HOSPITAL ESTIMATES

Manawatu Standard, Volume LI, Issue 117, 18 April 1931, Page 6

HOSPITAL ESTIMATES

DRASTIC ECONOMIES ADOPTED

SALARY CUTS PRODUCE £3.000

Aimed at reducing expenditure and increasing revenue in every possible direction, tlie maintenance and capital, estimates for the forthcoming year, which were adopted by the Palmerston North Hospital Board at a special meeting yesterday afternoon, have made it possible to balance the budget for the forthcoming year with a lower Government subsidy and reduced contributions from the local bodies in the district.

As one means of effecting a reduction in costs the board adopted pro- / posals to reduce the total amount paid jn salaries by over £3OOO. Members of the board also agreed to a cut in the amount allowed to them for travelling expenses. “In wibmitting the suggested estimates for the financial year 1931-32. I have to report that these estimates have been prepared giving paramount attention to the fact that it is essential this year to reduce expenditure and try to increase revenue in every direction possible,” stated the manag-ing-secretary, Mr A. J. Phillipps, in presenting the statement. “In accordance with the provisions of the Finance Act just passed, the subsidies payable to hospital boards this vear have been reduced by 10 per cent, by the Government, and the Minister of Finance has informed the Hospital Boards’ Association that it is expected that boards will take the nnecessary

steps to reduce expenditure to meet the financial situation which has necessitated the reduction of subsidies. The draft estimates as submitted provide for a reduction in levy and a reduction in subsidy. “Under instructions from the chairman I have prepared a suggested list of salary reductions which have the effect of reducing tlie total amount paid by the board in salaries by over £3OOO. To carry on satisfactorily with the estimates as prepared will call for stringent economy and for the very close co-operation of all the senior officers of the board. Nothing except absolutely essential replacements in equipment and repairs immediately necessary can be undertaken without further "financial provision. “As regards the estimates of revenue, to realise the estimate provided for patients’ fees will require very close attention being paid to this work this year. I am quite sure, however, that the whole of the board’s staff realise that the time is one for a special effort to assist the board to make ends meet with reduced income. MAINTENANCE RECEIPTS. “\ olnntary Contributions and Bequests.—Estimate last year, £3OU ; actual receipts, £2/3 Os Vu; proposed estimate, £a7OU. The estimate of £I?UU includes half the Haliord bequest. Mrs Halford, who died recently, left £3UUU to the board, and the executive committee has recommended that half this amount be placed towards our maintenance lunus and half towards our general capital funds this year. The remaining £2OO consists chiefly of receipts and donations, which we expect to recive towards district nursing. “Subsidy on Voluntary Contributions and Bequests.—Estimate last year, £300 ; actual receipts, £213 9s Id; proposed estimate, £2OO. Unless some alteration is made in the recently expressed policy of the department, we will be entitled to receive subsidy on voluntary contributions again to enable us to carry on the district nursing work and consequently I have allowed for this on the estimate. I would think that there is little prospect of securing any subsidy on ordinary voluntary contributions this year. Patients’ Payments.—Estimate last year, £12,000; actual receipts, £11,024 6s 2d; proposed estimate, £14,1)00. The actual reoeipte from patients’ fees tor the past five years have been as f0110w:—1926-27, £7256; 1927-28, £7805; 1928-29, £10,138; 1929-30, £11,643; 1930-31, £11,024. As members are aware, we have a considerable increase in expenditure, due to the admission of earthquake patients to meet, and at the same time we have an assurance that the patients from the earthquake area will be pajd for at the rate of 9s per day. At March 31 £1853 is owing to this Board in this connection. The Napier patients have, of course, temporarily displaced a certain number of patients from our own district.

