HOSPITAL FINANCE

Hokitika Guardian, 26 March 1932, Page 6

HOSPITAL FINANCE

EFFECT OF ECONOMIES

CRITICISM OF CLAIM

AUCKLAND, March 22,

“Dr. Campbell Begg’s claim that a>s a result of the recent reforms Wellington Hospital, without loss of efficiency, will save £60,000 a year as compared with 1930-01 does not appear to be capable of substantiation, and his estimate appears to be grossly inaccurate and likely to mislead xne public,” declared Mr William Wallace, chairman of the Auckland Hospital Board, and president of the Hospital Boards’ Association. Remarking that he had taken the opportunity of inquiring into the claim while in Wellington, Mr Wallace stared that Dr. Begg’s estimate was arrived at by simply comparing tbe cash paid out during the month of JaiHtary, £7770, with the average monthly payments for the year ended March 31 last, £12,864. The difference was £5094, which he multiplied by twelve and claimed that the result represents annual savings. “He failed to point out that the actual cash payments made in January did not truly represent the annual expenditure. They did not include the fair allocation of important items of expenditure,” he said. “For instance, January payments included only £l6l interest charges on loans, whereas for 1930-31 the average monthly amount paid was £1468. Approximately the same average monthly’ amount is payable at present so that Dr. Begg in respect of this item alone has overstated the annual savings by about £15,000. “NOT ACTUAL SAVINGS.”

“The absurdity of his claim is further emphasised when it is explained that payments for January for surgical dressings were £7, or £B4 a year, whereas the annual expenditure ,is about £750. Insurance premiums were nil for January, whereas tbe annual charges are about £70,0. “Furthermore, an important point which D.r. Begg should have mentioned is that the ‘savings’ referred to by him do not represent actual savings as far as the ratepayers and taxpayers are concerned,” Mr Wallace said. Gross expenditure must not be confused with net expenditure. While tbe gross expenditure has dropped with the reduction in patients under treatment, receipts from patients’ fees have also dropped. Taking the ■statement of the cash receipts and payments for the past eleven months for what it is worth the net savings on the hospital side as compared with last year appear to be about £14,000. On this the 10 per cent, cut in salaries and wages must surely account for ~,W--onsidcrable portion, while it lia.s been our experience in Auckland that material savings have ro-udod-from a reduction in the price of sup-, plies, particularly provisions. COMPARISON OF COSTS.

“[ have no doubt that other real savings have been ofleeted, hut a more restriction in the service is not necessarily an economy,” continued Mr Wallace. “In the Auckland Press a comparison was made with the maintenance cost at the Auckland Hospital. This is hardly a fair comparison as the cost at Wellington was last year £4O per occupied bed greater than Auckland, indicating that Wellington had further to go than Auckland in effecting economies.”

Mr Wallace expressed his hope that the matter of hospital administration would he fully discussed at a forthcoming conference of hospital boards. He had no desire to enter into a newspaper controversy.