Hospital cost-cuts aid financing

Press, 18 March 1982, Page 1

Hospital cost-cuts aid financing

Cost-cutting measures have slashed the North Canterbury Hospital Board’s overspending by $390,000 during January. The board’s director of finance, Mr D. B. Herman, told the finance committee of the board yesterday that overspending had been reduced from $487,474 to $96,448 during the month.

The chairman of the committee, Mr D. H. Lawrence, said that the report was a “happier picture” than those of previous months, but general cuts would affect services provided by the board. The board's chief executive, Mr' R. I. Parker, said that the present amount of overspending represented 0.001 per cent of the board's budget and v “any business finishing thaLclose to budget would be happy.” The capa-

city to reduce spending further without affectng services had been “exhausted.” Mr C. F. Witty was concerned about the high cost of heating faced by the board because of increasing gas costs. He accused the Health Department'of “procrastinating” over a decision on whether the board should be given a grant to cover an extra $500,000 in gas charges. "It is no fault of ours that our heating .bills are so high,” he said. Mr Parker said that to achieve part of the reduction in overspending, $500,000 of capital expenditure had had to be frozen. “If we had received an adequate stabilisation grant for heating we would not have had to freeze capital expenditure,” he said. Rrofessor D. W. Heaven

said that if the board had to reduce services it could either make across-the-board cuts or totally reduce the activity of some services. It would be difficult to make a decision because there was not enough information available on the effects of cuts.

Professor Beaven proposed that a team of the board’s medical and administrative staff collect the necessary information and make comments on an imbalance in workload-staff ratios.

Other committee members thought that Professor Beaven’s proposals would take too much time to implement but that they should be considered by the budgeting and staffing committee. Committee members were also concerned that the 0.7 per cent cut in base funding announced by the Minister of Health (Mr Malcolm) could oe increased by other measures later in the year. In his announcement, Mr Malcolm said that "other decisions may be taken under the Government's wider exercise to reduce net expenditure 3 per cent, which will have some effect on the financial affairs of the board."

The chairman of the board, Mr T. C. Grigg, said that it would have been in a “crisis” if it had to face a full 3 per cent cut.