“Our numbers, apart from, the earthquake, would have shown an increase on last year, and in estimating the number of patients in the general hospital at 200 for the coming year, I think I am placing the figure reasonably low. The main hospital (quite apart from the earthquake) lia6 been more fully occupied during the past year than at any time previously. Having regard to all these circumstances, despite the fact that times are bad and fees collection is difficult, I consider that we should realise the proposed estimate. At present our scale fees for the hospital are 12s per day and 6s per day for children under the age of 12 years. The fee for outpatient treatment at the massage department is 3s 6d and for general out-patients the fee is 2s 6d plus-2s if medicine is required. “I consider that, in conformity with what other boards are doing, this board should add to its present list of charges a definite list of charges for X-ray work. IMa ny boards charge operation fees, but there is no such fee charged at this hospital except that where an operation is performed the minimum fee, including maintenance, is £1 Is. The new X-ray plant is at present on -the way out from England, and is to be installed at an early date. The overhead exnenses of the X-ray department have been recently increased and will increase further with the new plant. If these fees are added to our general list of charges they will be added to all accounts, but this will not prejudice people who are not in a position to pay, as these accounts will be treated in exactly the same way as are our

general hospital accounts, each one being settled having regard to the patient’s circumstances. The fees collection for the past eight years on a per occupied bed basis (the present system ot collection was commenced in 1924) is as follows (the fees collected per occupied bed being .shown in parentheses):—Average number of occupied beds: 1923-24, 102 (£29); 1924-25, 124 (£44); 1925-26, 131 (£54); 1926-27, 127 (£53.7); 1927-28, 163 {£44.4); 1925-29, 188 (£51.2); 1929-30, 181 (£60.7); 1930-31, 201 (£50.3); 1931-32 (estimate) 210 (£66). In dealing with these figures it must be remembered that, as has previously been pointed out, in a period of rapidly increasing numbers the fees collection per occupied bed always drops even if the same proportion of the accounts under action is bein" collected. Notice, for example, the difference be, tween the years 1926-27 and 1927-28 when the numbers increased nearly 30 per cent., and again last year. The figures for the years 1928-29 and subsequent years include maternity home as well as general hospital patients. For the coming year the number of patients for the maternity home has been estimated at 10. Charitable aid recoveries.—Estimate last year, £1800; actual receipts, £1605 16s 7d; proposed estimate, £1450. This item consists of pensions and other payments for old people in the Awapuni Home. The present estimate lias been assessed having regard to the present monthly income from this source. Some time back a larger proportion of the inmates of the Home were pensioners than is at present the case. The Home, of course, remains practically lull all the time. ‘ ‘Bacteriological Laboratory.—Estimate last year, £6OO ; actual receipts, £535 17s 3d; proposed estimate, £SOO. The laboratory revenue has dropped during the year as it depends entirely on the amount of work the medical practitioners send in. We should collect £SOO this year.

“Awapuni Farm lteecipts.—Estimate last year, £300; actual receipts, £256 15s Id; proposed estimate, £250. These are receipts from the sales of farm produce, .chiefly from the sale of pigs. Despite the drop in the price of pork, we should receive £250 this year. “Miscellaneous Receipts.—Estimate last year, £75; actual receipts, £ll9 4s 2d - proposed estimate, £SOO. Included in this item this year is an amount of approximately £3OO, part of which is recoverable from the Parke Island Home Committee and part of which from the Hawke’s Bay Hospital Board. This includes the whole of the disbursements made on behalf of the Parke Island Home inmates, which have amounted to £l5O 3s Id at March 31 (and there are other commitments) and the disbursements on behalf of the Hawke’s Bay Hospital Board for the maintenance of dressing stations in the camps, amounting to £129 16s 4d. There are always minor miscellaneous receipts amounting to over £IOO each year. MAINTENANCE PAYMENTS. “Proposed Estimate, £2473 4s 6d. We are beginning this year with a deficit of £2473 4s 6d in our maintenance account. When it was known in March that we would end the year with an overdraft unless we received an advance against next year’s subsidy. The advance was duly applied for, and we received advice that it had been approved. The remittance, however, was carried out in such a way that the amount was not credited by the bank to us until April 1. Though we have actually an overdraft, we were entitled to draw against payments due from the Government, and consequently this overdraft is not illegal, as before the overdraft was incurred the board had been definitely advised that a remittance was in transit, and possibly were the Government showing a surplus on this year’s working, the £3OOO would have been credited to our account on March 31. From our maintenance payments it will be seen that this overdraft is due to three expenditure items: Charitable aid. which was overspent for the year by £IOSB, and hospital maintenance, which was overspent by £603 and the board’s contribution to the National Provident Fund was overspent by £393, and to the fact that patients’ fees were £IOOO short of the estimate.

