HOSPITAL TREATMENT

Wairarapa Times-Age, 11 June 1943, Page 4

HOSPITAL TREATMENT

ADDITIONAL SOCIAL SECURITY PAYMENT REDUCTION IN SUBSIDY. WAIRARAPA BOARD'S POSITION. The financial effect of the additional payment of 3s per day per patient from the Sccial Security Funds in respect to hospital treatment is set out in a statement by Mr Norman Lee, managingsecretary of the Wairarapa Hospital Board. Mr Lee states:—

Taking as a basis of calculation the estimates of the board as prepared for the year ending March 31, 1944, the additional payment of 3s per day from the Social Security Funds for payment of hospital treatment of patients is equivalent to an increase in revenue of: (a) If the amount is to be paid for the full 12 monthly period, £12,100, or (b) if the amount is to be paid only from July 1, £9,075, with a consequential reduction of the net estimated expenditure.

The following shows the apportionment of maintenance net estimated expenditure between levy and subsidy in estimates as originally prepared, and with estimates providing for additional payment from the Social Security Funds:—

The net estimated expenditure as adopted by the board was: Levy, £32,076; subsidy, £26,338; total, £58,414. The net estimated expenditure providingtor an additional £12,100 from Social Security Funds was: Levy, £27,235; subsidy, £19,079; total, £46,314. The net estimated expenditure providing for additional £9,075 from Social Security Funds was; Levy, £28,445; subsidy, £20.894; total, £49,339. The Governmet subsidy in the £1 of local authorities' levies was. respectively, on the above figures, 16s sd, 14s, and 14s BAd, and the maintenance rate in £1 on the rateable capital value, 0.324 d, 0.275 d and 0.285 d. The apportionment of the additional Social Security benefit between the levy and subsidy was: On basis of £12,100, levy £4,840, subsidy £7,260. On basis of £9,075: Levy £3,631, subsidy £5,444.

METHOD OF ALLOCATION. The method of allocating the net estimated maintenance expenditure of hospital boards between the levy on contributing local authorities and Government subsidy is somewhat complex —the procedure being laid down in the fourth schedule of the Hospitals and Charitable Institutions Act, 1926. When ascertaining the levy and subsidy each year, one-tenth of the previous year’s total estimated maintenance expenditure for the Dominion is apportioned in the rate that the valuation of the respective districts bears to the valuation of the Dominion as a whole. This proportionate amount is added to 16/40ths cf the net estimated expenditure, and the total represents amounts to be levied on local authorities. Therefore, the higher the valuation of the district the greater the amount to be added to 16/40ths of the net estimated expenditure. Perhaps this district is unfortunate in that its capital valuation is high in comparison with other districts which are called upon to provide similar services.

COMPARATIVE VALUATIONS. The following extract from the 194041 return of the Department of Health in regard to population, hospital beds and valuation of hospital districts, is submitted to show that although the services rendered are practically equivalent in all cases, the valuation of this district is considerably higher:—Taranaki Hospital District, population 39,420, total occupied hospital beds 211.5, capital valuation £13.194,255; Wairarapa, 34,850. 207.2, £23.047,921; Gisborne, 27.110, 168.4. £13.784,761; South Canterbury, 44,500, 206.1, £19.409.382; Southland, 76,090, 326.3, £26.838,108. The Government subsidy on levies for maintenance expenditure fluctuates from 14s to 26s in the £. The system of fluctuating subsidy was introduced to more or less assist hospital boards with the greater expenditure and to maintain an average for the Dominion-of £ for £, If on account of fluctuating rates subsidy paid exceeds £ for £, then such excess has to be refunded to the Public Account by all boards in the proportion that rateable capital value of respective districts bears to the capital value of the Dominion as a whole. HOSPITAL EXPENDITURE.

“Hospital board expenditure throughout tpe Dominion is increasing and unless the expenditure of the Wairarapa. Hospital Board increases in the same proportion as other districts the present method of apportioning levy and subsidy will become more and more detrimental to the board until such time as the minimum subsidy is

reached. Then if any large refund is also to be made the position is not in any way improved. The present system of allocating levy and subsidy was designed in 1923 when the total net estimated expenditure for all boards throughout the Dominion was £734,799. The total net estimated expenditure for all boards for the year ended March 31, 1943, was £2,279,907, and during this period Social Security hospital benefits have been introduced. It is suggested that the time has arrived for some alterations to be made in the method of computing levy and subsidy. It is the only aspect of hospital administration that has not changed during the period. Although the Social Security hospital benefit payable for the treatment of hospital patients is to be increased from 6s to 9s per day, the effect of this increase is ’that if the amount is paid for the full year, then with estimates for the ensuing year local authority contributions will be reduced by approximately 15 per cent, and the subsidy payable will be at the rate of 14s in the £l. If the increase is paid from July 1 only, then levies for the ensuing year will be reduced by approximately 11 per cent, and subsidy reduced to 14/8J in the £l.