Oamaru Hospital has announced a 20% cut to the number of beds it provides.
Effective April 4, due to an expected 10% cut in funding from the Southern District Health Board under a new contract starting 2017-18, the hospital will reduce its bed numbers from 30 to 24, Waitaki District Health Services' chief executive Robert Gonzales said in a statement today.
The district health board funding covered only 22.6 beds - six assessment, treatment and rehabilitation beds and 16.6 rural inpatient beds.
Mr Gonzales described the cuts as a "starting point",and said other services were also being assessed.
The hospital would be unable to continue to provide existing levels of service with cuts in its funding from the SDHB not passing on inflation adjustments it was receiving, Waitaki District Health Services (WDHS) chairman of directors George Berry said.
WDHS directors were concerned there was an inequality of funding and rates of payment for various services between different Southern district hospitals, which "clearly disadvantaged WDHS", he said.
The directors had agreed with the district health board to a joint review of services.
The review would be clinically led by an agreed party and would investigate whether any changes to service delivery could be made with significant cost savings, due to the reduction in funding, "which WDHS has not beenable to change".
"If any such savings can be achieved without compromising quality and range of services these will, of course, be implemented. If not, then the reality of underfunding will be more clearly established," Mr Berrysaid.
"We will, of course, keep parties directly involved or affected informed as this review progresses."
Mr Gonzales said the reduction from 30 to 24 beds would not affect staff employment, but would prevent calling in extra staff.