Hospital deficits a leg iron on health system, say specialists

3.00pm

Financial deficits are weighing down District Health Boards (DHBs), the Association of Salaried Medical Specialists said today.

Statistics New Zealand released figures this morning estimating the 21 DHBs had run up a deficit of $192.4 million for the year ending June 2003.

This compared to a Health Ministry figure of $185 million for the same period. Statistics NZ looked at the costs of running health services, while the ministry looked at all DHB functions such as health planning.

Statistics NZ's figures showed the deficit was an improvement on 2002's $220 million deficit.

The 2002/2003 statistics showed spending continue to outstrip funding. Increases in the cost of employees were the largest contributor.

The association's executive director Ian Powell said deficits revealed the underfunding of health in New Zealand.

"Continuing high district health board deficits are a leg-iron weighing down the health system and frustrating the effectiveness of senior doctors," Mr Powell said.

Mr Powell said those who did not believe the deficits harmed health services were wrong.

"It is inevitable and unavoidable that high deficits affect patient health services. Deficits limit the ability of district health boards to maintain and replace equipment, provide necessary resources, and recruit health professionals in a competitive job market," he said.

Deficits had been common in the early 1990s, but faded away towards the end of the last decade.

"Deficits are a crude indicator of the extent to which district health boards are underfunded," Mr Powell said.

Statistics NZ said DHBs funding increased 7.4 per cent ($280.9 million) to $4.090 billion during the year.

Spending increased by 6.3 per cent to $4.282 billion.

Employee costs were the biggest contributor rising 6.8 per cent to $43.9 million.

The health ministry said yesterday that its figure of $185 million for the deficit was better than expected, despite the Government once hoping it would be as low as $80 million.

However, National party health spokeswoman Lynda Scott said the ministry was engaging in "pure political spin".

Ministry spokesman John Hazeldine said the new figures were good news for the health sector.

"We want DHBs to be deficit-free and we're working with boards to achieve this. Ultimately this is the responsibility of DHBs, and it's pleasing to see their hard work coming up with such positive results," he said in a statement.

Three DHB hospital arms - Auckland, Bay of Plenty, and Lakes - had performed well and were collectively $4 million ahead of target, Mr Hazeldine said.

Lakes DHB had the best results, improving its hospital arm performance by $2.8 million for the year.

Two DHBs - Capital and Coast, and South Canterbury - had the only deficit-free hospital arms for the year to date, and both achieved very close to the planned result.

The results had been provided by DHBs and were still to be audited, Mr Hazeldine said. That was expected to be done by the end of October.

Individual DHB results: (all figures in millions, are deficits unless stated):

Auckland $49m, Bay Of Plenty $6m, Canterbury $10m, Capital and Coast $0.7m, Counties Manukau $48m, Hawke's Bay $7m, Hutt $0.6m, Lakes $0.6m, MidCentral $7m, Nelson/Marlborough $0.7m, Northland $5m, Otago $14m, South Canterbury $0.3m surplus, Southland $6m, Tairawhiti $1m, Taranaki $4.5m, Waikato $0.39m surplus, Wairarapa $0.6m, Waitemata $16m, West Coast $2m, Whangarei $4m, New Zealand Blood Service $3m.

* The New Zealand Blood Service is not a DHB, but is counted by the Ministry in these statistics.

- NZPA