Capacity constraints see Canterbury DHB spend $143m on private surgeries

The CDHB says the amount of outsourced procedures will come down once the new acute services building opens next year.
DMITRY KALINOVSKY/123RF.COM

The CDHB says the amount of outsourced procedures will come down once the new acute services building opens next year.

Thousands of hip, knee and other elective procedures have been outsourced to private providers in Canterbury over the past five years at a cost of about $143 million.

Canterbury District Health Board (CDHB) members say increased outsourcing has been necessary to meet demand, especially given post-earthquake capacity constraints.

"There's no point having a philosophical objection to using the private sector, because if we weren't able to access it thousands of people would have missed out on publicly-funded elective surgery," Andy Dickerson said.

The number of outsourced procedures increased 45 per cent from 2112 in 2013/14 to 3064 in the 2017/18 financial year, figures released under the Official Information Act show. Spending on these procedures increased 39 per cent from $24.8m to $34.5m over the same period. 

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Over the past five years, the total number of outsourced procedures was 13,167, at a cost of $143m. Expenditure included first specialist assessments and follow-ups, among other costs.

CDHB planning, funding and decision support executive director Carolyn Gullery said: "Our surgical volumes have increased substantially over the last five years and we are now operating at a deficit of close to eight surgical theatres."

Outsourcing surgeries had been necessary to meet demand, however Gullery said the spend and amount of outsourcing would come down once the new acute services building and its 12 theatres was ready in late 2019.

The CDHB originally planned to move into the building this month. According to the Ministry of Health website, the new facilities would enable the health board to perform an extra 6000 surgeries a year.

Increased outsourcing has been pointed to as one factor behind the CDHB's 2017/18 deficit. Provisional figures released in August showed a deficit of $63.9m, $10m more than forecast.

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CDHB member Aaron Keown said the health board had been closely monitoring the volume and cost of outsourcing. The CDHB could be penalised for not meeting Ministry elective surgery targets, he said, and people needed to realise bringing operations back in-house did not necessarily result in large savings.

"Where it gets done is kind of irrelevant as long as it gets done. We don't suddenly save $34m bringing those operations back in-house, because by bringing them back in-house your operating costs go up."

The CDHB spent the most on outsourcing procedures to private providers including Canterbury Orthopaedic Services, which trades as Leinster Orthopaedic Centre, Southern Cross Hospitals and St George's Hospital.

NZ Private Surgical Hospitals Association president Richard Whitney said the private sector was already the dominant provider of elective surgeries in New Zealand,.

It could perform many procedures "for the same price that the public sector would be credited with" and would play an increasingly important role as demand for surgeries increased, driven by an ageing and growing population.

Whitney called for greater coordination between the public and private sectors.

Long-term discussions between the parties about demand and capacity would help private providers better direct investment in new facilities and training, he said.

 - Stuff

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