The Tuatapere Maternity Hospital is likely to close its doors to in-patient care from the end of March next year as the Waiau Health Trust grapples with a way to balance the books while still delivering the health services vital to a relatively isolated rural community.
Staff were told by the Waiau Health Trust on November 29 that it was unlikely its maternity contract with the Southern District Health Board would be renewed when it expires on March 31 next year because the trust had been operating at a deficit for the past five years.
Trust chairwoman Anne McCracken said there had been no threat to withdraw funding, it was simply a realisation by the trust directors that the current situation was not only unsustainable but, if allowed to continue, would also be irresponsible.
“Directors have an obligation to act fiscally and with prudence,” she said. “We’ve been running in deficit for five years... financially you can’t continue to sustain a deficit.”
Directors feared the financial situation might result in the non-renewal of other vital health care contracts or, at worst, force the trust into liquidation. There was no choice but to tackle the future viability of in-patient maternity services head-on if they were to protect other health provision contracts on behalf of the community, Mrs McCracken said.
The Waiau Health Trust is a private charitable trust contracted by the Tuatapere Community Medical Services Trust, known as TOMCAT, to provide health services to the Western Southland community. Along with maternity, these include such services as day care for the elderly, district nursing, home help and the Ohai medical clinic.
The Waiau Health Trust owns no assets, these – such as the medical centre and maternity buildings, vehicles and equipment – are owned by TOMCAT which leases them to the Waiau Health Trust.The trust produces a business plan every year to be approved by TOMCAT which also receives a dividend.
The Waiau Health Trust is contracted by the Southern DHB to carry out 25 in-patient births and care post natally for 50. But while there were reasonable numbers of pregnancies in the trust’s primary catchment area, the reality was that only a third of them actually gave birth at the Tuatapere Maternity Hospital, Mrs McCracken said.
“The midwives do a fantastic job, there’s no criticism of that... but the model isn’t working and the costs are huge,” she said.
“It’s uneconomic and unsustainable now and in the future to continue with the in-patient model that we currently have.” Adding to the financial woes were “extremely challenging” compliance costs that had trebled in the past five years, mileage costs had trebled in two and-a-half years and insurance had gone up 100 percent.
The trustees of the Waiau Health Trust and TOMCAT held a joint meeting in July to discuss a way forward after their auditors and lawyers flagged concerns about the ustainability of the current financial situation. Ironically, this year the maternity services were on target to meet their financial budget but Mrs McCracken that was no help on the back of five years of losses. She declined to put an exact figure on that accumulated loss but said it amounted to a six-figure sum.
Southern DHB finance and funding manager Robert Mackway-Jones said the DHB supported the trust’s difficult decision.
“We are confident the decision will help ensure the sustainability of Western Southland health services and will allow the service to develop to meet changing community needs. Southern DHB have recently given substantial funding increases to support district nursing and other community support services to the Tuatapere Trust – the decision was not about budget cuts,” he said.
“Some – not all – maternity services in the district have contracts which end in March 2012 and the DHB will be working with these providers in renewing these contracts," he said.