Better Sooner More Convenient Primary Care - New Zealand Doctor

9 Financial sustainability
9.1 Status quo financial situation
As noted in section 1, the WCDHB is projecting a sizeable deficit. The table below shows the
DHB and PHO forecast annual profit and loss for 2009/10 based on the six months actuals to
December 2009, using the proposed new service groupings 18 .
Overhead &
Annual forecast Revenue Expenditure Profit / loss
revenue
allocation
Profit / loss
after Oheads
Buller IFHC - 6,916,966 10,971,593 -4,054,627 311,079 -4,365,706
Grey IFHC - 4,786,998 5,501,697 -714,698 - 377,934 -336,764
Westland IFHC - 2,251,108 2,644,070 -392,962 125,677 -518,639
IFHC distict wide - 2,623,900 2,957,122 -333,222 207,653 -540,875
WCPHO - 5,186,089 4,666,855 519,234 - 519,234
Total primary & community - 21,765,061 26,741,337 -4,976,276 266,474 -5,242,750
Mental Health - 12,503,600 10,665,960 1,837,640 1,644,881 192,759
DHB secondary - 36,143,984 43,823,541 -7,679,557 640,689 -8,320,246
DHB corporate - 7,911,042 11,246,868 -3,335,826 - 3,335,826
0
DHB Funder - 51,726,777 46,304,029 5,422,748 783,782 4,638,966
Total DHB services - 108,285,403 112,040,398 -3,754,995 - 266,474 -3,488,521
Total West Coast - 130,050,464 138,781,735 -8,731,271 0 -8,731,271
Based on status quo revenue and expenditure, each of the IFHCs, plus the district wide service
would make a sizeable deficit. Overall, the estimated deficit for primary and community
services is $5.25 million, approximately 20% of current revenue. The PHO is forecasting a
surplus of around $0.5 million for the year, resulting from lower than anticipated uptake of
some of the LTC and other fee for service programmes – hence the status quo DHB loss on
these services is in the order of $5.75 million for 2009/10. At the same time, the DHB
secondary care services core deficit is about $8 million, partially offset by a DHB funder
surplus.
The reader should note that this projection is based on a 6 month snapshot, updated to
incorporate WCDHB finance team forecast as at end January 2010. Year end actuals for 2010
may vary from those projected. This table also does not incorporate any adjustments for the
expected DAP budget 2010/11 changes.
Overheads and internal revenue have been allocated using the 08/09 national pricing project
West Coast submission with minor adjustments.
If the business case is approved, the DHB and PHO will undertake a more detailed allocation of
direct and indirect revenue and expenditure to fully validate the new service groupings and
refine the P&L forecast.
18 Note that known duplicates in the DHB funder arm and PHO have been eliminated, but some may persist resulting in
double counting of both revenue and expenditure – this does not affect the profit/loss calculation.
Business case EoI V38 AC 25Feb10 Page 58