“Maternity. Home Maintenance.-— Estimate last year, £34,500; actual payments, £35,103 15s 9d; proposed estimate, £32,500. For cash statement purposes it is not possible to separate expenditure in connection with the Hospital and the Maternity Home. AYe, however, prepare separate statements of income and expenditure in connection with these two institutions. For the year ended March 31, 1930, the following table gives a comparative statement of hospital costs of those hospitals nearly approximating Palmerston North in size:

“The cost per patient treated is for most classifications of expendi-

SURGERY AND DISPENSARY

ture the best all round index —£10.8 for 1930 and £1(5.8 for the preceding year.

“The total number of patients under treatment in the Hospital for the year just ended was 2899. During the year the Wilson Block was opened and, of course, this meant an increase in overhead expenditure to cope with the same numbers, as patients who were previously accommodated on verandahs have been accommodated in these new wards. PROVISIONS.

“Estimate last year, £6000; actual expenditure, £5856 11s Id; proposed estimate, £5500. The most satisfactory unit for comparisons between the cost of provisions of various institutions is the annual cost per head of patients and staff boarded. For the hospitals previously quoted these figures were as follow during the year ended March 31, 19.30: —Dunedin, £25.5; Napier, £24.9; Palmerston North, £22.1; New Plymouth, £25.8; Wanganui, £21.2; Gisborne £33.7. Despite the fact that we will be maintaining large numbers this year, the provision of £5500 should meet our requirements.

“Estimate last year, £3250; actual expenditure, £3606 9s sd; proposed estimate, £3OOO. The surgery and dispensary expenditure for the past three years has been as follows: —- 1928-29, £3912; 1929-30, £3213; 193031, £3606. During the past year we have continued to indent the larger portion ot our drug supplies. Orders have been placed in England, and I estimate that loss than 20 per cent, of our drug supplies will require to be bought in New Zealand this year. “The following table sets out the number of operations performed during the year ended March 31. 1930, in the hospitals mentioned, and consumption per 100 patient days of certain main lines which generally speaking are fairly comparable. Of course, there is the possible use of substitutes to be considered, but at the same time the figures are of interest:

“It is interesting to observe that the surgical operations at the Palmerston JNorth Hospital during the year quoted averaged over 100 per month. .DOMESTIC AND ESTABLISHMENT “Estimate last year, £9000; actual expenditure, £9BOB 2s od; estimate tins year, £9OOO. Hie main sub-head ot domestic and establishment expenditure is the cost of coal, power and light which tor -the past year amounted to £4,008 14s sd. During the past year there was a considerable increase made m tlie railway freight charges on coal. As regaids electric light and power, a result of the increasing cost early in the past year a full investigation was made, and all staff were asked to co-operate in a special endeavour to reduce the amount of electricity consumed. To reduce consumption, 1 examined every lighted position in the hospital at night and nxed the candle power fOr every electric lamp. The result has been that a considerable saving in electricity was effected. I anticipate that the expenditure on electric light and power this year will be £3OO less than last year.

“As regards coal, I have just completed arrangements for a series of tests to be carried out in the engine room, with a view to reducing the cost of coal, if, as 1 anticipate, these tests show that a larger proportion of a lower grade coal can be used, some reduction in coal cost will be effected. The new theatre block, which will open shortly, will add a further load to our steam service.

