Capital Investment Committee Update

The Capital Investment Committee makes recommendations to the National Health Board, Director-General and Ministers of Health and Finance on DHB capital proposals. 

Late last year we issued new guidelines for capital approvals for DHB development.  A number of proposals to be assessed under the guidelines were received by the beginning of February around the time the Christchurch earthquake struck.

The earthquake caused uncertainty around whether substantial emergency capital investment would be required to keep the Christchurch health system functioning and, as a result, the capital round for 2011 was suspended.

To help the Canterbury health system, the Ministers of Health and Finance approved a Capital Investment Committee recommendation to approve and fund a $16m project to bring general medicine patients back to Christchurch hospital.  Since February, these general medicine patients have been split between Christchurch and the Princess Margaret hospitals.  We undertook to fast track the approval, meaning the new arrangements will be in place by winter 2012.

Canterbury DHB has also been carrying out detailed invasive seismic investigations of all its buildings.  As a result of the investigations we are ready to consider any emergency capital proposals (not covered by insurance) at short notice.

As well our Committee considered a number of business cases which were in the pipeline including:

Other DHBs that had submitted proposals for the 2011 capital round have been very understanding of the extraordinary circumstances which forced the suspension of this year's capital round.  These 2011 proposals, along with any other new proposals, will be considered as part of the 2012 capital round.  We need new proposals to be submitted to us by 31 January 2012.

Our new capital guidelines are focussed much more on DHBs showing they are implementing innovative models of care which will reduce the need for capital investment. This avoids a situation where DHBs find themselves making a substantial capital investment, incurring increased interest and depreciation costs, where in turn they would have to reduce spending on other services to meet the increased costs.

The Capital Investment Committee is putting emphasis on ensuring new models of care have been appropriately explored, and that any proposed models are credible and achievable.

Our guidelines put considerable emphasis on a regional approach to capital.  What we expect for the four DHB regions (Northern, Midland, Central and South Island) is to look at their capital plans over their region for the next decade, and prioritise them based on affordability.  We have met the Chairs and CEOs of two regions to discuss these expectations and will meet with the other two regions over the next few months.

The Committee's other emphasis is to explore capacity options in the private sector.  It may be that private hospitals and other providers have spare capacity, or could develop more for public services, thereby reducing capital needs.  When capital proposals are considered, we will explore these options with private providers and DHBs.  We also expect to see private funding options have been considered.

Sally Webb, Acting Chair

Capital Investment Committee