Editorial: What's the real reason for the DHB's deficit?

The Whanganui District Health Board has recorded a $3.8m deficit.

A hospital on a budget is a scary thought, conjuring images of surgeons checking the bank balance or rummaging around the back of the couch for coins before performing lifesaving surgery.

Of course, that's not the reality and those who present at hospital in need are well looked after.

So, it begs the question; what does Whanganui District Health Board's recent $3.8m budget deficit actually mean?

DHBs around the country are collectively $240 million in the red, and while Whanganui's deficit is small portion of that, it is symptomatic of a wider problem.

Are all our DHBs financially incompetent, wild spenders?

Not likely.

A DHB budget can't be thought of like that of a household or a business.

It doesn't earn revenue but instead is given an amount of money, by all of us as taxpayers, to look after our health.

DHBs then have to do whatever is put in front of them with that (on paper) fixed budget.

It makes sense when board chair Dot McKinnon puts the deficit down an increase in health issues – more emergency department presentations, an increase in long-term conditions and an increase in the elderly population - which translates to an increase in use of the public health system.

That's obviously going to lead to financial pressure outside the DHB's total control which is why a DHB budget has to be seen as more of a guide than anything.

There has to be forensic scrutiny of administration and management costs where budgets should be strict and overspending not tolerated.

But when it comes to healthcare, it costs what it costs.

There's a great moment in the British comedy-drama series, Derek, where the manager of a rest home, anxious about inspectors running the rule over the books, flips the story around.

"If it costs more than some person in a suit thought it would, it doesn't mean we're overspending, it means your stupid guess was wrong," she says.

Maybe it's not the DHB that is in deficit then. Maybe it's the funding we give them.