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Canterbury District Health Board gets $180 million cash injection from government

Oct 02, 2020

Clinicians and doctors at the Canterbury District Health Board are stunned by the government's deficit-matching cash injection but say it leaves many problems unresolved.

Health Minister Chris Hipkins yesterday met with management and clinical leaders to discuss their dire financial situation, at the same time announcing a $180 million equity injection.

That is the same amount the DHB is in deficit for, but there is confusion over what the money will be used for.

Documents released by Treasury show the deficit is due to underfunding over the last 10 years and poor management.

Something Dr David Smyth, who is the chief of medicine at Christchurch Hospital, disagrees with.

"We didn't deliberately get ourselves into this situation, I'm convinced that it's all to do with the effects of the earthquake and the Hagley building has come in two years late."

Dr Smyth said everyone at the DHB is sick of being stressed and wants to move forward.

"The meeting with the minister was a bit underwhelming if I'm honest, he came in and said he was here to listen.

"We want solutions we want action, we want on-going engagement," he said.

"We need the knee off our neck, we need some breathing space and need to know that people are working with us in order to progress."

Dr Smyth said they were all blindsided by the minister's announcement of $180m.

"I don't really understand what he means by an equity injection, is it a gift or a loan?"

RNZ understands the money is not a loan - but a cash injection to help the DHB pay staff.

Conditions on how the money is to be spent are outlined in a letter from the minister to the DHB - a letter RNZ has not seen.

Hipkins said the DHB is in an unsustainable position and needs to get back on a stable financial footing.

"Ultimately you do need to have some level of financial discipline, if every DHB in the country said we'll just spend what we think we need to spend in order to operate, we won't worry about a budget the whole health system would be in difficulty."

Hipkins said it will be hard but the Canterbury District Health Board can make cuts.

"The advice that I've had is that the DHB can get back in the black without making service cuts as other DHB's around the country are doing, the government is overall significantly increasing the spending on DHBs.

"Canterbury seem to be increasing their spending faster than the government investment is increasing by - that is not sustainable."

Elected board members spoken to by RNZ were not aware the minister was in Christchurch yesterday and were not invited to the meeting.

Board member Aaron Keown said it is clear where the government stands which means the board can get on with things.

He said it is time for a new era.

"I'm not here to point the finger, I just want to find solutions to move forward.

"I understand the ministry's position and I understand the board's position now we need to try find some middle ground and get on with things instead of looking backwards," Keown said.

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