DHB takes action to tackle likely deficit
The Nelson Marlborough District Health Board could end up with a $3.5 million deficit if it does not make savings soon.
Staff are being asked to take two weeks leave over Christmas when surgery will be restricted to acute cases.
The board had a $1m net loss in October, bringing the year to date deficit to $1.82m, and the financial position was discussed at the board's monthly meeting yesterday.
Board member Gerald Hope said given the meeting was in public, it would be remiss of him to not ask what the likely year end result would be if the DHB continued the way it was going.
General manager of corporate services Nick Lanigan said that if no further savings initiatives were found, the year end result would be a $3.5m deficit.
Outside the meeting Mr Lanigan said looking at ways to improve the current financials was a "top priority".
"The net result is about what was forecast, but we are concerned about the two new items [which have become issues]."
The new issues are $1m overspending incurred when patients from the Nelson Marlborough region are treated in other hospitals and a report indicating that about $1.5m of savings targets for the Rutherford Savings scheme will not be reached.
Mr Lanigan said these costs tended to be patients who needed to be transferred to other hospitals for treatments that could not be provided by Nelson Marlborough. The reasons for an increase in this area were being worked through.
"It's an area of analysis."
Also adding to the financial stress was an increase in demand for medical and surgical services, particularly in cardiology and vascular, which resulted in significant overspends in clinical supplies.
Mr Lanigan said there were various actions under way to find savings. With Christmas and New Year coming it would restrict the number of elective cases, and focus on doing acute cases. It was also asking staff to take off the two weeks over Christmas as annual leave, he said.
The report said total savings of $3.5m would need to be achieved not to incur a deficit. Apart from the negative consequences from an organisational governance perspective, this would further deplete the DHB's working capital.
Board chairwoman Jenny Black said this morning the board was in regular contact with senior management about the situation.
"The board is concerned about the current financial trends. We support the attention that is being given to returning the organisation to its budgeted plan.
"We are five months into the year and have only four months of financial data, therefore, there is time to reverse the present trends before June 2013."
Mr Hope said there were some challenges ahead for the DHB.
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