By JAMES GARDINER and MARTIN JOHNSTON
Scrapping the Health Funding Authority may cost the new Government $6.4 million in redundancy payments alone.
Labour and the Alliance intend to shift the authority's work into a new division of the Ministry of Health.
The authority's 408 staff, who each earn an average of $5200 a month, have three months' redundancy pay written into their employment contracts, says the authority's communications general manager, Rob Eaddy.
But he expected most would be re-employed in any replacement structure, as Labour's policy was to keep the funder-provider split in health.
"We have here unique skills - for contract management, implementation in the service policy - that the ministry doesn't have."
Mr Eaddy assumed that some jobs at the ministry might go, as it would lose its role of monitoring the funding authority.
A Labour Party official said the new Government would minimise restructuring costs and was committed to "evolution rather than revolution" in health.
The redundancy costs in changing from regional health authorities to the single organisation created last year were $3.7 million, he said.
Labour's health spokeswoman, Annette King, declined to comment.
The authority, which costs taxpayers about $100 million a year to run, spends more than $6 billion annually buying health services for the Government.
It angered Opposition politicians in April by buying $1000 American chairs for staff as part of office amalgamation and renovation plans projected to cost $7.5 million.
Health sector leaders are divided over scrapping the authority but united in a desire for any changes to be smooth.
Dwayne Crombie, chief executive of the Waitemata Health public hospital company and a former authority senior manager, said he had repeatedly got "the run-around" from Government health officials, causing planning delays.
He put it down to the existence of three competing agencies - the authority, the ministry and the Crown Company Monitoring Advisory Unit.
Labour plans to shift the unit's health auditing role to the ministry.
Graeme Edmond, chief executive of the Auckland Healthcare public hospital company, said the only savings from abolishing the funding authority would be the pay and other costs of its board as the work still needed to be done.
The executive director of the Association of Salaried Medical Specialists, Ian Powell, said New Zealand was too small to justify two central Government bureaucracies in health. Having only one would make health policy more coherent as the ministry and authority sometimes veered in different directions.
The chairwoman of the Medical Association, Dr Pippa MacKay, said it was concerned about the potential loss of "institutional memory," as happened when the regional authorities were replaced.
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