How is your DHB performing?Save
By Nicholas Jones
District health boards are showing signs of financial pressure and some are neglecting spending on repairs and maintenance to try balance their books, a new stock-take by Treasury has found.
The country's 20 DHBs have been assessed and rated according to financial performance, planning, productivity and - for the first time - repairs and maintenance.
Some DHBs seem to be "sweating" their assets and under-funding repairs and maintenance to help balance their books, the report found. Treasury started looking at maintenance because cutting it back too much can reduce an asset's lifespan and increase costs in the medium to long-term.
Six DHBs were given an amber or red rating because of underspending: Canterbury, Lakes, Southern, Tairawhiti, Wairarapa and Waikato.
To measure DHBs' financial performance, Treasury looked at whether boards had a net surplus or deficit, and what proportion this was of total revenue.
Those with a red or amber rating for 2016 were Canterbury, Capital and Coast, Hutt, Lakes, South Canterbury, Southern, Tairawhiti, Taranaki, Wairarapa and West Coast.
Elective operations and other treatments have increased over time, the report found, but overall hospital productivity has been broadly stable.
Average length of hospital stays reduced at most DHBs. Treasury considered this a positive "as longer stays tend to reduce patient wellbeing and increase costs".
Health spending in nominal and real terms has continued to increase, Treasury found. A decline in health spending as a percentage of GDP since 2009/10 reflects both fiscal restraint and economic growth.
Labour's health spokesman David Clark said DHBs were facing a budget deficit of almost $90 million, well above what was forecast.
"The Government is facing the consequences of a $1.7 billion financial hole that has developed over the last six years," Clark said. "Canterbury and Capital and Coast are among the worst but the smaller DHBs like Northland and Wairarapa are also struggling."
Health Minister Dr Jonathan Coleman said the Government had focussed on improving access to services, and had delivered on that.
"There is always financial pressure in the health sector, that's nothing new. While I note Treasury's comments, this Government has reduced deficits and they are still lower than the $150 million deficits inherited from Labour.
"As for Mr Clark's argument, while Labour increased Health funding while they were in Government, the deficits also increased substantially. Budget 2017 will push Health funding to record levels."
How is your DHB performing?
• Auckland (Green): Consistent financial performance, albeit assisted by additional revenue in 2015.
• Bay of Plenty (Green): Small unplanned deficits in 2015 and 2016, but consistent financial performance overall. Good hospital productivity track record.
• Canterbury (Red): Its weak balance sheet with large deficit forecast for 2017 indicates that improved financial management is required for it to manage within budget. Remains significantly affected by recent earthquakes. May be having trouble funding asset maintenance and repairs.
• Capital and Coast (Red): Relatively high unplanned deficit in 2016 and weak balance sheet. Further deficit planned for 2017. High variances in spending against its repairs and maintenance budget may indicate planning issues.
• Counties Manukau (Green): Consistent financial performance. Good hospital productivity track record. Relatively low level of GPs per capita.
• Hawkes Bay (Green): Consistent financial performance.
• Hutt (Amber): Significantly higher than planned capital expenditure in 2016. Remains in deficit for 2016 with a smaller deficit planned for 2017.
• Lakes (Amber): Deficits in 2015 and 2016 and a track record of adverse net results to plan raise questions about its financial management and the planned return to surplus in 2017. Financing and depreciation expenses are significant. May be having trouble funding asset maintenance and repairs. Good hospital inpatient productivity track record.
• MidCentral (Green): Small deficits in 2015 and 2016 but otherwise consistent financial performance and a robust.
• Nelson Marlborough (Green): In deficit for a couple of years (2012 and 2013), but has run surpluses since then. The balance sheet looks healthy.
• Northland (Green): Consistent financial performance.
• South Canterbury (Amber): Unplanned net deficit in 2016 with a plan to return to surplus in 2017. May be having trouble funding asset maintenance and repairs. Hospital inpatient productivity may be lower relative to other DHBs.
• Southern (Red): Has run increasingly large deficits since 2012, with the planned deficit at 2 per cent of total revenue in 2017. Weak balance sheet. May be having trouble funding asset maintenance and repairs.
• Tairawhiti (Red): Has a weak balance sheet and reported a net deficit in 2013, 2015 and 2016. May be having trouble funding asset maintenance and repairs. Adverse net results to plan in 2015 and 2016 raise questions about its financial management and planned surplus for 2017. Hospital inpatient productivity may be lower relative to other DHBs.
• Taranaki (Red): Ran a deficit in the last three years and has limited liquid assets on its balance sheet. Hospital inpatient productivity may be lower relative to other DHBs.
• Waikato (Amber): Mostly steady financial performance, although it had a small deficit in 2015 and its balance sheet contains relatively few liquid assets. May be having trouble funding asset maintenance and repairs. Good hospital productivity track record.
• Wairarapa (Red): Has run material deficits for a number of years with another planned deficit in the current year. The balance sheet is weak. Has a high, but declining, allocation of resources to external providers. May be having trouble funding asset maintenance and repairs.
• Waitemata (Green): Consistent financial performance and a strong balance sheet.
• West Coast (Amber): Ongoing deficits despite significant, persistent "transitional" funding topping up its PBFF (population-based funding formula) share.
• Whanganui (Green): Population numbers are expected to decline over the next decade, posing some particular challenges. Small deficit in 2016 planned to increase slightly in 2017.
Source: Comments from Treasury report on 2016 performance and plans for this year. A green rating indicates no particular concerns, amber indicates some concerns, red that a DHB was among the worst performers or that Treasury has concerns about its performance.