The Government has revealed its District Health Boards are expected to end the financial year nearly $350 million in debt.
Health Minister Dr David Clark says all DHBs are on notice to improve their performance and form a plan to return to financial stability.
He says the previous Government is to blame.
"Our public health service was chronically underfunded by the previous Government. For nine years DHBs were financially squeezed and staff were put under huge pressure."
Dr Clark says increased staff costs are said to be the main reason for DHB deficits.
"The hiring of an additional 2,667 full time equivalent staff in the first half of 2018/19 (at a cost of around $126 million). That includes 440 extra medical staff, 1,271 more nurses and 303 allied health workers."
The Minister says it’s going to take more than one Government Budget to fix the problem.
"This Government will continue to invest more in Health so that DHBs can continue to deliver the quality services that the public expect and deserve. But DHBs must also spend every health dollar wisely," Dr Clark says.
"It is clearly challenging for DHBs to improve their financial position while at the same time introducing new ways of working that will improve access to services. Some DHBs are managing that transition better than others.
"At the end of last year I wrote to all DHB chairs expressing my disappointment with their collective financial performance. It is not acceptable to see some DHBs forecasting deficits to continue for years to come.
DHB performances will be monitored closely over the coming months. Dr Clark says he’ll be making changes to board memberships if required.