$60m budget blowout among District Health Boards

Health Minister Jonathan Coleman says no services will be cut despite a $60m DHB budget blowout. Photo/File

New Zealand's district health boards racked up a $117 million deficit last year - almost $60m more than was budgeted for - but the Health Minister says there will be no services cut.

Only eight of the country's 20 health boards ended the 2016/17 year in the positive and only five came in under-budget.

Counties Manukau DHB came in the most over-budget, $17.4m, while the largest deficit was held by Canterbury DHB at $51.8m.

Seven health boards reported their overspend was due to higher than expected demand for acute services or more outsourcing of elective surgeries to meet Ministry of Health targets.

Counties Manukau explained that its unfavourable financial results were mainly due to writing off its technology transformation project at a cost of $5.5m, the cancellation of the Asia-Pacific healthcare conference at a cost of $1m, additional personal costs of $3m, a $1.2m write down of an electronic invoicing system and costs to comply with the holidays act.

Association of Salaried Medical Specialists executive director Ian Powell said the deficits were a reflection of how underfunded the health system was.

He said the expectations on district health boards were increasing much faster than funding.

"It's a pretty untenable situation."

While deficits were wiped by the Ministry of Health at the end of each year, pressure was put on health board leaders to find ways to cut costs and keep within the budget, Powell said.

"That [cutting costs] is the pressure that's on them but it's very difficult to do that without reducing services in some ways."

Powell said better leadership could also help cut costs. He believed more if more specialists were employed, they would have the time to invest in improving hospital systems.

He said without major changes the deficits were only going to get larger in coming years as the health system struggled to meet demand.

Health Minister Jonathan Coleman said despite the deficit no services would be cut.

Keeping deficits under control was an important part of sustaining growth in DHB services, he said, although in every year since health boards were created in 2001/02, at least seven health boards were in the red.

"In 2008/09 National inherited a combined DHB deficit of $155m, with 16 of the 20 DHBs in deficit at around 1.6 per cent of total DHBs funding for the year."

He said this year's $117m deficit was a fraction of the $13 billion district health board budget.

"Services will not be cut - there's plenty of cash in the bank."

Ministry of Health systems outcomes group manager Sam Kunowski said the results were expected to be unfavourable this year and the ministry had agreed to a $58.7m deficit however it turned out to be significantly larger.