The Effects of the Cuts

The l% across the country reduction particularly affects those board areas which are expanding at the greatest rate i.e. Wellington and Auckland. This raises serious questions as to the rationale behind a policy which seems to be based on expedience rather than looking at the actual needs of the particular board areas.

It is difficult to gain a National overview of the recent cuts to the health system, particularly as a number of the Hospital Boards are noticeably silent on the whole issue. However, the two hospital boards which were informatively helpful, those of Wellington and Auckland, provided enough data to isolate some trends.

The Auckland Board, largest of the twenty-nine boards in New Zealand, has estimated that with inflationary influences its total cut will be $3 million. According to the board the main emphasis has been in streamlining the administration by such measures as savings in photocopying, and closer monitoring of such things as postage, power consumption etc. However, staff replacements have also come under close scrutiny and overtime has been reduced by 25%. This must have an effect on the numbers of nurses, social welfare workers etc. that the Auckland Hospital Board considers it can afford.

The Board hopes that with prudent management direct cuts to services will be avioded, but it predicts that expansion in any particular area, regardless of need, will not be possible unless sufficient savings can be made elsewhere. However, as all the details of the savings have yet to be finalized, more direct cuts may have to be made.

In Wellington the situation is clearer, but more alarming. For a number of reasons, the Wellington Hospital Board had been experiencing financial difficulties before the cuts were announced in March. These factors included the maintenance of rapidly expanding services, the accommodation of clinical school and an unrealistic budgetary allocation from the government.

With the March cuts, the effects of inflation, and the results of the devaluation of the New Zealand dollar, and the revaluation of the United Kingdom's currency, the Board estimates a reduction of funds of approximately $2-4 ml this financial year. This could add up to about a 3% reduction. According to a spokesperson from the Board, "with a cut of this size it is impossible to avoid some reductions in patient services. It is realized that as well as a deficiency in money the Board had the problem of a thinly spread nursing service."

Notwithstanding these cost restraint measures a gap of $600,000 still exists which will have to be met over the next few months.

What does the "reduction to services" mean in practice? Besides streamlining in administration e.g. reduction in conferences, rationalizing xeroxing etc., some very important services have had to be eliminated or partially reduced. The major reductions have been the closures of a paediatric ward and a VD Clinic at Hutt Hospital, the closure of one of the four Wellington surgical wards and an alcohol and drug dependence unit at Porirua Hospital.

Some of the less publicised and not so dramatic reductions to services include charging parents for meals, the elimination of routine biscuit supplies to patients and staff, reductions in drug expenditure and a review of the community services attached to the hospital. If these measures do not recoup the loss in income then some of the medium to long term options will have to be considered, such as reviewing the decision to keep the maternity hospitals at Elderslea and Paraparaumu in operation or reviewing the level and nature of inservice training.