“During the last year we have had one painter engaged the whole time, and one part tune, and the exteriors of all our brick buildings, except the nurses’ home, are now in really good condition. As regards the wooden buildings, a year or more ago it was decided as a policy not to .spend money on anything but the bare essentials. However, in view of the present financial position and having regard to the recent earthquake, 1 consider that our wooden buildings are a more valuable asset than we have perhaps thought in the past. “The expenditure on ambulances is also charged to this item. For the past year the cost of the ambulance service, including wages, was £417 14s 3d. This is maintenance cash expenditure and does not include depreciation on motor vehicles, in accordance with the executive committee’s recent approval, steps will be taken to do some ■e-organising as regards the laundry staffing this year, consequent upon the retirement of the head laundress, Mrs McKenna. There will be a reduction in the wages cost. “AYe are gradually increasing in iron, our ornamental grounds at the hospital. This cannot be avoided wing to new buildings and the necessity for at least making some improvements around these buildings. During the past year we have done some reconstruction work and put in some new roadways. I consider that next summer the main drive should receive a sealing coat and this will have to he treated as maintenance expenditure.

SUMMARY OF MAINTENANCE. “Under the various sub-heads in this item, maternity home expenditure has been included. In connection with the maternity home there is one very definite economy which can be made. I would suggest that, for all maternity nurse trainees entering the maternity home after June 30 next, the salary while training be at the rate of £SO per annum. This will effect a saving of approximately £lO2 this year. I find that though our maternity home has only been established a short period, more patients are being treated there at the present time than in any other maternity home maintained by a Hospital Board. “Old People’s Home. —Estimate last year, £2450; actual expenditure, £2339 Is; proposed estimate, £2050. The saving to be effected in this item will he mainly a reduction in salaries, which is proposed to reduce all round

in exactly the same way as tlie hospital staff have been reduced. DISTRICT NURSING. “Estimate last year, £420; actual payments, £462 19s 7d; proposed estimate, £3BO. There are two district nurses employed, one at Feilding and one at Palmerston North. In this item again there is a saving by reduction in salaries amounting to £3O. Both district nurses have done excellent work during the past year. ADMINISTRATION. “Estimate last year, £2650; nctual payments. £2496 8s; proposed estimate, £2200. The main reduction in this item is duo to the suggested cut in salaries. A general cut of 10 per cent is recommended with the exception of two cases, in which hardship would be involved. The office staff have been set a difficult task this year to endeavour to realise £14,000 for patients’ fees. I have discussed the position with the whole of the staff and the staff have offered for this year to work an eight hour day instead of the usual seven hours. In my opinion we would have realised the full estimate for patients’ fees this year had it not been for the Napier earthquake as February' and March were the two worst months for fees’ collection, and of course, very little time and attention could be given to this work during these months. We have still a very considerable amount of office work in connection with matters which arose during the earthquake period. “Patients in other Institutions.— Estimate last year, £2800; actual expenditure, £IB3B 4s lid; proposed estimate, £ISOO. This item provides for patients in sanatoria and pntients in Hanmer Hospital. I iiave discussed this item with the medical superintendent, who is anxious to co-operate to avoid sending patients to special institutions except where he considers this absolutely essential. Having this in view, the estimate has been reduced to £ISOO. INTEREST ON LOANS.

