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Checkpoint - The health system is facing a funding shortfall so bad that three DHBs are likely to need at least $4.3 billion in capital expenditure alone.

Canterbury DHB's hospital is being rebuilt but after that it will still be short of beds, Counties-Manukau has rotting buildings, and Auckland is short of beds.

Those three need $4.3 billion in capital expenditure to get past those issues, all after years of officially being in surplus.

Peter Glensor, who has chaired Hutt Valley DHB, Capital and Coast DHB and DHBNZ, the national collective of DHBs said it was at a point where no more cuts could be made.

"There simply are no more savings that can be made, there are no more reductions in spending that can be made, without a reduction in servicing.

Part of the dilemma that DHBs have is they're not allowed to say that, he said.

"What happened over the last government's term was that the instructions from central government became more and more explicit, more and more pointed.

"If you are appointed you are appointed at the minister's grace and favour ... if you don't like it and you can't do it then you need to move on."

"You have to make it all sound as though 'we're becoming more efficient constantly, and all of these changes are for the good of the community'."

He said it had eroded the entire notion of the health system.

"When you were faced with financial pressure you spent the money on the areas the government had determined were the highest priority, you either held or cut back some of the other areas and the whole notion of the health system as a total system began to dissipate."

It shows the difficulties faced by several DHBs in funding

The acting chair of Canterbury DHB warned last year "significant service cuts of unprecedented scale" would be the result of the government not approving its deficit.

Treasury itself almost characterised the DHBs as recalcitrant.

"Appointed board members have not been able or willing to get the management team and clinicians to adopt adequate management disciplines."

A source at the DHB told Checkpoint there was an expectation DHB members would toe the line.

Canterbury chief execuctive David Meates said they had been under significant pressure, and building construction after the earthquake was being held up.

"The challenge that we have is that we're still to start on the major earthquake repairs on the Christchurch campus site."

"The new capacity coming on does not actually add any additional capacity from what we had pre-earthquake."

Council of Trade Unions economist Bill Rosenberg said it had been relentless pressure.

"Some DHBS have got government observers sitting on their boards, some have even ... the boards have been dismissed and they've put in effectively the administrators such as in Southern DHB when they did not make a surplus.

"We think of DHBs as being at least partly democratic institutions that we elect once every three years but really the dominant force has been through Treasury, the Ministry of Health, and the ministerial appointments on those boards.

He said all this was happening while the DHBs were officially in surplus.

"By putting off, sweeping under the carpet the needs of tomorrow for future generations to somehow pay the bills for, the pressure that came on DHBs as a result was huge."

Health Minister David Clark declined to be interviewed. He is meeting with the head of Counties Manukau DHB tomorrow.

Former Health Minister Jonathan Coleman, who hung up on an interview with Morning Report over the rot at Counties Manukau DHB, also declined to be interviewed by Checkpoint as he has done for some time.