Struggling hospitals $10m short of savings target

By MARTIN JOHNSTON and AINSLEY THOMSON

Auckland hospital managers say they are unable to deliver $10 million of spending cuts demanded by the Government without cutting health services.

The Health Ministry baulked at the Auckland District Health Board's proposed $86 million deficit and required a reduction of $25 million.

Board chief executive Graeme Edmond and his staff have found savings of $15 million, by measures including cuts to the drugs and administration budgets and by capping the expansion of many services, despite population growth.

These savings did not involve reducing services, although they were on the limit of acceptable reductions in quality and might mean some patients had to be slightly sicker to obtain treatment.

"We've gone as far as we can in cost-saving without impacting inappropriately on quality," Mr Edmond said.

To make further cuts, it would be better "to exit whole services" than to continue paring them back.

Asked which services might be axed, he said: "We haven't got into that. We don't yet have the answer to the $10 million."

Board members predict that the service cuts needed to make those savings would be unacceptable to the public and the Government.

"These proposals are not very palatable," said member Vicki Salmon.

Chairman Wayne Brown said: "We don't think the powers that be will want to sign up to them any more than we do."

Mr Edmond said the board and its four big hospitals were facing about 130 job cuts, in addition to the 70 positions that had been axed.

In this week's board meeting papers, a quality and safety official warned members about clinical risks arising from cost cutting.

Changes in the organisation and ongoing shortages of resources were resulting in a loss of skills and knowledge, the report said.

In return for the $25 million cut, the ministry has agreed to give the board $15 million to help pay interest and capital charges. This top-up is in addition to $37 million of deficit support. It declined to comment on what it might do if the full $25 million was not saved.

* Auckland Hospital has been inundated with people suffering from winter ills, forcing it to cancel non-urgent surgery to free up beds.

Some patients have been waiting in corridors for more than 20 hours.

General manager Meng Cheong is urging people to visit their family doctor when they first become unwell and go to the hospital's emergency department only in a real emergency.

Communications manager Brenda Saunders said Starship hospital was also having crowding problems. The campaign to raise awareness of meningococcal disease meant cautious parents were bringing in children showing any symptoms.

nzherald.co.nz/hospitals