Reining in health spending

On the face of it, some of Health New Zealand Te Whatu Ora’s directives to reduce an end-of-year budget blow-out might sound fair enough.

If all parts of the public service are having to manage what HNZ called "significant cost pressures in what is a challenging economic environment", why should health be any different?

HNZ chief executive Margie Apa
HNZ chief executive Margie Apa
HNZ chief executive Margie Apa has been keen to describe the directives outlined in a letter to health unions as guidance to managers, although curiously the words guidance or guidelines do not feature in the letter.

The letter says HNZ cannot end the financial year in deficit.

Covid-19 had a major impact across the health system, but time has moved on and "we need to return to business-as-usual practices".

"We must live within our means as we deliver health services to New Zealanders."

Nobody would expect unnecessary spending to go unchecked, but when we are aware of doctor shortages in almost every specialty, along with plenty of nursing vacancies, several of the directives specified in the letter are jarring.

Business as usual in the pre-Covid days of district health boards involved many boards, including Southern, struggling with multimillion-dollar deficits and staff shortages year after year.

Prime Minister Christopher Luxon has said the government wants more "medical doctors, not more spin doctors".

It was a nice soundbite, but does it fit with HNZ’s plans for "actively managing personnel costs" specified in the letter?

Doctors and dentists working in hospitals are taking strike action on Tuesday over pay. Photo:...
Photo: Getty Images
Among them is a call to review unfilled roles, other than those being recruited as part of confirmed new structures, and consider permanent removal of these as part of the budget processes.

The Association of Salaried Medical Specialists’ executive director, Sarah Dalton, says her organisation is starting to hear there are vacancies that have been approved to be filled now being delayed or not filled, sometimes when it was known there were appropriate candidates available.

Labour’s health spokeswoman, Dr Ayesha Verrall, has pointed out that some medical specialist roles are hard to fill and recruitment could take a long time. Just because they had not been filled for some time was not a justification for removing them.

Association of Salaried Medical Specialists executive director Sarah Dalton
Association of Salaried Medical Specialists executive director Sarah Dalton
Among the directives are a stop to double shifts, and ensuring staff take meal breaks to avoid extra payments being triggered. From a safety and personal wellbeing perspective, nobody would support double shifts and workers not taking meal breaks, but these behaviours are the result of short-staffing.

Similarly, the reason some staff may have high amounts of annual leave owing, which will be a huge liability sitting on the books (as it was in the DHB days), is likely to be because they feel obliged to keep going. If they take much time off, they know it will put more pressure on their team.

Despite the hoopla over the net extra 2493 nursing full-time-equivalent roles showing up in the workforce data for the last calendar year, there is still a long way to go before nursing has its full complement of staff.

The move to a central authority and the impact of Covid-19 have merely written large issues which may have previously received attention regionally but not necessarily nationally. Now, it is easier to join the dots and there is nowhere to hide all of the poor planning and underfunding which has blighted the health system for decades.

This week the junior doctors’ union, the New Zealand Resident Doctors’ Association, unhappy with a pay offer, gave notice of a 24-hour strike on May 7. The association has raised concerns about the unevenness of the offer, which would give substantial pay increases to some of its members but not all.

As we edge closer to the Budget at the end of next month, it shows there is still no shortage of concerning health issues hogging the headlines. It remains to be seen if any rabbits can be pulled out of the Budget hat to change that.