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CDHB Breaks Even On Budget For Year

6 August 2004

CDHB Breaks Even On Budget For Year

The Canterbury District Health Board has successfully ended the financial year, to 30 June, with a break-even situation excluding the impact of the new Holidays Act.

‘This is an excellent result,’ the acting Chair of the CDHB Board Dr Olive Webb told the Board meeting this morning. ‘The Board congratulates the Chief Executive Jean O’Callaghan and her staff for accepting the huge financial challenge of reducing the deficit from $21million three years ago. The task was never going to be easy. The fact that it has been achieved without a reduction in services is also a tremendous achievement.’

Chief Executive Jean O’Callaghan said ‘one of the key benefits of this result if that we will not need to rely on additional borrowing to meet our operational requirements. Another major benefit is that we will retain our early payment status which is worth $2.5million savings in interest costs.’

Mrs O’Callaghan said that while the budget result was very satisfying, the DHB could not afford to let up on its stringent approach to financial management particularly in the area of hospital & specialist services where the end of year result had been extremely disappointing. Christchurch hospital’s significant overspend could not be sustained or continued, she said, as the Board was fortunate to have a number of one-off savings in other areas that helped offset the overspending last year. These one-off savings would not be available in future years and energies would need to continue to be put into improving the way in which hospital services were provided.

‘Containing costs will continue to be an important driver for the new financial year, with the impact of population based funding starting to hit home,’ she said. ‘Better forward planning together with continued positive financial performance will be key factors for the DHB. We cannot afford to rest on our laurels.’

Mrs O’Callaghan said the year had ended on a positive note in several areas, not only financial performance. More details would be provided in the Health Board’s Annual Report.

Significant tangible successes achieved throughout the CDHB that have contributed to the end of year financial result include:

Savings of $1.5m in synthetic blood products through free trial products and contract retendering

Improved clinical management and ordering of diagnostic tests resulting in usage reduction of $1m

Gain on sale of $1m from disposal of surplus assets

Savings of $1.5m in supplies/services through robust contract and negotiation processes

Reduction in finance charges, ie interest and capital charge of $4m

Savings of $1m associated with the transfer of community laboratory contract back to other DHBs

Additional external revenue $1m generated

Improved recovery of older debts from ACC

Subsidiaries achieving slight surpluses at end of year

Community & Public Health Division, Planning & Funding Division, Corporate Division and a number of hospital divisions managing within or close to their budgets.


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