Hospital rationing, cuts loom in battle to meet budget

By MARTIN JOHNSTON and FRAN O'SULLIVAN

Patients at Auckland's biggest hospitals face cuts to services and the prospect of rationing if health chiefs fail in their struggle to control soaring costs.

The Government has told the Auckland District Health Board, which fears its $72 million deficit may go even higher, to pull itself out of the red within three years.

The cabinet insists the board must live within its means.

A Herald investigation of the board has revealed that a five-year strategic plan, due out in a week, will canvass public opinion on any "re-prioritisation" - effectively further rationing - of the board's services.

The squeeze on taxpayer money to meet the ever-growing demand for health services has forced the board to evaluate what services it will continue to provide, especially how it balances basic community treatment for under-privileged groups with high-tech hospital care.

Chief executive Graeme Edmond says: "[New Zealanders] have to consider are we big enough and rich enough to say we can afford international excellence standards of services - First World - or are we, dare I say it, Second World.

"I'm not saying Third World ... By and large New Zealanders get a pretty good service."

Because 56 per cent of his hospitals' patients come from outside Auckland City - including 9 per cent from Waikato to Invercargill - he is calling for a national debate.

Health Minister Annette King yesterday refused to comment on what impact this controversy would have on the Labour-Alliance Government in election year.

The investigation has found:

* The $40 million annual savings that the board predicted from its super-hospital construction and integration plan are, in fact, only $15 million.

* Job cuts are likely to be in the hundreds to achieve most of the savings.

* The plan for cutting these jobs and introducing other efficiencies is a year behind schedule. It has to be completed by June next year in preparation for "opening day" of the new hospital at Grafton the following October.

* The board has not invested in computer technology considered crucial to learning how much it costs to treat individual patients.

* The previous board, on its last day in office, locked its successor into a $16 million replacement for the Conolly unit, a mental health facility near Auckland Hospital.

Doctors predict compromised patient safety if a standalone children's heart unit and expanded intensive care unit are not built at Starship hospital, and if the job cuts are rammed through with the integration of National Women's, Green Lane and Auckland Hospitals at the super-hospital.

The cuts are aimed at middle management and administration, but include many people in managerial-clinical jobs. Many doctors and nurses fear these people will leave when their jobs are downgraded with the loss of the clinical component.

The board's strategic plan is expected to hammer home its financial crisis and its commitment, under new chairman Wayne Brown, to live within its means rather than endlessly pleading for more money.

But this will entail trade-offs between the highly specialised services, and primary care for groups such as Maori and Pacific Islands children in poorer suburbs like Glen Innes.

The board's top-up for so-called "tertiary" services, such as organ transplants and children's cancer treatment, was cut in 2000 from $48 million to $40 million and there may be further reductions with the switch back to population-based funding due in July next year.

A senior board source said New Zealand could not afford everything medical science offered.

"An example is that we spend large amounts for people in the last year of their life. I don't think a health board can say, 'We won't provide hip replacements to people over the age of 85', but a properly informed public could."

Mr Brown played down the risk of service cuts, saying "they may come only if we don't get the best out of all these other things" - such as the job cuts and integration of hospitals.

But Mr Edmond said projections suggested these were not enough.

"Therefore we are signalling that we may have to consider service re-prioritisation."

Mrs King welcomed the re-evaluation. "Maybe they need to look at some of the things they do that are not high-tech and specialised but are things that could be done by other health boards, giving them the opportunity to do other things."

nzherald.co.nz/hospitals