Government implements population funding for DHBs

Health Minister Annette King says DHBs will receive an extra $137 million in the next financial year to bring their total new funding for the year to $338 million.

Ms King said the additional $137 million, previously unallocated from the $3 billion funding package announced in December 2001, is designed to smooth the path to the population-based funding formula.

"The extra funding means that most of the DHBs will be able to eliminate their deficits by the end of the 2003/04 year,'' said Ms King

"The Cabinet recently signed off the final version of the population-based funding formula (PBFF). This means we can now progressively allocate funding not on the basis of history, but to reflect population numbers and characteristics.

"This is a hugely significant step in completing the move this Government initiated to a population focus for our health system.

"The New Zealand Health Strategy already provides the big picture. DHBs have been planning how they will meet the strategy’s objectives, and now we have a way to match funding to board populations and their health needs,” she said.

“I will be expecting boards to live within their budgets. Boards have already been told of incentives to encourage financial responsibility, and disciplines will also be applied to ensure that budgets are not overspent.”

Ms King said boards have been briefed this week on the details of how the formula affects them, and on their specific funding allocations. "I have also told them I appreciate the work they've done to enable us to get to this point. These initiatives mark the end of the first year of DHBs, and begin a new phase in their operation and maturity.

Ms King said the PBFF "weights" funding for a board's population according to the likelihood of usage of services. The formula reflects age, gender, ethnicity and deprivation and Boards also receive funds reflecting unmet need, rurality and special disadvantages caused by size or remoteness.

“The boards have eagerly awaited the implementation of more equitable funding across New Zealand regions from Vote Health. This is the first step.”