DHB financial performance data shows big projected deficit

Health Minister David Clark has put DHBs on notice over deficits, again. Photo / Mark Mitchell

Long-delayed monthly financial performance data shows district health boards are heading for a big combined deficit of $346 million.

The Ministry of Health finally released today monthly updates on financial performance for DHBs, which were halted at the end of June last year.

They show almost all DHBs are expecting to end the current financial year in the red, with a potential budgeted financial year-end deficit for all DHBs of about $346m.

Health Minister David Clark said the forecasts were disappointing but not unexpected, putting the blame on the previous National government.

"Our public health service was chronically underfunded by the previous government. For nine years DHBs were financially squeezed and staff were put under huge pressure," he said in a statement.

He said the major driver of DHB deficits was increased staff costs, including the hiring of an additional 2667 full-time equivalent staff in the first half of the 2018/19 year, at a cost of about $126m.

That figure included 440 extra medical staff, 1271 more nurses and 303 allied health workers.

"In our first Budget we invested $2.2 billion more in DHBs over four years – the biggest increase in operational funding in the last decade. Another $750 million was put into capital works in Health. However, we always knew that it would take more than one Budget to address the legacy of underfunding.

"This Government will continue to invest more in Health so that DHBs can continue to deliver the quality services that the public expect and deserve. But DHBs must also spend every health dollar wisely.

Clark warned DHBs in a letter in December last year to pick up their financial game or face more governance and possible board changes.

Today he said it was "not acceptable" that some DHBs were forecasting deficits to continue for years to come.

"In that letter I made it clear I am monitoring the performance of all DHBs closely and will consider a range of options to improve performance if necessary, including changes to the membership of boards. I also raised these matters directly with board chairs and chief executives last week," he said.

"The Government is managing significant cost demands after nine years of underfunding across the board, but we are prudently managing the books and running a surplus. We expect DHBs to display the same sort of financial discipline."