Health minister happy with level of funding top up

A $28 million funding top up to Northland DHB effective today will be nowhere near enough to cover the $47 million that has been cut from the organisation in "real terms", the Labour Party says.

Labour Party health spokeswoman Annette King said the DHB's funding had shrunk since 2010, resulting in "quite serious changes that would affect patients".

Health Minister Jonathan Coleman said the claims were "totally incorrect".

"Northland DHB will receive an extra $28 million in new money this year, taking the DHB's total funding to $580 million for 2016/17. That's an extra $160 million in funding over the last eight years."


He said ministry advice showed health spending had kept pace with population growth, ageing populations and inflation.

But Ms King said the Government based its calculations on one of the biggest cost pressures - wages - on the Labour Cost Index, whereas the health sector wage growth was influenced through collective agreements.

She pointed to The Treasury's 2013 Budget release, which advised the Government that the Labour Cost Index and Consumer Price Index forecasts used in tracking health funding did not reflect actual cost pressures in the sector.

"It's a sneaky way to cover the cost-cutting in health," Ms King said.

Mr Coleman said the Government had increased health funding during "tough world times" by an average of $500 million a year.

"Labour only talk about the dollars in health - we're focused on results. You'd struggle to find a health service that hasn't improved over the last eight years."

Labour also pointed to Northland DHB's "efficiency programme", under which they had been asked to make about $5 million of savings against their $558 million 2015/16 budget.

Northland DHB's general manager finance, funding and commercial services Meng Cheong said it had been a "real challenge" to balance the books, "in the face of significant hospital activity that has continued unabated throughout the year".

It achieved a small surplus for the 2015/16 financial year, despite running at a $2.77 million deficit for as of March and its nursing budget being more than $2 million overspent.

"For them to get a so-called surplus it'll be done with smoke and mirrors accountancy," Ms King said. "I don't blame the DHB, they are doing the best they can with what they've got and the priorities put on them."

Mr Cheong said the DHB had not used the holding of clinical posts as a cost saving measure, as DHBs elsewhere in the country had. Rather, it had focused on reducing bills, stock, travel and vehicle costs.

It was also looking to increase the number of patients receiving a specialist assessment or surgery under the current capacity. This was done by increasing the use of e-medicine tools and reducing surgery non-attendance.

Ministry of Health acting director DHB performance John Hazeldine said all Government agencies were expected to make efficiencies.