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Hospitals' Operating Deficit Increases

Public Health Financial Statistics: June 2001 quarter

Hospitals' Operating Deficit Increases

Provisional results for the June 2001 year show the District Health Boards' (DHBs) operating deficit was $63.8 million, according to latest figures released by Statistics New Zealand. The $58.1 million increase from the $5.7 million operating deficit recorded in the June 2000 year was the result of total costs increasing at a faster rate than the increase in income. The main contributors to this rise were salaries and wages and rising supply costs. After non-operating items have been taken into account, the deficit was $61.9 million in the latest June year.

The operating deficit recorded in the June 2001 quarter was $22.2 million compared with a deficit of $14.4 million the previous quarter. In the latest quarter, total income was $952.5 million. While this is the same value as recorded in the previous quarter, total income is up $44.0 million or 4.8 per cent compared with the June 2000 quarter. The costs of providing services in the latest quarter at $977.9 million, were 1.2 per cent up on the previous quarter and 6.8 per cent higher than the June quarter a year earlier.

Total income for the June 2001 year was $3,744.8 million, up $206.0 million from the June 2000 year, mainly as a result of boosts to funding by Government. Government revenue increased $128.8 million or 3.9 per cent, while medical charges and all other income rose $76.6 million, with interest revenue increasing $0.6 million.

The cost of providing services by the DHBs rose by $264.1 million, or 7.5 per cent in the June 2001 year, to reach $3,808.6 million. The increase was mainly the result of increases in employee costs, up $168.5 million, and direct medical supplies and all other expenses, up $80.3 million.

Taxpayers' equity fell to $900.2 million at the end of June 2001 as a result of the continuing deficits. This was $25.1 million lower than at the end of June 2000. Debt increased by $239.7 million to $1705.8 million at the end of June 2001, as DHBs borrowed to provide for increased capital expenditure over this period.

The book value of fixed assets increased over the June 2001 year to reach $2023.5 million. Additions to fixed assets in the latest year were $390.4 million. The debt to fixed asset ratio of 0.84 recorded in June 2001 is up on the ratio of 0.80 recorded in June 2000. Total assets were valued at $2,606.0 million at the end of June 2001, an increase of $214.6 million or 9.0 per cent on the value recorded at the end of June 2000.

Brian Pink Government Statistician END

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