Underfunding of health system leads to $240m blowout Health Minister

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26 September 2018 Natalie Akoorie - NZ Herald

District health boards are $240 million in the red and current budget deficit forecasts have not been made public yet, despite being almost three months into the financial year.

The combined deficit of the country’s 20 DHBs is more than 100 per cent higher than was predicted this time last year, according to data compiled by the Ministry of Health.

The year-end sector result is a $240m deficit while at the same period last year the sector was reporting a $119m deficit,” a DHB financial report to Minister of Health Dr David Clark said.

Clark met DHB leaders in Wellington last week to discuss their annual plans, which will forecast expected deficit levels for this year.

Clark told the Herald the growth of DHB deficits was a direct result of years of underfunding.

“The previous Government chose to prioritise tax cuts over the public health service, and we are living with the consequences of that,” he said.

He said, in its first Budget, the Government pumped the largest increase in health spending in a decade – an extra $2.2 billion dollars – into DHBs over the next four years.

“We also set aside a further $100 million for the coming year for additional deficit support. At the time we acknowledged that even that was not enough to make up for nine years of underfunding.”

Clark said he had been advised to expect the majority of DHBs to continue to be in deficit over the next year.

“I expect DHBs that are in deficit to map out a credible path to sustainability as we increase funding over time.

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