“Estimate last year, £4130; actual payments, £4450 18s lOd; proposed estimate, £4900. The interest payable this year on loans is as follows: £46,000 loan, £2021; £3OOO, £195; £4o’ooo, £1320; £12,500, £750; £4500, £315; allowance for interest on overdraft, £299; total, £4900. The interest provision this year requires to be increased, as we have additional liabilities for interest in connection with the £12,500 loan and the £4500 loan. These moneys are at present gradually being uplifted. NATIONAL PROVIDENT FUND. “Estimate last year, £525; actual expenditure, £9lB 13s 8d; proposed estimate, £7OO. The reduction this year is due to the cut in salaries. AWAPUNI FARM MAINTENANCE. “Estimate last year, £1000; actual expenditure, £997 Is 6d; proposed estimate, £9OO. The cut of 10 per cent wages has been applied to the farm staff. Tire farm account on the year’s working shows a small surplus. “Refund of Subsidy.—Estimate last year, £421 13s sd; actual payments, £421 13s sd; refund this year, £286 His 7d. This is a statutory refund. 'I he amount of the total refund from all boards is divided among board’ in proportion to their capital values. MISCELLANEOUS PAYMENTS. “Estimate last year, £500; actual expenditure, £557 5s 8d; proposed estimate, £322 18s lid. The main payments from this item are the annuities to the ex-matron and ex-sub-matron. CAPITAL ESTIMATES. “The suggested items have been included having regard to the following: We require to levy each year half the amount necessary to provide the sinking fund on the existing loans. 'lnis obligation is one that cannot be avoided. The amount borrowed last year was required to be kept to a minimum, it being then desired to postpone expenditure, and provision still requires to be made for i equipment for the new theatre block, j and for furnishings now required for: the nurses’ home. We are unfortunate in having to provide, immediately, . funds to strengthen buildings .against further damage by earthquake. The other items included are' ones which will have to be dealt with on their merits, though some are commitments. CAPITAL PAYMENTS.

“Repayment of principal and loan sinking fund instalments (£6225). — We have at present running loans amounting to £46,000. The total co be provided as sinking fund instalments on loans is: No. X loan, £600; No. 2 loan, £B4; No. 3 loan, £4000; No. 4 lain, £375; No. 5 loan, £900; total, £6225. “Theatre equipment, £750.—1n consultation with the medical superintendent, a detailed estimate for equipment for the new theatre has been prepared. The theatre building will be completed in May, and pi'ovision for the necessary theatre equipment requires to be made on these estimates.

“Furniture and equipment for nurses’ home building, £450. —Last year, out of loan moneys, part of this item was provided for, as it was known that part of the furniture would have to lie procured before the buildings were ready for occupation. To cover comnvitments and what we require immediately in the way of furniture, it is necessary to x>rovide £450 on this year’s estimates. “New Diathermy machine. £7o. During the last month we nave procured a second diathermy machine, which is at present held on approval. It was necessary to send the machine we have been using for repairs, and with the increased work in the massage department it will ruin the present diathermy machine if it is kept continuously in use. The work noiv is sufficient for two machines.

“Additional "room at Old People’s Home, £IBO. —It will be remembered that the board previously decided to make provision for this on the estimates, and I doubt whether ample provision is now being made. “Finishing fever ward road.—A further £6O is required for this work. “Nurses’ home building.—The provision of £SO is necessary to enable the paths which are now formed around the new additions to the

nurses’ home, and the turning place at the new back entrance, to be tarred sanded.

