New Health Minister - no pressure!

New Health Minister - no pressure!

PAPER TO
AUSTRALIAN MEDICAL ASSOCIATION
INDUSTRIAL COORDINATION MEETING
CANBERRA, 16-17 APRIL 2015

Ian Powell
Executive Director
Association of Salaried Medical Specialists

NEW HEALTH MINISTER – NO PRESSURE!

Since the last Industrial Coordination Committee the environment in New Zealand has changed. This includes:

• The re-election of the previous National government, although not with as safe a majority as initially thought on election night, and now the government rocked by the loss of a safe rural seat in a by-election that was called in murky circumstances.

• The previous Health Minister Tony Ryall did not stand for re-election. His successor, Dr Jonathan Coleman (a general practitioner in a former life), is living testimony (to date at least) that sometimes a change in minister without a change of government can be as significant as a change of government, as least in the relevant portfolio. Quietly he is distancing himself from some of the positions of his predecessor without actually saying so.

• One of the most controversial decisions of the former Health Minister was to use a dormant crown agency (Health Benefits Ltd – HBL) to drive ‘back office’ (a derogatory devaluing term) support system rationalisations (many provide critical support for frontline clinical staff) in district health boards. This included a range of important areas such as procurement, finance systems and supply chains. ASMS had been open about its misgivings of the magnitude of this process but it was more the opposition of DHB chief executives expressed to the incoming Minister that led him to announce the wind down of HBL, something that would have not been contemplated by his predecessor.

• Each year the Health Minister sends each of the 20 DHBs a ‘Letter of Expectations’ for the next financial year. Previous Health Ministers (particularly Labour’s Annette King and National’s Tony Ryall) have had strong words on the importance of DHBs ensuring clinical leadership in their decision-making. As good as they were, perhaps driven by continued failures to comprehensively deliver, and while consistent with them arguably the new Minister has delivered the strongest message to date. His taking heed of strong clinical voices about a sub-regional collaboration debacle in the lower North Island (discussed below) reinforces the view that this Minister may make a significant difference. The test will be how he responds to the predicament he has inherited over an inept duplicitous attempt to contract out (thereby risking fragmenting) hospital laboratory services despite the opposition of pathologists and ‘end user’ specialists in the lower North Island (discussed further below).

• Since the last meeting the ASMS has been proactive in responding to attacks in social media by ‘hate merchants’ who troll for comments by those health professionals who, based on their experience and expertise, observe and analyse the effects of the sugary drinks, tobacco and alcohol industries, including advocating measures that cut across their profit maximisation needs.

• Ever since an excellent presentation to our Annual Conference last November by Dr Erik Monasterio (a psychiatrist) on the Trans Pacific Partnership Agreement, ASMS has been playing a more prominent role in voicing our concerns about the TPPA in respect of secrecy and risks for our health system (discussed further below).

• Last August we brought to New Zealand Professor Martin McKee, a world leading expert on health systems from the London School of Hygiene and Tropical Medicine. This week we are bringing him back by co-sponsoring with Waitemata DHB for a series of presentations. ASMS has also organised additional presentations in the Northland and MidCentral DHBs.

• ASMS also negotiates collective agreements (16) for senior doctors in non-government organisations. The newest and most novel is a collective agreement covering salaried general practitioners employed at Golden Bay (top northwest of South Island) by a Primary Health Organisation. PHOs are non-statutory bodies that DHBs are expected to have for the funding and provision of primary care. With one exception, all DHBs have PHOs (usually 1-3 each) but Golden Bay is the only PHO we are aware of that directly employs GPs.

• ASMS is in the process of further strengthening our capacity in two main areas – industrial and policy. This reflects a range of factors including our increasing membership numbers and expectations of the organisation, as well as the increasingly hardline industrial relations positions adopted by a number of DHBs, and the increasing National Executive interest in extending the role of the union (or in some instances, drilling deeper). We have started developing a career structure within our industrial team, first by re-designating one of our industrial officers as a ‘senior industrial officer’ (one of two) and secondly, by establishing a new industrial officer position. This will mean a six person industrial team comprising the Deputy Executive Director, two senior industrial officers and three industrial officers. Further, we are also establishing a new policy analyst position to work alongside our half-time researcher.

• Recognising that humour can be one of the most effective tools in one’s arsenal and that a good cartoon is worth more than a thousand words, we are now making regular use of an excellent cartoonist (Chris Slane). We now regularly commission two cartoons for our quarterly print publication, The Specialist, with the main themes being entrenched specialist shortages, hospital laboratory privatisation and our 25th anniversary celebration.
Our two priority challenges remain unchanged – entrenched specialist shortages in DHBs and ensuring distributive clinical leadership.

