Health Provider Says Alliance Cost Concerns Are Valid

New Zealand’s major provider of mental health services says the Alliance Party is correct in questioning the real costs of the latest health sector restructuring.

Richmond Fellowship New Zealand, which provides community-based services for 2000 clients annually, says Labour’s estimate of $12-$20 to create the 21 new District Health Boards seems too light, and doesn’t acknowledge the cost to service providers.

The junior partner in the coalition Government made a submission to the Select Committee considering the Public Health and Disability Bill today, raising concerns about the total cost.

Fellowship chief executive Dr Gerry Walmisley says non-governmental providers face major costs to comply with new contracting arrangements. He says the cumulative effect is an enormous among of bureaucratic drag which will cost many millions of dollars and distract providers from the development and delivery of innovative services.

Dr Walmisley says Richmond Fellowship alone will incur more than $500,000 in administrative and personnel costs to bring its systems into line with the DHB requirements. The Fellowship will have to negotiate with 12-14 of the 21 health boards, and more if clients are referred from other regions or health board areas.

“These are significant hidden costs which many non-governmental providers can ill-afford. The Health Minister should acknowledge the true cost of the reforms and admit that there is an on-going inefficiency designed into the DHB model.”

Richmond Fellowship has consistently opposed the DHB structure which it says is a naïve and sentimental model that will not benefit mental health significantly, especially in the smaller centres.

Ends

Further information: Dr Gerry Walmisley
Chief Executive
Richmond Fellowship New Zealand
Phone 03 366 5156

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