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Mre Gov. Funding Lowers Public Hospital Deficits

Public Health Financial Statistics: June 2000 quarter

Lower Public Hospital Deficits Due To Increased Government Funding

Hospital and Health Service (HHS) providers recorded the smallest Annual operating deficit since Crown Health Enterprises began in 1993, According to Statistics New Zealand.

"Provisional results show a small operating deficit of $1.1 million for the 30 June 2000 year", says Deputy Government Statistician Ian Ewing. "Last year in June 1999 the deficit recorded was $19.4 million."

Result for the June 2000 quarter Despite the small annual deficit, the Hospital and Health Service providers recorded a $10.3 million operating deficit in the June 2000 quarter. This figure is down $13.5 million on the $3.1 million surplus in the previous June quarter, and is the result of a rise in expenditure greater than the rise in income.

In the June 2000 quarter, operating income was $888.8 million, up $29.4 million from the same quarter a year before. The cost of providing services increased by $42.9 million, or 5.0 per cent, to reach $899.2 million.

"Operating income has increased primarily because of a $44.6 million increase in government funding," Ian Ewing says. "In the June 2000 quarter Government funding met 92.5 per cent of HHS operating revenue."

Operating position for the 12 months to June 2000 In the year to June 2000 government revenue was $3,197.4 million, $204.8 million or 6.8 per cent higher than in the year to June 1999. The cost of providing services has increased at a slower rate. In the twelve months to June 2000 the cost of providing services was $3,428.7 million; $146.7 million or 4.5 per cent higher than in the 12 months to June 1999.

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Increased government funding went to maintain and improve health services, reduce the elective services backlog, provide additional resources for new "Family Start" initiatives and furnish more funds for new child and youth mental health services.

Increasing debt and declining equity levels Total debt owed by the HHS providers continues to rise, up $80.9 million between June 1999 and June 2000. At the same time, taxpayers' equity rose by $19.5 million to reach $921.6 million. As a result, the debt-to-equity ratio has risen from 1.53 in June 1999 to 1.58 in June 2000.

Total debt at the end of June 2000 consisted of current liabilities ($729.3 million), long-term loans ($672.3 million) and other term liabilities ($58.0 million). All classes of debt showed increases, with long-term loans up $61.9 million, current liabilities up $10.4 million, and other term liabilities up $8.6 million.

Capital expenditure The book value of fixed assets reached $1,829.6 million at the end of June 2000, up from $1,735.0 million a year earlier. The debt-to-fixed asset ratio was 0.80 in the June 2000 quarter, up on the 0.78 in the June 1999 quarter. During the June 2000 year $311.8 million in fixed assets were acquired by HHS providers, while $40.0 million were disposed of.

Ian Ewing Deputy Government Statistician End

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