Entrenched Specialist Shortages in DHBs the Norm

To the extent that the expression ‘the elephant inside the room’ has applicability, entrenched specialist shortages in DHBs are it. The ASMS and former Health Minister Tony Ryall fell out over DHB specialist numbers. His approach to solving what he had previously described as a ‘crisis’ was to use fudged data to embellish the situation to make it look much better than it actually was.

But what was not in doubt was the fact that specialist numbers in DHBs were increasing annually. In each of his years, hospital specialist numbers increased, although at a slightly lower annual average rate than the corresponding years upon which he based his crisis analysis.

Specialist numbers are increasing – in fact they have increased in every year of the ASMS’ 25 year history; even in the worst years of severe trans-Tasman losses. But the real issue is whether the rate of increase is adequate or not.
Our analysis of specialist workforce information shows that while the specialist workforce is growing each year, it is well short of what is needed to meet growing health needs. DHBs need to significantly increase recruitment of hospital specialists, by about 100 a year, in order for their public hospitals to continue functioning properly in the future. That is, 100 extra specialists on average over and above what they already recruit if they want to continue providing quality health care.

While there is no universally agreed way to determine a nation’s need for medical specialists, in 2010 the country’s DHBs and the ASMS agreed to use Australia as a benchmark. Australia’s population is of a similar age structure to New Zealand’s; we have a roughly similar balance of hospital specialists to general practitioners, and a similar number of nurses per population. Further, we have the same secondary care specialist colleges.

It is also fair to say that most New Zealanders expect our public services, such as health and education, to be at least on a par with those in Australia. On the basis of its public comments so does the government.

Workforce data indicates Australia will have an estimated 1.5 specialists per 1,000 population by the year 2021. For New Zealand to be on a par with Australia by that time, this country will need about 7,300 specialists in total, including around 6,060 DHB-employed specialists. Currently we’re on track to have just over 5,300 DHB specialists.

In reality, we probably need even more than this number as New Zealand’s health needs are greater than Australia’s based on key health measures such as cardiovascular disease, cancer mortality, infant mortality and diabetes prevalence. So 100 extra specialists a year is actually a conservative measure and we’re failing to meet even that.

The other side of the coin, largely as a result of this significant deficit, is that our public health system is creaking and straining under increased workload pressures, entrenched specialist shortages, the impact of an aging population, more chronic illness, and greater government expectations. Unfortunately this has become the norm.

It needs to be publicly acknowledged that entrenched specialist workforce shortages in our public hospitals are one of the top problems facing health in this New Zealand. At long last this has now been recognised by the Government’s health workforce agency, Health Workforce New Zealand.

In a report on The Role of Health Workforce New Zealand, released last November, it wrote:

While the Taskforce initially focused on the immediate postgraduate period, it has now adopted a whole-of-career perspective. The most important issue currently is the impact of a prolonged period of medical labour shortages on the workloads, wellbeing and productivity of DHB-employed senior doctors. Other areas under consideration, some of which are directly related, include the distribution and long-term retention, including retirement intentions, of doctors trained in New Zealand and overseas.

ASMS is giving top priority to this excellent recognition and commitment. Informal discussions with HWNZ are being initiated and we hope that good progress is made on how best to overcome this untenable and high risk situation in the coming months.

Duplicity, Spin and Politics in Public Hospital Laboratory Crisis

The Capital & Coast and Hutt Valley DHBs at the bottom of the North Island are involved in a huge controversy over a determined effort to have their hospital laboratories run by a private company (Healthscope), despite strong clinical advice not to go down this path. Although also involving Healthscope, this is far riskier than the earlier Healthscope (Labtests) fiasco (including highly compromised patient diagnosis) with the three Auckland DHBs a few years ago because that one, unlike the current attempt, only involved community testing (not hospital testing).

DHBs are responsible for funding both community (GP referrals) and hospital testing (specialist referrals) laboratories. With some exceptions, DHBs provide hospital testing and fund community testing through capitated contracts with private providers. The latter are predominantly owned by either of the two Australian companies, Healthscope and Sonic. While Sonic historically has been the stronger of the two, it is now shifting almost monopolistically to the latter.

