CHIEF EXECUTIVE OFFICER’S REPORT RECOMMENDATIONS:

1. That the Board notes this report.

1 FINANCIAL RESULT SNAPSHOT – AUGUST 2007

The August financial result was a pleasing one at $186k better than budget giving a year to date surplus of $582k, which is $1,820k better than budget. The deficit for the year of $3,323k is due to the planned mental health expenditure of prior years surpluses. The August budget variance for the Provider was zero, with the Funder delivering a $124k variance and Governance $61k. The positive variance in both Funder and Governance is as a result of higher revenue as well as lower overall costs. Shared Services transition costs are below plan, DSS costs are below plan and Personal Health costs are above plan for the month. In the Provider, both revenue and personnel costs are better than planned, however, other costs are above plan. Personnel costs are currently favourably impacted on by lower FTEs than planned, however, we anticipate that the unplanned anticipated cost impact of salary and wage settlements will soon impact the bottom line adversely. The detailed financial report is included separately in the agenda.

2 CURRENT KEY ISSUES The following are the current key issues that we face: • Planning & Funding

− Bedding down the Planning and Funding team following the recent regional reorganisation

− Recruitment to vacant positions − Finalising after hours primary care coverage − Progressing the community pharmaceutical initiative − Escalation in funding expectations in the Provider Arm as well as Non-

Provider Arm sector resulting from recent wage settlements.

• Provider Arm − Managing hospital capacity with high winter demand − Recruitment to fill vacancies − Meeting elective volume expectations with current resources − Ability to assist Southland DHB where possible re doctor shortage − Managing expectations of salaries and wages increases − Unresolved MECA negotiations − Meeting capital expenditure requirements

3 PRIVATE SPECIALIST REFERRED LABORATORY TESTING

Five of the six South Island DHBs (all excluding Nelson Marlborough DHB) have agreed to consult stakeholders on whether public funding for private specialist referred laboratory testing should cease. Following the delays to the commencement of consultation, the project is now planned to commence with consultation on 01 October 2007 and continue into the first quarter of 2008.

4 SOUTHERN ALLIANCE UPDATE Southern Alliance continues to make good progress. The joint progress report to the Boards prepared by Christine Miller is attached at Appendix 1. Southland DHB Board agreed to the Otago DHB requested changes to the Foundation Agreement, and the agreement is now ready for signature. With most of the support structures now in place (IS still to be finalised), the focus of the REMT will now be on exploring opportunities through regional clinical service planning.

5 IS STRATEGY

Grant Taylor and I will be presenting the national framework and local implementation thereof to the Board at the October meeting as requested. I have included the Introduction and The Advisory Board’s 10 top priorities from the Wave Report and the Executive Summary of the Health Information Strategy New Zealand at Appendix 2 as background reading preparation for the presentation. The full reports are available should Board Members wish to access these: http://www.moh.govt.nz/moh.nsf/0/F34F8959738E992CCC256AF400177998/$File/TheWAVEreport.pdf and http://www.hisac.govt.nz/moh.nsf/Files/healthinformationstrategy/$file/healthinformationstrategy.pdf

6 KIWISAVER

Staff are currently being consulted to obtain their views regarding appointment of a KiwiSaver default provider should staff not chose their own provider. The question being put to staff is:

Should your employer negotiate with one of the six “default” KiwiSaver providers to provide a KiwiSaver scheme if you choose to join KiwiSaver but do not choose your own scheme provider?

Results of this consultation will be tabled at the October Board meeting. At the time of writing this report, 88% of the 402 respondents had voted “yes”.

7 DHBNZ – ANNUAL PLAN

The 2007/08 DHBNZ Annual Plan has now been finalised. This is attached as Appendix 3.

Brian Rousseau CEO 26 September 2007

Appendix 1

Southern Alliance Update

Board Meeting Date: 4 October 2007 – Otago DHB 11 October 2007 – Southland DHB

Report Prepared by: Christine Miller, Director Regional Development – Southern Alliance

Date Prepared: 21 September 2007 Recommendation: That Southland DHB and Otago DHB note the content of the report. 1. Regional Executive Management Team

On 14 September 2007 a Regional Executive Management Team (REMT) workshop was held in Invercargill. The purpose of the workshop was to review the draft Information Systems (IS) strategy document and IS team proposal. It is anticipated that the draft document and proposed team structure changes will be released for consultation by end of September. Regional Clinical Service planning is the dominant topic for REMT with a half day workshop planned in the near future to talk through strategy, challenges, options and structure. This discussion is timely as it fits within the context of all regional clinical thinking and planning that is occurring within New Zealand at this time i.e. each of the four DHB regions along with the Ministry of Health are undertaking similar activity. The Planning and Funding review process is now complete and a team building and work stream allocation review was held in mid September. There is a need to fill some residual vacancies and this work is underway at present. 2. Southern Alliance Communications There have been no further staff updates on Southern Alliance since the last report. 3. Southern Alliance Consolidation Phase Update The consolidation phase for Southern Alliance over the next twelve months also requires several other work stream activities to ensure the success of the virtual entity. The update on work stream activity is: Current

1. Southern Alliance Foundation Document – Recommended amendment to draft document from Otago DHB accepted by Southland DHB at the September board meeting. The Foundation Agreement has now been

ODHB and SDHB Board Meeting, 4 and 11 October 2007 Southern Alliance Update

supported by Otago and Southland DHB for sign off by the signatories at the next opportune time.

2. Southern Alliance Communication Plan – In consolidation phase through

discussion with REMT members to define detailed work plan. Next iteration due to November REMT meeting.

3. Key DHB Policies – Delegations of Authority, Integrity (Probity) Policy –

Agreement reached at June 2007 REMT meeting that overall DHB Policy Framework is to be advanced with work to be completed on key policies in first instance through Human Resources (HR) first draft due in November 2007. Revised Delegation of Authority Policy to Ministry of Health for sign off.

4. DHB Statutory Committee Options – Combined Otago and Southland DHB

workshop held on Friday 7 September with a further meeting to be held on 21 September to finalise a proposal to go to both boards for consideration at the October meetings.

5. Southern Alliance Clinical Service Framework – REMT workshop planned for

a date yet to be confirmed to progress thinking on strategy, structures and relationships.

6. REMT Terms of Reference - ratified at June 2007 REMT meeting.

Planned

7. Southern Alliance Prioritisation Process and Regional Work Plan – Draft process was distributed to REMT for consideration in September. This work is linked to the Clinical Service Framework and the DAP preparation cycle.

8. Southern Alliance projects – to be agreed.

ODHB and SDHB Board Meeting, 4 and 11 October 2007 Southern Alliance Update