Waikato DHB is forecasting a budget deficit of $21.8m, this is $11.8m unfavourable against its budget for the full financial year.
This is due to increased cost pressure to provide services for growth in population, a rise in staff costs and consumable costs and an increase in acute hospital presentations, coupled with a challenging savings plan.
Derek Wright, Interim Chief Executive, said: “At the start of this financial year we forecast to break even, which was then adjusted to a $10m deficit budget due to depreciation on revaluations of our buildings, but we are now half way through the year and we are very unlikely to meet this.”
He said the DHB had factored in $39m worth of savings into a break even budget, but while the DHB had already achieved savings of $13.3m, the remaining $26.7m was going to be a struggle to fully achieve because of the complex nature of the savings initiatives and the lead time needed to deliver the benefits.
These include a theatre performance and productivity initiative, a patient flow programme, an acute demand management project and a wide range of smaller initiatives across the organisation.
The DHB is currently sitting at $1.7m unfavourable to budget.
Mr Wright said: “We are confident that we are doing the right things that will have big financial benefits, but it is just taking longer than we had hoped. We knew it was always going to be extremely challenging, and it has proved to be so. It’s particularly challenging as the Board has made it clear that the pursuit of savings should not be allowed to impact access to our services or the quality of service we offer. Our latest forecast is a deficit of $21.8m on our overall budget of $1.4bn and we have informed the Ministry of this.”