Hospitals Report Smaller Deficit

Public Health Financial Statistics: September 2000 quarter

Hospitals Report Smaller Deficit

Hospital and Health Service (HHS) providers recorded an annual deficit of $1.5 million for the September 2000 year, Statistics New Zealand reported today. This is below the deficit of $2.8 million for the previous September year. The quarterly result for September shows a $6.4 million operating surplus, a decrease of $0.5 million on the $6.9 million surplus reported in the September 1999 quarter.

Operating income for the September 2000 year was $3,477.5 million, up $170.4 million or 5.2 per cent from the September 1999 year. Over the same period the cost of providing services increased by $169.2 million, or 5.1 per cent, to reach $3,479.0 million.

In this latest year revenue from Government was $3,222.6 million, compared to $3,039.4 million in the September 1999 year. The proportion of income from this source rose to 92.7 per cent of total revenue, compared to 91.9 per cent a year earlier. Increased funding to address policy priorities contributed to the rise in government revenue.

Taxpayers' equity was $929.8 million, $24.6 million higher than at the end of September 1999. Debt increased at a faster rate, rising by $184.9 million over the same period to reach $1,568.3 million at the end of September 2000. This produced a higher debt equity ratio than a year ago. The ratio moved from 1.53 in the September 1999 quarter to 1.69 in the September 2000 quarter. The increase in debt was due to higher capital expenditure and the introduction of a capital charge on taxpayers' equity on 1 July 1998. This charge led HHS providers to seek cheaper sources of finance and resulted in debt (bank loans) increasing, as lending rates are now lower than the rate charged on taxpayers' equity.

At the end of September 2000 total assets for HHS providers were valued at $2,498.0 million, an increase of $209.5 million or 9.2 per cent on the value at the end of September 1999.

The book value of fixed assets increased over the year to reach $1,869.6 million. During the year, HHS providers acquired $338.6 million of fixed assets and sold $28.9 million. Purchases of fixed assets in the year to September 1999 were $236.8 million. The debt to fixed asset ratio of 0.84 recorded at the end of September 2000 was slightly up on the 0.79 recorded a year earlier, reflecting increased capital expenditure over the period.

Ian Ewing DEPUTY GOVERNMENT STATISTICIAN

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