Hospitals must fight for cash

Press, 4 March 1982, Page 1

Hospitals must fight for cash

Parliamentary reporter T|je North Canterbury Hospital Board is one of seven that will have to cut its spending next year. Others include the Nelson, Marlborough, and West Coast boards. . . The Minister of Health (Mr Malcolm) said yesterday that it was not clear yet in money terms what the cuts would be, but several millions of dollars would be saved. The North Canterbury board will have its funding reduced by 0.7 per cent, and Nelson, Marlborough, and the West Coast boards by 1 per cent each. The 22 other boards will receive no automatic larger slice from the redistributed cake. They Will have to square their requests with the Health Department’s hospitals development plan. Mr Malcolm said that the

.cuts were essentially a holding measure. The total basic' grant for 1982-83 would be held at the same level in real terms as this year, with allowance made for inflation, and commissioning grants written in. Although those boards having to make cuts of up to one per cent would be faced with some “very painful decisions,” he was certain the cuts would not damage patient services, and need not necessarily affect matters such as surgery. The cuts meant that growth had stopped. Any new services would have to be funded by abandoning existing services or boards rear-

ranging their priorities, he said. Asked to comment on complaints by some hospital board spokesmen that the cuts would lengthen waiting lists, Mr Malcolm said waiting lists were not a reliable guide to urgent demand for services. Many people were happy .to remain on waiting lists, because they were in no hurry for treatment, but preferred to be “booked in.” Boards had had blanket 1 per cent cuts for the last three years in a bid to restrain the continual growth of the hospital boards’ budget, now running at S3M a day. These restraints had still <’

permitted growth. Now there would be no growth. Mr Malcolm said that the Cabinet might well consider that money saved in the exercise would count towards the 3 per cent cut required of all Government departments in the coming year. - He gave an assurance that any pruning in the 3 per cent exercise would’ not reduce the level of basic funding to hospitals. The cuts were the first move towards allocating the hospital vote on a population basis. Yet to be added to the formula were allowances for training hospitals, specialties, and long-stay patients.

Mr Malcolm acknowledged that the cuts were coming at a time when demand for hospital services was increasing because of the rising proportion of elderly people in the population. ■ "The decision to hold spending at the same base level in real dollar terms therefore, places added pressure on boards to provide increased services through tighter administration,” he said. The exact amount of the adjustments in dollar terms could not be arrived at until returns were in from all boards at the end of the financial year. Boards would be able to make reasonable

estimates forXthe 1982-83 budgets, he said. " The Government grant -to hospitals applies to wages, salaries, purchase of medical equipment, and the normal running costs of a hospital board. It does not cover capital costs. The chairman of the North Canterbury Hospital Board, Mr T. C. Grigg, said that service would have to be reduced. The cut would mean that after adjustments for inflation the board would effectively have $1 million less to spend next financial year. The board had lost $3. million in spending power during the last four years.