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Massive increase in DHB funding likely

Massive increase in DHB funding likely

Following a meeting with the Minister of Health earlier this week, Hawke’s Bay District Health Board chair, Kevin Atkinson, said things were looking promising for Hawke’s Bay to receive its fair share of health funding in the 2004/2005 year.

Mr Atkinson said “the Minister has advised that she will support a $20.6 million increase in funding for the Hawke’s Bay DHB for the 2004/5 year commencing on 1 July 2004 and that the Board can use this figure for the 2004/5 District Annual Plan process. The increased funding will need formal Cabinet endorsement and progress through the usual Budget process.”

“The timing is perfect as we are in the process of finalising our District Annual Plan for 2004/2005, and with a clear indication on the level of funding we will receive, we can commit to longer-term plans, which will improve the health and well being of Hawke’s Bay people,” Mr Atkinson said.

“Over the past twelve months we have put a very strong case to the Minister and Ministry staff and the Minister’s support will mean that we would be receiving most, if not all, of our entitlements under the population-based funding formula (PBFF) in the 2004/2005 year.

“At this time last year, HBDHB was advised that under the new Population Based Funding Formula (PBFF) we were entitled to receive an additional $17.6 million, however we only received an extra $2.8m, rising to a total of $3.9m once extra payments were included.

“The reason for the shortfall was the fact government couldn’t instantly take funding away from those DHBs who were receiving more than their fair share to give to underfunded DHBs. The transition was scheduled to take place over a number of years,” he said. “I believe the Minister deserves considerable credit for agreeing to accelerate the move to funding equity for under-funded Boards like Hawke’s Bay,”

Mr Atkinson said Hawke’s Bay DHB was committed to reducing last year’s deficit of $6.7m to breakeven for year ending 30 June 2004. “This is even more important now given that any new money in the 2004/2005 year will be subject to our breaking even financially this year. However the efficiencies required to achieve this result are unlikely to be sustainable, therefore the new money will be earmarked to put the District Health Board into a sustainable financial position from 1 July 2004 and hopefully lead to additional services that support the Government’s health priorities”. We have received clear indication from the Minister that she expects to see the additional funding committed to services, not salary and wage increases.
“I want to acknowledge the work of Board members, our local MPs Rick Barker and Russell Fairbrother and our new CEO Chris Clarke and his Management team who have consistently championed the health needs of Hawke’s Bay in Wellington,” he said.


What is the population-based funding formula?

It is a method of allocating funds to District Health Boards. The formula is takes into account population size and demographic factors, such as age, ethnicity and levels of deprivation in a community. These factors help determine the anticipated level of health and disability services which will be needed by the people living in a defined area, and funding is allocated to DHBs on that basis.

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