The Government has appointed a medical entrepreneur who was at the heart of National's 1990s health restructuring to head the troubled Waitemata District Health Board.

Lester Levy takes over as chairman tomorrow.

He replaces Kay McKelvie, who, when she resigned in February, said the Ministry of Health had returned to its practice of not giving Waitemata its fair share of taxpayers' money.

She predicted a $35 million deficit would arise from under-funding for population growth and for buying complex health-care for Waitemata patients from the Auckland health board.

Waitemata is also preparing to build a replacement emergency department and new wards at North Shore Hospital.

These are its next steps in dealing with the overcrowding which was the subject of a damning report last month by Health and Disability Commissioner Ron Paterson.

Asked if he was worried by what he was taking over, Dr Levy said yesterday that money had always been an issue in public health.

"I have found that a constant battle over how much money you should have can render an organisation quite powerless.

"One needs to work with what you've got and advocate strongly for what you need, but if all your energy is taken up in advocating for what you need, you might not get the best done with what you have."

This comment echoes the commissioner's findings.

The appointment of South African-born Dr Levy, 54, marks his return to public health after more than 10 years as a private hospital entrepreneur and leadership specialist.

He is adjunct professor of leadership at Auckland University's business school and heads a university-linked leadership research and development trust.

From 1993 to 1997 he was chief executive of South Auckland Health, a Crown Health Enterprise in the National Government's experiment to convert the public health sector to a commercial model.

He turned projected deficits into profits and took out private-sector loans - a practice halted by the previous, Labour-led Government - to begin a building programme that is still going on.

In the private sector, he was a founder and chief executive of Auckland's private Ascot Hospital, undertook its merger with Mercy Hospital and had roles in the associated companies. He has quit all positions in the group before starting his new job.

He was chairman of film and television company Communicado, and ran the state-owned NZ Blood Service.

Health Minister Tony Ryall said Dr Levy "brings to the board his capacity to deal with the most complex challenges".