“Improvements to farm. —The sum of £SO will be spent on providing a light bridge across the Mangaone estuary. “Otaki Hospital. —The Otaki Hospital Committee have recommended that the expenditure for alteration to buildings should not exceed £SO. CAPITAL RECEIPTS. Arrears of subsidy. £570. —There is at present owing to the board from the Health Department the sum of £570 arrears of subsidy. This consists of subsidy promised but not yet paid, £4OO in respect of a bequest, and £l7O subsidy unpaid in respect of last year’s levy. “Halford bequest, £ISOO. —This is half a bequest which the board is due to receive this year, and in the meantime I suggest that the board appropriates half to maintenance and Half to capital revenue. If this is agreed to, together with the next item, the Balsillie bequest, £SOO, we are able to reduce the capital levy from £4IOO to £3900. If these bequests are not used in this manner, a substantial increase in the capital levy will be necessary. “Balsillie bequest, £SOO. —This bequest is due to bo paid over this year. As with the foregoing bequest, the Government subsidy cannot be anticipated, and as mentioned in the previous note, this amount is brought in to help to balance our capital account. “Plant and equipment—The amount of £4500 is being borrowed on debenture security by way of overdraft from the Bank of New Zealand. Up to March 31, the amount uplifted was as follows: —X-ray equipment, £8 12s 4d; equipment and furnishings, Wilson block, £1723 19s lid; equipment and furnishings, nurses' home additions, £153 2s lid; ambulance, £287 13s 8d; water softening plant, £547 11s 6d; sterilising rooms, £209 14s 2d. This expenditure leaves available £1569 5s 6d for the new X ray plant. We have .had advico that the X-ray plant has been shipped and is expected to arrive shortly. Thus it will be seen that the items provided for from this loan have all been met, leaving a small surplus. The cost of the X-ray plant is estimated to be under £ISOO. “Buildings loan account.—This loan of £12,500 was to have been raised from the Public Trust Office last year, secured by debentures for a term of twenty years at 6 per cent. “We were unable to uplift any of the money in the last financial year, and hypothecated these debentures to the bank of New Zealand as security for an advance not to exceed £7500. This was done to enable us to meet progress payments to builders. Up to March 31 last, progress payments had been met as follows: —Additions to nurses’ home, £4573 16s 3d; new theatre, £2416 12s lid; total, £6990 9s 2d. We have thus still available in this loan account £5509 10s lOd, which shows a small surplus over the present commitments on these two contracts. During the last week the Public Trust Office had the money available, and the full amount has nowbeen uplifted and the bank overdraft paid off. W are thus in a position to make the final payments to the builders as soon as they are due. COMMENTS BY MEMBERS. “There is not another board in New Zealand that has such a comprehensive statement placed before it,” stated Mr Monk, in extending congratu- ; lations to Mr Phillipps and the staff. 1 Such a report was very gratifying, he continued, and a very great amount of work would devolve on the manag-ing-secretary and the staff to see that it was carried out. The estimates Pad ; been cut very fine. | The chairman (Mr J. K. Hornblow) 1 endorsed Mr Monk’s remarks. and referi'ed also to the co-operation of the medical superintendent, matron and accountant. “We had no idea when the Government announced that subsides were to be reduced that such an enormous amount of work would be involved,” he continued. It was greatly regretted that it was necessary to make a cut in the salaries. The board would have preferred to retain the previous rates of pay, but the position has been thrust upon them. Other boards that had not done the same wo uM have to reconsider their estimate*. A large amount of money was being spent in unemployment relief, and it was hoped that in future the Government would make arrangements regarding payments to able-bodied men. The past year had been a most trying one for tire board and for the Dominion.

Mr Boyce moved that the travel-

ling expenses of members be reduced by. 10 per cent. Mr Moody seconded and the motion was carried unanimously. As the meeting was the last as far as the representatives of the municipalities were concerned, the chairman took the opportunity of thanking retiring members for the manner in which they had conducted the board’s business during tire past two years. They had given of their best and he, as chairman, had done his best to work in with them. He hoped that the retiring members would be re-elected, as he was convinced that they had the best interests of the people at heart. On behalf of the l>oard, Mr Catley expressed appreciation of the work of the chairman. Messrs McLean and Aitchison endorsed these remarks expressing the hope that Mr Hornblow would bo returned as the representative of Foxton to continue the good work he was doing.

Av. No. Cost per Cost per Oc. Beds Bed Patient 1929-30 £ £ Dunedin 248 223.7 12.2 Napier 195 213 11.4 Palmerston N. 173.4 180.6 10.8 New Plymouth 155.3 202 15.2 Wanganui ... 152.3 189 11.6 Gisborne ••• 132.2 199 13.4

Average Number number operations occupied performed beds during per diem. year. Dunedin . 248.5 2,208 Napier . m.o 1,658 Palmerston N. 173.4 1,319 Wanganui . 152.3 1,036