$900,000 lifeline to save health services | Manawatu-Wanganui News | Local News in Manawatu-Wanganui

Taihape's financially ailing health service has been thrown a desperately needed lifeline by the Whanganui District Health Board.

The bailout - including a support package worth close to $500,000 as well as writing off rent arrears totalling another $400,000 - was given the board's tick on Friday.

But while it will be welcome news for Otaihape Health Services Ltd and the community, the board has made it plain there are strings attached. The board went into committee to discuss the rescue package and released a statement after the meeting.

Kate Joblin, WDHB chairwoman, said the board was unanimous in its decision to help Otaihape Health but was under no illusions about the extra pressure this would put on the board's own financial state.

"The priority for the board has always been to retain the services in the district and we have decided to accept the financial recovery plan, but with conditions," Mrs Joblin said.

She said the funding package was conditional on Otaihape Health continuing to reduce its costs and developing a flexible staffing arrangement to maximise efficiencies.

"Otaihape need to deal to some of their costs, particularly in the aged care service, because our board is still not satisfied they benchmark well with similar services across New Zealand and may not be financially viable into the future.

"We'll be monitoring improvement very closely and continuing funding will be dependent upon progress against these conditions."

WDHB will also be providing "in kind" support for Otaihape Health with nursing leadership and development and has agreed to write off rent arrears in excess of $400,000.

Otaihape Health is facing a budget deficit of $500,000 for the 2010-11 year and wages were a major component of that.

Martin Hefford, a consultant brought in by the WDHB to look at the problems, said the town's health service was faced with three options - continue the status quo, agree to a cost and funding restructure with the WDHB and staff, or quit the service altogether.

A series of public meetings made it clear the community did not want to see its health service compromised.

Mrs Joblin said the board appreciated the extent of the community interest.