It was, and a very expensive one.
Like many other Labour policies, high costs went on back room increases with no improvement in frontline services.
That has to change:
In response to serious concerns around oversight, overspend and a significant deterioration in financial outlook, the Board of Health New Zealand will be replaced with a Commissioner, Health Minister Dr Shane Reti announced today.
“The previous government’s botched health reforms have created significant financial challenges at Health NZ that, without urgent action, will lead to an estimated deficit of $1.4 billion by the end of 2024/25 – despite this Government’s record investment in health of $16.68 billion in this year’s Budget,” Dr Reti says.
“Health NZ first reported a deteriorating financial position to me in March 2024, despite earlier repeated assurances by the organisation that it was on target to make savings in 2023/24.
“In the months since, the situation has worsened. Health NZ is currently overspending at the rate of approximately $130 million a month.
That $130 million is desperately needed for services.
“That’s why today I am announcing the appointment of Professor Lester Levy, the recently appointed Chair of Health NZ, as Commissioner for a 12-month term. This is the strongest ministerial intervention available under the Pae Ora Act and not a decision I have taken lightly, however the magnitude of the issue requires such action.
“The issues at Health NZ stem from the previous government’s mismanaged health reforms, which resulted in an overly centralised operating model, limited oversight of financial and non-financial performance, and fragmented administrative data systems which were unable to identify risks until it was too late.
“Professor Levy is tasked with implementing a turnaround plan with a savings objective of approximately $1.4 billion to ensure financial balance, and actions to strengthen governance and management.
“Operational responsibility for the turnaround plan will sit with the Commissioner, however I have made it clear that it should focus on cost efficiencies in areas such as any back-office bureaucracy which has blown out, particularly in middle management, as a result of the previous government’s damaging reforms.
“As one example between March 2018 and March 2024, back-office staff numbers which formerly sat at district health board level grew by around 2,500.
At the same time the frontline was understaffed leaving health professionals overworked and underpaid.
“As a Government, we’ve made it clear that our first and foremost priority in health is improving the delivery and quality of frontline services. We have already invested very significantly in health, with $16.68 billion announced in the Budget to support frontline healthcare services.
“As Minister, I am not confident I would have adequate oversight of that spend if the existing Board structure at Health NZ were to remain in place.
“Today’s move to appoint a Commissioner is one of several steps our Government has been forced to take over the past eight months due to concerns about the governance of Health NZ and resulting performance issues, including health workforce and hospital wait times.
“Previously, I have appointed a Crown Observer, a new Chair and a Board member with financial expertise. Through those measures we have been able to identify long-standing issues with the existing governance and operating model.
“Lester Levy has assured me there will be no adverse impacts on the delivery of care in implementing a turnaround plan – rather, he and Health NZ will be seeking to bring the frontline closer to decision-making.
“Following today’s announcement, the Ministry of Health will continue its monitoring role and play a key part in reporting on the Commissioner’s performance in lifting Health NZ’s financial position, both to me and to New Zealanders.
“Today’s announcement is in no way a reflection on the work of frontline staff in our hospitals and health care facilities. As always, I thank them for their professionalism and want to reassure them that we are taking these steps to secure a better future for health in New Zealand,” says Dr Reti.
Labour’s introduction of District Health Boards more than 20 years ago was a mistake.
Its restructure and the creation of Health New Zealand was an even bigger, and more expensive, one that has delivered deficits at the expense of services and the health professionals who provide them.
Centralisation was a costly mistake, that we’re all paying for.
The high cost is not only in financial terms but in human terms for the health workforce and their patients.
Dr Levy has a Herculean task to stem the financial bleeding and divert spending from the back rooms to the frontlines and to ensure that money spent makes a positive difference for health delivery and care.
Ele Ludemann is a North Otago farmer and journalist, who blogs HERE - where this article was sourced.
3 comments:
A good start by Dr Levy would be to can all karakia and other virtue signalling nonsense that purports to embrace the Treaty, and to concentrate all and every effort on sticking purely to the knitting of providing efficent health services to all New Zealanders based on greatest need.
Levy is a bully and centralist. He's had a number of times in health and always made a hash of it e.g. Christchurch. Not the right person this time.
Seems many rushed to sign up for the new health service so they would be in on the ground floor of the pro maori revolution.Then it dawned on many what a disaster they had hooked on to. Campbell seems to have recognised before most others.
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