Health board slashes budget by $80m 'without sacrifices'

Three years ago Capital and Coast District Health Board was told to start digging its way out of a pit of debt, which grew to a monstrous $100 million. Since then it has managed to claw back $80m and now plans to save the rest over the next two years.

It has nipped and tucked spending in the past financial year to save $20m, plus an unexpected $87,000, which chief executive Mary Bonner put down to savings "across a number of areas".

"I don't believe we've made any sacrifices. Basically it's looking at doing things leaner in a more standardised way."

Its financial position was revealed at a board meeting yesterday.

Capital and Coast's operating budget for the last financial year was $893,880,000. Since the five-year recovery plan began in 2009, cost-cutting measures have been enforced, including switching staff coffee from percolated to instant to save $190,000 a year and job cuts to management and administration services in 2010.

The board also cut funding to primary care providers, including Newtown Union Health Service which has lost $273,494 in funding.

The board said yesterday it would not reverse its decision to cut that funding.

Newtown Union would continue to receive $1m in core funding and $1.5m to support its vulnerable population each year.

"This is used for helping refugees and immigrants, primary mental health, a diabetes programme, immunisation and other work focused on those with high needs,” Mrs Bonner said in a statement after the meeting.

Savings of $7.5m were also made over the past two years by standardising surgical supplies.

Using one brand of patient drapes and gowns had saved $1m in the past two years and standardising hip prostheses had an ongoing annual saving of $208,000.

But there were also budget blowouts last year, including $1.3m on outsourcing nurses and $6.3m on outsourcing clinical services. That included paying private hospitals to do operations so the board could meet elective surgery targets.

Capital and Coast has been in and out of deficit for the past decade, however its financial woes were amplified by the cost of building the new Wellington Hospital.

Alongside several other district health boards, it has been propped up by taxpayers' money and last year received $40m in deficit funding from the Government, following $58m the previous year.

Former chief executive Ken Whelan quit in 2010 and said at the time he could not cut costs any further without undermining patient care. However, Mrs Bonner was confident quality of care had not been compromised.

Contact Bronwyn Torrie
Health reporter
Twitter: @brontorrie

The Dominion Post