District health boards have less ability to withdraw from unpopular savings programmes, such as the hospital food outsourcing not yet adopted by many boards, under the new organisation set up to cut costs, a Cabinet paper released under the Official Information Act shows.
Released by Health Minister Dr Jonathan Coleman, the paper says Health Benefits Ltd was wound up after losing ''credibility''.
It has been replaced by a DHB-owned organisation called NZ Health Partnerships.
Under it, DHBs cannot withdraw from programmes unless ''there is no material impact on the national good''.
DHBs signed an agreement to form NZ Health Partnerships which lays out these terms.
Many DHBs have not signed up to the controversial 15-year food contract with Compass - and that will hurt promised savings unless they are brought in, the paper says.
HBL had lacked decision-making rights and had ''variable relationships with individual DHBs''.
''I will be instructing the ministry to take an active role in monitoring, and closely managing any DHBs that act inconsistently with the [new] agreement.''
''I will also retain the prerogative to direct DHBs ... if a deadlock over shared services occurs or to address DHBs unreasonably vetoing a shared service solution by the new company.''
Delays with HBL's programmes created budget problems for boards, forcing them to make cuts in other areas, the paper reveals.
''Delays in progressing business cases puts pressure on DHBs realising savings, and forces them to make efficiencies elsewhere in order to keep to their annual budgets, for which we hold them accountable.''
The delays caused DHBs to question the benefits of HBL, the paper says.
''HBL had significant difficulties in getting its business cases approved quickly by DHBs and ... this has led to additional costs, delays in savings and a loss of credibility for HBL.
''Ensuring that DHBs work together on shared services for the benefit of the national good has previously been challenging.''
Promised savings from four major business cases had been overestimated by HBL, at $759million over 10 to 15 years.
Now reassessed, the food, laundry, finance, and infrastructure programmes were expected to save $302million to $409million, the paper says.
Comment from Treasury and the State Services Commission is included in the paper.
The entities said making savings would continue to be difficult, partly because the benefits were ''unequally distributed''.
The Southern DHB is one of five boards signed up to the Compass food deal.
The other 15 DHBs either voted against it, or it has not yet been put before their board members.
There are also issues and delays with other programmes.
Last month, the Otago Daily Times reported the commissioner team brought in to sort out the Southern District Health Board was having trouble pinning down the deficit.
The board's financial reporting systems were found to be run down, which had stemmed from HBL's issues.
HBL was wound up at the end of June, when the new organisation took effect.
