The health company, which is wholly owned by the Waitaki District Council and operates Oamaru Hospital and provides health services elsewhere in the Waitaki district, faced a "significant deficit" during the 2009-10 financial year, board chairman George Berry says in the annual report.
A $338,046 deficit was projected for the past financial year following withdrawal of funding by the district health board for a Multi Employer Collective Agreement (MECA) adjustment for medical staff and other funding.
However, the board, management and staff worked together to make efficiency and revenue gains and cut the deficit to only $35,717, he said.
"The result was a considerable improvement on budget," Mr Berry said.
The final deficit was not considered significant, given the overall financial position of the company.
Some areas where the company made savings or achieved efficiencies included trimming on-call arrangements never or rarely used, reviewing the charging procedure for overseas patients, introducing some private services and securing CT (Computed Tomography) scanning contracts with Southern Cross and the Accident Compensation Corporation, reviewing capital expenditure and reviewing staff rosters.
The savings achieved represented a significant contribution to assisting the Otago board with its deficit in health funding and expenditure in Otago during the past financial year.
Despite the savings, the board considered the quality of health services provided in the district continued to be of a very high standard when compared with other communities, Mr Berry said.
The company would take all appropriate opportunities to enhance and extend those services.
However, the company also faced challenges, including uncertainty of funding from the Otago board, uncertainty over the results of the hospital review capacity and centralisation of the needs co-ordination service to Dunedin.
The company recorded total income of $10.75 million for the 2009-10 financial year, of which just over $9 million came from the Otago board funding.
In the previous financial year, income was $10.838 million.
Total expenditure was $10.785 million, compared with $11.256 million in 2008-09.
The company also operates the Waitaki District Health Services Trust, which has $3.488 million in assets from donations for health and support services.
The trust's revenue for the past financial year was $313,174, expenses $51,377 and depreciation $109,673, leaving a net surplus of $152,124.
The company's annual report will be presented to the council's meeting tomorrow.