Since 2008 when DHBs have had to renew their community testing, they have simply done that by either negotiating a renewal with the existing provider or opening up to a procurement tendering process for community testing only. Their hospital laboratories were deliberately, in the interest of stability and their high level of integration with other hospital specialist services (they affect around 70% of clinical decision-making), not put at risk by the procurement process.

However, the inexperienced leaderships of the Capital & Coast and Hutt Valley DHBs thought they knew better. They determined, without engaging, as required by government policy and collective agreement obligations, with relevant clinicians to put the stability and integration of their hospital laboratories at risk by subjecting them to this procurement process. Pathologists, other laboratory specialists and ‘end user’ specialists were deliberately excluded from this decision. The effect was to ensure a predetermined outcome of having a private company run the hospital laboratory. Once the form of the procurement decision was made, the drivers of this process were able to dubiously use commercial confidentiality and conflict of interest to marginalise subsequent clinical engagement to the details of implementation, rather than addressing the question of whether it should be done. Even in the important area of specifications, pathologists are highly critical of a flawed process that failed to meet the threshold of robustness.

Two private companies responded to the ‘request for proposals’ but one (the incumbent; part local company and part Sonic) withdrew in frustration at the DHBs’ process, including what it considered to be changing positions. This left the controversial Healthscope as sole bidder in a discredited process.
On 6 March the DHBs provisionally chose Healthscope to run the region’s hospital and community laboratory services. The DHBs are working hard to downplay the significance of the word ‘provisional’ to give the impression that having Healthscope running the hospital laboratories is inevitable and that Health Minister Jonathan Coleman’s role is purely technical; merely a rubber stamp.

This decision flies in the face of strong clinical opposition (including the New Zealand Committee of the College of Pathologists, the DHBs own pathologists and the wider hospital specialists, predominantly ‘end users’). Who in their right mind would proceed further in light of this level of expert clinical opposition! Further, it is clear from information we received under the Official Information Act that the decision was made in the absence of good financial analysis.

The fatal decision was the decision of the DHBs’ leadership to go down a particular procurement process by ignoring clinical engagement with specialists working in and alongside the hospital laboratories. The procurement approach adopted immediately had the effect of marginalising pathologists to a reactive role as narrowly defined by the leadership, in effect, closing down engagement and debate, which appears to have been the intention. In late January, 20 Capital & Coast and Hutt Valley pathologists wrote to the Minister of Health stating: Had we been allowed the opportunity to have been involved in this critical stage the process would have been much better and the outcome both better and different.

Rubbing in the duplicity, very inappropriately and obviously worked out before the Boards’ provisional decision, the DHBs and Healthscope have determined what positions should be employed by Healthscope, which by the DHBs and which by both.

The outcome, if the Health Minister allows them to get their way would be a cumbersome complex employment relationship which rests uncomfortably on what the hospital laboratories role is and their predominant professional clinical relationship. They have predetermined that some specialists will be fully employed by Healthscope, some will be employed by both, and a small number will continue to be employed by the DHBs. But their prime professional clinical working relationship will be with ‘end user’ hospital specialists employed by the DHBs. This fragmented employment structure would introduce confusing accountabilities and cuts across the high level of integration between laboratory and ‘end user’ specialists. It loses sight of the critical importance of this integration.

What is also concerning is that while the DHBs’ leadership try to spin this as a done deal, for some inexplicable reason they have not released the 6 March resolution(s) that their spin is based on. While they produced a 24-page ‘consultation’ document, supposedly based on these resolutions, in about 24 hours, they are not able to provide the actual resolution(s) despite our repeated requests to do so. We have been forced to seek them under the Official Information Act. This conduct has an unpleasant ‘smell’ about it.
Another ‘smell’ was the unprofessional action of sending out a memo to key DHB staff in the name of a respected clinical leader that defended the DHBs position (and dismissed our concerns). The best thing about this memo was its inaccuracies and veracity deficit. But this was trumped by the fact that the clinical leader was not the author, it was written without his knowledge and consent. Forgery? Perhaps. Duplicity and disgraceful; definitely.
The top leadership of the DHBs is playing a high-risk game of political brinkmanship. It is seeking to box the Health Minister into a corner in order to get approval. He has been placed in an awkward position that was both avoidable and not of his making. The inept handling of the procurement process by the DHBs’ top leadership has raised serious litigation risks should Healthscope not get control over the hospital laboratories. This situation should never have been allowed to occur but it has. Inevitably, the Minister now has to adopt a cautious approach to managing risk. But while the Minister is wise to be cautious, the interests of patients should trump litigation risk. It would be absurd to allow a private company to influence or control a core service that affects 70% of clinical decision-making because of litigation fears.

