How We’re Funded

District Health Boards are publicly funded by the Ministry of Health based largely on their share of New Zealand’s population. This is known as population-based funding (PBF), and it aims to equitably allocate available health funding between DHBs according to the relative needs of their populations and the cost of health and disability support services to meet those needs.

Adjustments are made for a number of things that affect the cost of services being provided. For example, services for the average older person are more costly than those for the average younger person. Ethnicity, deprivation and rurality are also factors. Therefore, areas with fast-growing populations, significant numbers of people with high health needs, a large percentage of older persons, or vast remote areas could expect to receive funding adjustments.

Census 2006 statistics show that South Canterbury has 1.29 percent of the New Zealand population. We have the highest percentage of people age 65 or older, the lowest percentage of Māori and Pacific Islanders, and more than double the national average for people living in rural areas – all things which affect our funding. Under PBF in 2008/09 South Canterbury DHB will receive funding of approximately $137 million (a 5.8% increase on the prior year), which is more than our strict population share because of adjustments such as those just described. SCDHB receives (and spends) about another $18 million from sources other than the Ministry, such as ACC, interest income, sale of goods and other commercial activity.

Another aspect of PBF is that DHBs must pay the costs associated with their population receiving care from another DHB (e.g. a patient from Twizel receiving radiotherapy at Christchurch). These are known as inter-district flows, or IDFs. In 2007/08 SCDHB expects to receive $4.7 million in revenue from other DHBs for treating their patients, but will pay out about $19.7 million to other DHBs to cover their costs in treating people who reside in South Canterbury.

Aside from PBF funding, the Ministry of Health provides “tagged” funding which can be spent only on specific required initiatives. Examples are pandemic planning, the 2004/05 meningococcal immunisation programme, and the orthopaedic joint replacement initiative.