Gordon Campbell on the reasons for Southern DHB’s problems

Once again in our health system, making the books look healthy seems more important than ensuring the patients are healthy. The fact that people pay taxes so that they can get the healthcare they want (when they need it) appears to be completely irrelevant to our busy bureaucrats on the go. Kathryn Grant for instance, the incoming Commissioner appointed to replace the sacked board of Southern DHB, has already made it clear that she will not be guided by “public sentiment” in her efforts to get the books at the beleaguered DHB back in order.

Major cuts in services seem inevitable – with the ODT indicating this morning for instance, that the neurosurgery service that the public rallied to save five years ago is once again in the firing line. Increasingly, the people of Dunedin and the heartland beyond will have to access their major health services from Christchurch – or go without, since the ageing population of Otago/Southland will probably find repeated travel to access treatment will be impractical, unaffordable and (in some situations) downright dangerous.

This does not let the sacked board entirely off the hook for its management of the DHB’s finances, which are heading for a deficit north of $30 million. However, it also true that the disproportionately older age structure of Southern DHB’s dispersed population adds costs in healthcare provision that are simply not captured by the population based funding formula. As the ODT reports:

Elected member Neville Cook, of Invercargill, said the South was chronically under-funded through the population funding formula.

A confidential report on Southern DHB carried out by Nelson-Marlborough DHB chief executive Chris Fleming has identified failings in financial management. Whether these failings outweigh the problems caused by chronic government underfunding is debatable. According to sacked board member Richard Thomson – now re-appointed as a deputy commissioner to Grant – some of the difficulties at Southern DHB have been exacerbated by the loss of financial advisors during previous cost-saving rounds. The drive for ‘efficiency’, Thomson suggested, had ended up damaging the DHB.

The claim by Health Minister Jonathan Coleman that other DHBs are performing within the current funding constraints is simply not correct. Other DHBs are in trouble. This week, Hutt Valley DHB braced itself for its worst deficit in five years.

A senior hospital source approached us last week expressing concern about how the budget had blown out. The likely deficit at the end of the financial year could be as high as $7 million to $10 million, the person said.

The problems at Hutt Valley DHB indicate the stark choices facing management: to either spend money on essential staff and watch your budget blow out, or to casualise the healthcare services at greater risk to patients.

Staffing levels for the 2014/15 year had increased beyond what had been budgeted.[according to board chairwoman Virginia Hope.] “We certainly have in some areas increased our staffing and that is because it is safer for patients to have care that is provided by a full complement of staff rather than for us to use too many casuals.”

The options are not pretty, and the immediate ‘solutions’ may not work:

“It would be pre-emptive to say anything [about staffing] until we’re clear about how we’re going to provide services,” Hope said…..” We know there are opportunities, for example, for us to intervene earlier in the Hutt Valley, in particular so that people don’t feel the need to come to hospital with conditions that may not need emergency department or hospital treatment.”

Providing patient care at earlier stages could “have a small influence” on staffing requirements. She said it was “extremely unlikely” there would be any reduction in elective surgeries in the Hutt Valley as a result of the board’s deteriorating finances.

There are other examples. Reportedly Wairarapa DHB is looking at a $2.7 million deficit (and growing) while the deficit at Capital & Coast DHB was $5 million last year.

True, some of the reporting and accounting practices at Southern DHB have been sub-standard. The more substantial problem is that – even if its management had been exemplary, or even just par for the DHB course – this DHB was really in a no-win situation, where the available funding was inadequate to maintain its core services and to meet profile of patient needs. Around the country, the blame for such shortfalls should be being sheeted home to a government whose funding for health – as a proportion of GDP – has been cut substantially since 2010.

In the process, the token extra amount to be shared among the country’s DHBs in this year’s Budget ($15 million each on average) is not enough to maintain current services, let only to enable the growing health needs within an ageing population to be met by the hiring of specialist staff, and by the purchase of new technology and improved medicines.

In that respect, the recent failures of Capital & Coast’s MRI scanner exemplify the shonky state of disrepair into which New Zealand health system as a whole is being allowed to fall. Compared to that scandal, the problems at Southern DHB are a mere sideshow.

Health, the band

Given the circumstances outlined above, “Stonefist” is a pretty apt title for the lead single from Health’s first album in about five years.

Personally, I prefer the noisier prior incarnation of the band on tracks like “Die Slow…”

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