Further, the DHBs leadership’s brinkmanship risks compromising credibility with regard to the Health Minister’s commitment to clinical leadership. Dr Coleman told delegates at the ASMS Annual Conference last November that clinical engagement is the key to good performance. This included: “Clinician engagement makes a difference not just to the morale of a DHB but also to its efficiency and quality of the health care delivered. Whenever a DHB chair or chief executive wants to discuss a new idea or service change with me, I say to them: well, what do the doctors’ think of this?” He also deliberately reiterated this in the specific context of this hospital laboratories controversy.

Ignoring the strong criticisms of the DHBs’ position from (a) local hospital pathologists, (b) the Society of Pathologists, and (c) ‘end user’ hospital specialists would mean that the Minister would lose credibility over his commitment to clinical leadership for the rest of his term and would be a clear message to DHBs that his message on the importance of clinical leadership is not to be taken seriously.

Brinkmanship should only be attempted by those who are good at it. The drivers of this laboratory restructuring are clearly not. But what is also concerning is that none of the main players behind this restructuring will be accountable for the consequences of their actions. One chief executive (a temporary appointment) has found herself like a possum caught in the headlights and will soon be gone. The other has already been run over by whatever is behind the headlights (resigned before pushed). The Chair of the two Boards (same person) may not be in one or both of these positions for too much longer, based on this debacle.

Trans Pacific Partnership Agreement

At our Annual Conference last November delegates were highly impressed with an outstanding presentation by a Canterbury psychiatrist Dr Erik Monasterio on the Trans Pacific Partnership Agreement with a focus on the pharmaceutical industry. After a lengthy debate, the Conference adopted the following two resolutions without dissent (one abstention):

That Annual Conference support the request for a formal independent health impact assessment of the Trans Pacific Partnership based on the draft text prior to signing.

That the ASMS opposes the TPPA on the grounds that health care will suffer from the loss of national autonomy that may result.

Subsequently the National Executive approved the funding of travel costs for Dr Monasterio to address meetings on the TPPA at our local branches. This is for our branches to request but despite being only recently notified there has been considerable interest and at least two meetings confirmed to date.

Moving away from Mergers and Merger Stealth

There has a significant change of government attitude towards the merger of DHBs. Under the former Minister there was an informal non-official preference for mergers under the mistaken belief that structural change at the top drove system improvement change. There were two instances of this.

The first was the top-down driven merger of Otago and Southland DHBs at the bottom of the South Island into Southern DHB. This was not based on strengthened clinical relationships and ignored the challenge of providing health services to such a huge geographic mass with widely dispersed populations. It is now considered by many to be an embarrassment in need of ‘regime change’ and acting as two DHBs with one letterhead.

The second was an attempted merger by stealth in the three lower North Island DHBs – Capital & Coast, Hutt Valley and Wairarapa – under the brand name of ‘3D’. This included two DHBs sharing the same chief executives and senior management teams (Hutt Valley and Wairarapa) and two sharing the same Board Chair (Capital & Coast and Hutt Valley).

In response to strong specialist opposition, the new Health Minister halted a move towards one chief executive for all three DHBs and recently the DHBs have resolved (inevitably under the influence of the Minister) to reverse the decision for two of the DHBs to have the same chief executive and senior management team. The expectation is that the next step will for the two DHBs sharing the same Board Chair revert to having separate Chairs and possible the current Chair losing this role in both of them because of performance concerns.

While the Minister may be reluctant to reverse the former merger in the lower South Island (although a number in the clinical frontline might welcome this), he is prepared to reverse informal stealth moves that have become unpopular.
The unpopularity in the lower North Island is, in part, in response to objections about the use of stealth tactics to achieve an outcome without being upfront about it but also to poor governance and operational leadership with the result being ‘3D’ becoming a toxic brand (somewhat like HBL). It is also expected that ‘3D’ will be dropped from the language of the DHBs. This is sensible, although clinically-led service collaboration between DHBs needs to be encouraged. The baby should not be thrown out with the bath water because of the poor performance of the bath manufacturers.

What is clear is that in contrast with the regime under the former Minister, there is a loss of appetite by government for top-down structural change as the driver for improvements. If my analysis is correct then this is a sensible direction less conducive to distraction and more conducive to sustainable rather than cosmetic process improvements.

Ian Powell

ENDS

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