7 minute read
RURAL HEALTH RUNNING OUT OF REVENUE
MATT SHAND, JOURNALIST
There are 26 rural hospitals dotted around New Zealand with eight of them being privately owned or run by trusts. This series looks at the plight of Otago’s rural hospitals, as a case study of what happens when healthcare providers are not funded adequately to meet community need.
Asking a patient if they have the means to pay for medical treatment is an awkward conversation to have at the front door of a hospital. But this is occurring in rural locations around Central Otago due to funding constraints and budget cuts faced by the region’s rural hospitals.
“It’s not what you expect to hear when you turn up for treatment,” Dunstan rural doctor Jonathan Wills says.
“Secretly, we treat them anyway. What else is there to do? Send them several hours by car to Dunedin Hospital or just ask them to leave and close the doors?”
Discussions about closing the doors of rural hospitals are happening with greater and greater frequency in rural locations. There are 26 rural hospitals in New Zealand, eight of them run independently of Te Whatu Ora.
In the southern half of the South Island this includes hospitals in Gore, Balclutha, Clyde and, until recently, Oamaru.
The picturesque location of these hospitals often coincides with an accompanying remoteness from major centres. Without these hospitals, patients in some key rural areas would have to travel many hours by road to the closest treatment centre.
In the late 1990s the Government stopped directly providing health care through these hospitals because of the cost. However, through a variety of arrangements, local communities found a way to keep them open.
Some were purchased by councils, others saw GP clinics band together. All relied on a level of goodwill from the community and from their staff.
Twenty years on, again, nearly all of them are facing significant financial challenges. These challenges have been brought on by funding shortfalls, cost of living pressures, pay equity commitments and spikes in acute demand.
The spike in demand has been in both the number and the complexity of cases. Coupled with shortages in staffing, it is creating a perfect storm.
If rural hospitals close, or lose the ability to provide certain services, patients will have to try to access already-strained services in urban centres or go without.
Oamaru Hospital is the first rural hospital to cease operating independently, but it may not be the last. The hospital was running a $2 million a year deficit (“Decades-old funding debacle”, p19) before Te Whatu Ora resumed operational control, on behalf of central government, on 1 July this year. But many in the community are worried the history of cutting services is going to repeat itself.
“The failure caused by underinvestment in the health care system will be felt first in rural regions,” Corporate Services Director at Oamaru Hospital Andrea Cairns says.
“We were underfunded in 1924 [when central government first took control of the hospital] and have struggled for finances for more than 100 years.
“What will happen to the communities if trust hospitals like ours must close their doors? Can people live here? And up until what age? People are living longer and with more health complexity, but funding does not keep up with this fact.”
Chief Executive of Clutha Health Gary Reed says all rural hospitals are on life support.
“Funding is not and has never kept up with costs.
“We are always told we are valued but there is no actual money. Unless we can secure additional funding, it is unlikely we will be here in 12 months.
“If we cannot see the patients in the community, where do they go?”
Jonathan Wills says the situation is beyond dire, and it is only possible to keep the hospitals open because of the goodwill of clinical staff.
“If trust hospitals run out of money or go over budget they cannot just say sorry and ask the Government for more money,” he says.
“If they run out, they have to declare bankruptcy and close down. We are always playing catch up with staffing rates and resources and are reliant on goodwill just to keep the doors open.
“We want to help the community. It’s what a hospital does. We are lucky to have such good staff, but there is always a limit and we’ve reached that.”
ASMS’ analysis of Budget 2024 found it did not provide the needed funding boost to stave off shortfalls across the health care system.
“On a per capita basis operational funding will fall both in nominal and real terms,” ASMS researcher Lyndon Keene says.
“Health services are being asked to do more with less for every patient.
“Vote Health’s budget only increased 0.4 per cent on estimated actual spending from 2023/2024.
No additional funding has been provided for the backlog of planned care following the Covid-19 pandemic, and this will make reaching Government health targets impossible.”
In the regions, the lack of further funding will exacerbate the problems providing services and that health care need will need to be met by metro hospitals.
That will require resources to transport patients to and from the hospital, place additional pressure on those and just domino into more people unable to get health care.
The sacking of Te Whatu Ora’s board has seen the financial situation at Health New Zealand thrust into the limelight. New Commissioner Professor Lester Levy says the organisation as a whole is losing $130 million every month, with a projected deficit of $1.4 billion if left unchecked.
A few weeks after this initial assessment he revised this statement to say the situation at Te Whatu Ora was “worse than expected”.
While this compounds the specific pressures faced by Otago’s rural hopsitals, Te Whatu Ora has committed to a new initiative called the Rural Sustainability Project.
Te Whatu Ora National Clinical Director for Primary and Community Care
Sarah Clarke says there are geographical gaps in the provision of medical care is in New Zealand, and the project hopes to keep rural hospitals, especially those that are struggling to stay open.
“We have a worldwide shortage of health professionals, and New Zealand has its own shortage,” she said.
“We have a population that is 18.9 per cent rurally based. I do not have a percentage for the number of rural doctors working compared to the city, but we know it is not as high.
“We do know there are 92 GPs per 100,000 head of population in rural regions as opposed to 103 per 100,000 in metro areas.
“We [rural doctors] are definitely seeing more patients than we used to and working harder. There is only so much extra we can do, which results in wards and beds being closed down.
“The Rural Sustainability Project is about maintaining safe and sustainable rosters, and it is important we not only look at financial sustainability but clinical sustainability as well so we can come up with better models for the future.
“We know if care is not available and people have to travel for it, they often won’t, which adds to unmet need.”
The question hinges on what new models of care and sustainable health will look like. It is made more relevant by calls to cut costs across the health care sector and what that will mean practically to rural hospitals.
But if we need a reminder of what could happen with sustained underfunding of the wider health system, the plight of rural hospitals gives us an insight.
Will telehealth replace face-to-face doctors, and what happens when things go wrong? Will patients have to travel to Dunedin to get treatment, and will people over a certain age or illness threshold simply have to leave town due to limited health care options?
These rural hospitals are hanging on waiting to hear what will occur while struggling to keep the lights on in the interim.
