in forecasting continued shortfalls, either, which resulted in the Government putting DHBs "on notice" last week.
Almost all of New Zealand's 20 DHBs are expected to end this financial year in the red, and are currently heading for a combined potential budgeted year-end deficit of about $346m.
Health Minister David Clark said last week it was "not acceptable" that some DHBs were forecasting deficits to continue for years to come.
He has previously expressed disappointment at the DHBs' collective financial performance, has raised concerns over the likely lack of improvement from 2017/18, and has also threatened a range of options to improve performance "if necessary" – including changes to the membership of boards.
In a letter to Bay of Plenty DHB chairwoman Sally Webb last month, Clark encouraged the board "to consider appropriate activities to ensure that you reduce the projected deficits in the coming years".
However, the Bay of Plenty DHB has also voiced concerns of its own recently.
In its 2018/19 Annual Plan, released last month, the DHB said it was "extremely concerned" over its ability to deliver within the current environment of significant fiscal risk, posed by national employment settlements and service volume pressures.
The DHB's $9.85m deficit in 2017/18 was $7.1m off target, and was also a significant deterioration from the $0.374m surplus reported the year before.
The DHB said in the annual plan that it was "disappointed" to be submitting a higher deficit of $10.47m for 2018/19.
Its general manager of planning and funding, Simon Everitt, told the Bay of Plenty Times Weekend the DHB acknowledged the minister's expectations and was strongly committed to financial sustainability.
He said the DHB was continuously looking at new models of care and remained firmly committed to finding new ways of working and delivering services which would improve access and maintain quality, within its resources.
Everitt said the region's significant growth over the past five years had resulted in pressure across all aspects of the DHB's operations, including hospital services and its community and non-governmental organisation network.
"Also contributing to this pressure is the mix of our population, with an older growing population in parts of the Western Bay along with higher needs populations in the Eastern Bay."
In its 2018 Annual Report and 2018/19 Annual Plan, the DHB also spoke of the impact of changing cost structures (infrastructure depreciation and interest costs, compliance costs and increasing cost of employment settlements), and the need to refocus service provision towards reducing acute demand.
It said it had to service record numbers of elective surgeries (up 797 to 12,112) and acute discharges and emergency department attendances (up 2005 to 80,693) in 2017/18.
It also ensured 94.4 per cent of emergency department patients were admitted, discharged or transferred within six hours, in an attempt to meet the DHB target of 95 per cent.
The DHB said in the annual report that it had mitigated some of the financial impact of the unplanned service growth in 2017/18 through "proactive cash-flow management".
It said this strengthened its financial position, with $22m held in cash and investments available at year end – a significant improvement on the $14.7m from the previous year.
Clark has blamed the DHBs' forecasts on the previous National government and chronic underfunding.
He said the major driver of the deficits was increased staff costs, which included the recent hiring of thousands more full time-equivalent staff.
Clark said his Government had invested $2.2 billion more in DHBs over four years in its first Budget – "the biggest increase in operational funding in the last decade" – and that another $750m was put into capital works in health.
He said this Government would continue to invest more in health, "but DHBs must also spend every health dollar wisely".
Clark did acknowledge it was "clearly challenging" for DHBs to improve their financial position while at the same time introducing new ways of working that will improve access to services.
National Party leader and Tauranga MP Simon Bridges. Photo / File
National Party leader and Tauranga MP Simon Bridges said Labour promised to quickly end DHB deficits, but they had ballooned and were now larger than ever.
"Reflecting the fact that the Government has invested less new money than National did."
Bridges said the strikes and deficits would lead to longer waiting times and cuts to services if Clark did not get on top of things urgently.
"Anecdotally I am already hearing bad stories of people not getting what they need when they need it," he told the Bay of Plenty Times Weekend.
"Dr Clark doesn't know what to do and Jacinda Ardern needs to ask herself if he is up to the job.
"A National Government I lead will prioritise funding for health, education and infrastructure."
The Bay of Plenty District Health Board
•Covers from Waihi Beach to Whangaparaoa Bay, and as far inland as Murupara. •Includes Tauranga and Whakatāne hospitals. •Serves a population of 234,350 residents, for the major population centres of Tauranga, Katikati, Te Puke, Whakatāne, Kawerau and Ōpōtiki. •Employs 3434 permanent and temporary staff.
