Northland health trust behind Rāwene Hospital faces financial crunch

The trust running health services in the Far North’s Hokianga is undergoing an internal financial review to ensure it remains viable after a $5 million fall in financial position over two years.

The Hauora Hokianga Trust, formerly the Hokianga Health Enterprise Trust, runs Rāwene Hospital and 10 primary health clinics. It also runs elderly rest home and hospital-level care, and services such as traditional Māori rongoā.

After posting a $2.3m loss in the year to June 30, 2025, the trust board engaged independent accountants BDO to develop a strategic financial plan.

It also hired a contractor to develop a five-year strategic plan, with both reports due at a board meeting later this month.

The 2025 deficit, covered by reserve funding, followed a net loss of $349,000 in the year to June 2024 and was a stark turnaround from a $2.8m profit in the year to June 2023.

Chief executive Margareth Broodkoorn said it was a financially challenging time and the trust asked Health New Zealand Te Whatu Ora to provide financial stability.

Health NZ said it was working with the trust to identify its financial challenges.

Hauora Hokianga wanted to maintain its clinical services and level of care, including free doctor or nurse visits and free prescriptions for enrolled patients, Broodkoorn said.

Hokianga had a spread population with high deprivation, including a survey showing only 34% of respondents were employed.

“We have a growing and ageing population, a high Māori population and remote, rural population with increasingly high health needs,“ Broodkoorn said.

Wait times to see a doctor, nurse practitioner or nurse were already increasing due to unmet need, she said.

Broodkoorn said there had been huge changes in health since 2023 that led to the trust’s financial challenges, including the end of Covid-specific contracts and deferred maintenance from lockdowns.

In August 2022, after-hours services at Rāwene Hospital were cut because of a lack of doctors amid an international workforce shortage.

But the trust since hired more clinicians, restarting 24-hour care about 10 months ago, with telehealth used if a doctor is unavailable on-call, Broodkoorn said.

As a result, staffing costs rose by $2.6m: the single largest factor affecting the 2025 financial result.

Other costs included nightly security guards at the hospital after an assault in May 2023 and the installation of solar and Starlink at clinics after Cyclone Gabrielle, she said.

The board did a number of things to improve financial sustainability, including reducing supplier costs with new contracts, Broodkoorn said.

A “reluctant” organisational restructure in October 2025 resulted in eight fewer fulltime-equivalent positions.

Unions representing staff were told there was no money for pay rises, although Broodkoorn hoped that could change once the strategic financial plan was developed.

She defended how long it had taken Hauora Hokianga to do its strategic reviews, saying action started about 18 months ago.

“The key thing is that it’s taken a while because we haven’t got the answers or response from Te Whatu Ora that the board would like to have.”

Health NZ was approached for help due to historical underfunding, including some contracts that did not cover full salary costs, she said.

Hauora Hokianga was not the only health organisation struggling with costs, Broodkoorn said.

For instance, Ōamaru Hospital was run by a Waitaki District Council-run trust but was transferred to Health NZ in June 2024 after several challenges.

Health NZ-run Dargaville Hospital also struggled with a lack of doctors overnight, while Northland general practices had also faced financial difficulties.

Health NZ is working with Hauora Hokianga to “identify and understand its financial sustainability challenges”, said Danny Wu, northern region planning, funding and outcomes director.

The ongoing sustainability of health services in Hokianga was a key consideration, he said.

Denise Piper is a news reporter for the Northern Advocate, focusing on health and business. She has more than 20 years in journalism and is passionate about covering stories that make a difference.