Health Report: Broken Promises and Privatisation

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ATTENTION: HEALTH REPORTER

MEDIA STATEMENT FOR IMMEDIATE RELEASE,
SUNDAY 16 AUGUST 2009

“Health Report: Fuddle, Muddle, Broken Election Promises And Privatisation”

“The report to the Minister of Health released today promises a mix of fuddle, muddle and disguised potential privatisation,” said Mr Ian Powell, Executive Director of the Association of Salaried Medical Specialists, today. Mr Powell was responding to the report of the Ministerial Review Group led by banker, Business Roundtable member and former Treasury head Murray Horn.

“The report is sugar coated with generally useful comments about clinical leadership, clinical networks, regional service collaboration, national procurement, and quality. But these important issues are denigrated because they serve as a velvet glove to hide the iron fist of radical restructuring. If the government was to accept the recommended restructuring it would involve breaking two election promises, generating de-stabilisation and uncertainty that risks distracting it from achieving its health policy objectives, and stimulating moves towards privatisation.”

First Election Promise

“The first election promise to be broken if the report’s recommendation was to be accepted is the government’s commitment not to restructure the health system. The gutting of the Health Ministry and creation of a new bureaucracy, the National Health Board, would be major restructuring that will also affect how district health boards function. In part, it is a return to the 1990s by recreating in a different guise the Health Funding Authority. New Zealand then had two central health bureaucracies which in effect were fiefdoms wastefully competed against each other.”

“This and other fragmentation of health bureaucracy will not only affect the quality and coherence of decision-making at a national level but will also impact on the effectiveness of the work of district health boards. This new second bureaucracy will have greater powers than the old Health Funding Authority. As well as funding them, it will be able to monitor, oversee and dictate to DHBs.”

“Not only will the new national health board have more power than the current Health Ministry, it will have much less accountability. By being established as a crown entity rather than a public service organisation, it would be an arms length distance from government and much more able to do what it likes without effective scrutiny and accountability. The report acknowledges that this new bureaucracy should not be influenced by outside organisations, which, by implication, includes organisations of doctors and nurses. It has the feel of a Stalinist monolith about it.”

“What is also disingenuous is the report’s view that legislative change is not required to create the new National Health Board. In a politically sneaky move the report instead recommends that the existing Crown Health Finance Agency be converted into the new bureaucracy. But the two organisations are chalk and cheese. The Crown Health Finance Agency has a very limited role around DHB debt management employing around 20 people. The proposed National Health Board would be employing several hundred people for the enormously larger responsibility of funding and running the 21 DHBs. It is difficult to envisage a crasser attempt to avoid parliamentary scrutiny.”

“It is misleading to allege that the report is only recommending minor restructuring. This is major affecting both national and local decision-making.”

Second Election Promise

“The second election promise that would be broken if the report’s recommended restructuring was adopted is the government’s commitment to reduce bureaucracy. It is bananas to suggest, as the report does, that creating more bureaucracy reduces bureaucracy. What savings are made by cutting the Health Ministry most likely will be lost by the need to resource the powerful new national health board, along with the other plethora of new bureaucracies recommended including for quality monitoring, clinical workforce development, and shared services. Each of these will require separate ‘back office’ functions and will risk duplication. John Cleese would have fun with this.”

“There will also be increased time wastage as these new bureaucracies interact with each other, particularly the national health board with the Health Ministry. Fragmentation of structures invariably increases bureaucratic wastage in a sea of bureaucratic fiefdoms.”

“The report recommends cutting several advisory committees but selectively downplays the likelihood that its new powerful bureaucracy (national health board) will require subsidiary companies which can be more costly than committees.”

Privatisation threat

“Increased privatisation is a real threat of this report. Becoming a separate less accountable crown entity will make the National Health Board more able to privatise. This is signaled in the report with the section on laboratory and radiology services. Laboratories alone affect around 70% of what happens in public hospitals”

“The government will be creating a rod for its own back if it runs with the radical restructuring in the report. Much of the useful other recommendations in the report could be implemented without restructuring by instead fine-tuning and giving more authority to existing structures.”

“If adopted, the recommended restructuring will distract from the achievement of the government’s health objectives. Does the government really want to be in the position at the next election of having to explain this to the public” concluded Mr Powell?

ENDS

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