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DHBs report better than planned financial results

District Health Boards report better than planned financial results

Most of the country's 21 district health boards (DHBs) have reported better than planned financial results for the third quarter and the year ended 30 June, the Ministry of Health said today.

The consolidated results for DHBs show total net deficits of about $185 million for the year, an improvement on plan of about $8 million. Thirteen of the 21 DHBs showed improved performances to plan, and three also showed surpluses for the year.

Some variability was shown when the three arms, Hospital, Governance, and Funding were measured separately, with favourable variances to plan for the funder arms of $24.6 million, for the Governance arms of $6.9 million but offset by an unfavourable variance of $22.8 million in the Hospital arms.

Ministry spokesman John Hazeldine said that absolute precision in achieving planned results was difficult enough at the DHB level but even more so for each of the arms. For the DHBs collectively to be $8 million better than target for the year was a commendable effort.

Three of the DHBs' hospital arms performed particularly well -- Auckland, Bay of Plenty, and Lakes each showed significantly improved results and were collectively $4 million ahead of target for this year.

Lakes DHB had the best results, improving its hospital arm performance by $2.8 million for the year.

``These latest figures are encouraging signs for the health sector,'' Mr Hazeldine said.

``We want DHBs to be deficit free and we're working with boards to achieve this. Ultimately this is the responsibility of DHBs, and it's pleasing to see their hard work coming up with such positive results.''

Two DHBs -- Capital & Coast and South Canterbury -- had the only deficit free hospital arms for the year to date. Both achieved very close to the planned result.

``When we look at the combined DHB deficit of $189 million for 2002/03, it's obvious that there is still a lot more work to be done,'' Mr Hazeldine said.

``However, I'm confident that the work DHBs are doing is taking us in the right direction, and the results indicated that their ability achieve plan has been demonstrated.''

Mr Hazeldine said, while the results overall for district health boards is positive, the sector operates at close to breakeven and relatively small changes in circumstances, such as an unexpected increase in acute presentations to hospital, or seasonal variations can have a significant impact.

NOTE: These are the results as provided by DHBs and they are still to be audited. That is expected to be completed by the end of October.

Background "Hospital arm" refers to the business of providing the DHB's hospital and community health services.

“Funder Arm” refers to the business of allocating the DHB's funding to the various health services delivered to its population

“Governance Arm” refers to the business of managing the DHB's funding arm and supporting its centralized governance.

"Consolidated" DHB operations covers the hospital arm, governance of the DHB board and the funding of health activities not provided directly by the DHB's hospital and community health services (eg DHB funding of GP services).

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