A big insurance hike is a "done deal" this year, but the Southern District Health Board is already looking ahead to reduce future premiums, board members heard yesterday in Invercargill.
This week, it was revealed buildings and equipment insurance increased from about $550,000, to $1.9 million in 2012-13.
The rise was because of the extra cost of insurance following the Canterbury earthquakes, and a change in how DHBs shared the cost of the premiums.
Chairman Joe Butterfield asked if this year's premium was a "done deal" the board was "stuck with", which funding and finance executive director Robert Mackway-Jones confirmed.
Attention had turned to next year, with negotiations on 2013-14 premiums starting next week.
Two factors affected premiums, which were divided between the country's 20 health boards jointly negotiating for the best deal.
Firstly, boards could seek higher excesses, and changes to cover type.
Also, debate was ongoing between boards over the fair allocation of premiums based on each board's natural disaster risk, Mr Mackway-Jones said.
New weighting given to an area's risk profile this year resulted in Southern taking a greater share of the premiums.
While he did not think it would affect the premium this year, the debate could change how they were allocated in future, he said.
Board member Richard Thomson told the meeting he was surprised the Southern DHB was seen as high-risk for natural disasters, given Dunedin did not have a high earthquake risk.
Mr Mackway-Jones said Dunedin had a higher-than-average risk of flooding, while Southland had a higher-than-average earthquake risk.
The insurance cost was a "very large item" the board would need to find savings to accommodate, he said.
In July, the first month of the financial year, which was reported back this week, the board posted a $700,000 deficit.
The board does not have a confirmed budget for 2012-13, as its annual plan is yet to be approved.
In its 2011-12 statement of intent, a $8.65 million deficit is projected.
Board members heard the adjusted unaudited 2011-12 result was now $13.2 million, up from $12.7 million reported last month.
