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West Coast DHB funding deal makes no sense

“Pushing the West Coast DHB into an expensive public ‘private’ partnership to fund the new Buller hospital makes no economic sense”, says Bill Rosenberg, CTU Economist, referring to a revelation by the Association of Senior Medical Specialists (ASMS) yesterday which showed that the hospital would be owned by ACC and leased back to the DHB. “If it costs $750,000 to $1 million per year more than conventional funding arrangements, this not only wastes funds required to meet West Coast health needs but is a bad precedent that puts additional pressures on already underfunded DHBs.”

“The government changed the way in which DHBs obtain their capital for similar investments from February this year. I estimate this will cost DHBs around the country an additional $50 million in the next financial year. Even if the government compensates them for this, the new higher cost of funds will encourage DHBs to use more expensive private funding. This makes no sense for the Health system or public finances in general,” said Rosenberg.

Rosenberg supported the ASMS call for full public disclosure of the details of the deal and an independent evaluation of its risks.


For ASMS statement see: “DHB being pushed into funding deal that will take money from patient services; full disclosure and independent scrutiny required”,