Hospitals facing 'brutal' budget squeeze - leaked report

Longer waiting lists and fewer services are just some of the things New Zealanders could be facing at the country's hospitals as the health system faces having to make cost savings.

Leaked documents show the Government’s being advised to have DHB’s cut nearly $200m from their spending next year. Source: 1 NEWS

Leaked documents seen by ONE News show the Government has been advised to have district health boards cut nearly $200 million from their spending next year.

A two week old cabinet committee paper on health funding for next year's budget leaked to Labour asks ministers what level of funding should be signalled to district health boards for next year's budget.

National's election promise of faster cancer screening was rolled out to much fanfare last week but Labour claims it hides the real story in health.

"On the one hand he is saying the good things the Government is doing while he is not telling New Zealanders they are putting insufficient money into health to provide the services they need," Labour's health spokesperson Annette King says.

The leaked paper offers two options for Cabinet approval - one from Treasury of $250 million and one from the Ministry of Health of $320 million. Treasury says under either option the financial pressures facing DHBs are "considerable" and as a result "cost efficiencies" are needed.

That would see cuts of over $190 million for Treasury's option or more than $120 million to meet the Health Ministry's funding target.

"It won't be a squeeze, it will be something quite brutal. The public system has suffered severe financial constraints for three or four years," Ian Powell from the Association of Salaried Medical Specialists says.

"This will make the situation much worse. Our system is creaking and straining under the pressures."

Health Minister Jonathan Coleman is refusing to comment but Government sources have told ONE News political editor Corin Dann that the report wasn't considered.

Health traditionally receives a large chunk of new budget spending to keep up with inflation and population growth, however, 2015 is looking more extreme.

Advice from Treasury in the Cabinet paper says that due to high incoming migration and adjusted census data the population is expected to increase by 76,000 people in the coming financial year.

"It's going to blow out somewhere and I believe you will see the blowout in this coming year," Ms King says.

Upcoming wage negotiations are also likely to add to health budget pressures.