New Auckland Health Board boss spoiling for a fight

By MARTIN JOHNSTON

One day before the old Auckland District Health Board went out of existence, it socked its successors with a $16 million deal to build a new psychiatric unit.

Chairman Wayne Brown calls this "yet another example of the freaky decisions" compounding his board's problems in resolving its multimillion-dollar funding fiasco.

"As it turns out, we need that money," Mr Brown says. "We could have delayed it, but that's not an option now.

"If they had done it six or eight months before, fine. But if it's drifted into the night before, it's basically bad ethics."

Past chairman Richard Waddel is adamant the 58-bed Conolly Unit needs urgent replacement. Design flaws and poor sight lines for monitoring patients pose serious safety risks.

"The longer we delayed it, the more we put ourselves at risk," Mr Waddel says.

That's not the issue, counters Mr Brown. "Somebody previously went through a review, hired architects, got prices, discussed the staff they wanted, put this thing up and nine years later it's no good.

"Did these processes and reviews that produced a nine-year wonder ... How do I know that those still aren't our processes?" he snorts.

Mr Brown's decision to break ranks with the old-boy network and pot his predecessors is a foretaste of what is to come as his board struggles to bring a forecast $72 million deficit under control.

The Government has said it will not cover any current losses above $65 million.

But it has also tied the board's hands through its decision to cut the "tertiary adjuster" - a top-up payment for boards that, like Auckland, provide highly specialised services for all New Zealanders.

These services include high-profile liver and heart transplants, cancer treatment and a children's intensive care unit.

For the year to last June, the former Auckland Healthcare had its top-up payment cut from $48 million to $40 million. But while the costs of tertiary services have subsequently risen, the Government has kept the squeeze on in this financial year by refusing to increase the $40 million top-up for the new Auckland District Health Board.

On top of the Government's money squeeze, the Auckland board faces other complex pressures, particularly as the Government grapples with the extent to which tertiary top-ups should be phased back as it moves to reintroduce population funding on July 1 next year.

Matching the size of board budgets to population numbers is an especially complex task for the Auckland board, where only 45 per cent of spending at the Green Lane, National Women's, Auckland and Starship hospitals is on services for patients from within its own catchment area - Auckland City.

Forty-six per cent of the budget is being swallowed up by patients from the two other Auckland regional boards, Waitemata and Counties Manukau, and Northland.

Nine per cent is devoted to accommodating the cost of treating patients from the rest of New Zealand - equivalent to a hospital serving a town such as Rotorua. These patients are the sickest, most complex and most expensive to treat.

The Auckland board's chief executive, Graeme Edmond, and Mr Waddel have been to the wire on this issue before with Government budget-cutters, with limited success.

But the hard-nosed new chairman says too much has been made of the cuts to the tertiary top-up.

"There is a great deal of myth over this," says Mr Brown. "A lot of it is inter-regional flows within greater Auckland. I accept that Auckland Hospital does do the very complex things and it does appear those aren't sufficiently rewarded. There are definitely problems.

"But it doesn't look like a $70 million problem - it looks like a component of that."

Board member Charles Lowndes says the issue comes down to serious Government underfunding. Auckland is not getting its fair share for the specialised services it provides to patients from all over the country.

But Mr Brown suggests the real issue is Auckland Hospital's lack of basic computer systems. If the board wants more Government money, it needs to prove how much it spends.

He was shocked to find the biggest hospital board did not even have systems used in Invercargill to measure patient costs and achieve the information needed to make savings.

"We can't say how much we spend a month on you ... we can't tell you how much the department you went into spends.

"I would have thought we might do something about it before building buildings."

Mr Edmond says the board does have good information on some costs, such as kidney transplants, and he is working on improving access to cost information.

nzherald.co.nz/hospitals