Budget reveals continuing battle over health board deficits

10.00am

Treasury has warned that District Health Boards (DHBs) are planning to continue blowing their budgets.

Yesterday's budget showed DHBs' deficits at $210 million this year and they are forecast to drop to $80 million next year. However, in the fineprint Treasury warned that DHBs are planning to blow their budgets at their current rate.

Treasury said in its list of financial risks that December's announcement of a $3.2 billion spend-up on health during the next three years should lead to balanced DHB budgets by 2005/2006. But those actually running health services see it differently.

"The DHBs have submitted draft annual plans to the Ministry of Health that have combined deficits of around $200 million in each year from 2002/2003," Treasury said.

"The Government has rejected these deficit forecasts as being unacceptable and is actively discussing actions and cost-containment measures with the DHBs to manage back the deficits."

The budget also revealed funding data the Health Ministry had refused to divulge -- how much money is going to individual DHBs to spend on health care next financial year. The current year's funding is in brackets:

* Northland $184.5m ($170m)

* Waitemata $405.9m ($369.7m)

* Auckland $844.2m ($785.5m)

* Counties-Manukau $460.3m ($426.8m)

* Waikato $539.1m ($502.2m)

* Lakes $120.8m ($109.5m)

* Bay of Plenty $235.4m ($217m)

* Tairawhiti $58.7m ($54.4m)

* Taranaki $124m ($115.4)

* Hawke's Bay $183.5m ($172.1m)

* Whanganui $95m ($88.7m)

* MidCentral $206.5m ($192.3m)

* Hutt $162.8m ($152.7m).

* Capital and Coast $408m ($379.8m)

* Wairarapa $46.1m ($41.9m)

* Nelson/Marlborough $145.5m ($133m)

* West Coast $48.9m ($44.5m)

* Canterbury $660.3m ($619.5m)

* South Canterbury $63.8m ($59.1m)

* Otago $308.7m ($281.5m)

* Southland $108.3m ($100.6m)

Health minister Annette King said: "While the Government recognises that some difficult decisions will need to be made, our expectation is that the elected boards will make the necessary decisions based on available funding and the needs of local communities."

But the budget showed the size of the task ahead of the DHBs, with Treasury detailing DHB debt repayments and capital spending. It planned spending $200m on refinancing DHB debt run up prior to 2001, $53m in refinancing DHB debt incurred since then and lending another $84 m to them in the coming year.

Wellington Hospital came in for special mention with plans to effectively write-off $30m there.

In the current financial year Treasury estimated the Government would spend $152m refinancing old debt and $19m on new debt for DHBs.

Ms King announced the following broad outline of the increased funding last December:

* $400m extra funding for health in the 2002-03 year, $800m the following year and $1.2 billion the year after that -- the equivalent of $400m of new funding each year;

* $10m to meet extra demand for health services from population growth in 2002-03, $197m the following year and $295m the year after that -- the equivalent of $96m and $98m of new funding in 2003-04 and 2004-05 respectively.

The $3.2b package also included $400m for primary health care, $8m of which would be spent increasing the subsidy to general practitioners for free visits for under-sixes.

Mr King said $2b would be spent during the next four years on capital investment in the health system, including $620m in new money in 2002-03.

The injection supported hospital works programmes including Auckland's Grafton, Green Lane and National Women's hospitals, Middlemore, Waitakere, North Shore, Palmerston North, Hawera, Hutt and Nelson. New facilities were planned for Wellington, Invercargill and Christchurch Women's hospitals.

Treasury figures showed only $149m for "capital contributions to DHBs to cover new investments and reconfiguration of their balance sheets" and $20m for capital investment in "specific health sector assets" in the coming financial year.

- NZPA

Full Herald coverage:
nzherald.co.nz/budget

Budget links - including Treasury documents:
nzherald.co.nz/budgetlinks