OPINION: Yet another public-sector cost blowout has hit the news. This time it's the Waikato District Health Board and its alterations to the old Farmers building on the corner of Anglesea and Collingwood streets.
No stranger to problems with failed computer systems, dodgy CEOs and the Henry Rongomau Bennett Centre being declared unfit for purpose, the DHB has already seen the building's budget double from $7.7 million to $14.7m in July 2017. Now, faced with another huge cost increase, staff have dropped two key services, Diabetes and Adult Mental Health, from the project. So despite paying twice, we are not even getting what we paid for in the first place!
This may not be a council project, but the Hamilton Residents and Ratepayers Association will still stand up and demand the best we can get for our people, and this is not good enough. Whether we are paying for this through rates or taxes makes no difference. The real cost is to the sick people who will miss out. How many surgeries will be cancelled to recover the money?
I say that provocatively, because I am certain hospital management will claim that no patients will suffer. Health is such a political hot potato that the Ministry of Health and the DHB system are set up to deny the undeniable. Even their accounting processes now use terms like "unfavourable to budget" for losing money.
Of the 20 DHBs in New Zealand, Waikato's performance in the year to June 2018 was the worst, with $21m "unfavourable", and had $25.4m of "savings not achieved".
The management speak in the monthly ministry report to Health Minister David Clark reads like buzzword bingo.
"To manage presenting risks, the Ministry is undertaking a short, sharp financial and clinical assessment of DHB plans to assess ability to deliver on the Government priorities. The Ministry, working with DHBs and The Treasury, is supporting the development of robust 2018/19 annual plans by analysing historical DHB performance as a means of understanding what is driving current deficits, and delivering insights that can inform service change for 2018/19 where required. This action is an initial step to be put in place until a wider review of system performance can be commissioned and completed."
Anyone who writes like this needs the adult mental health service that is being left behind. In plain English, the ministry doesn't know what causes cost blowouts, and is having a quick look at past problems in order to make guesses for next year's budgets.
There is pressure to make a surplus, which means cuts will be applied to clinical areas, waiting lists will be adjusted, and (despite denials) surgeries will be cut - but complicated words will be used to obscure it.
The issues aren't unique to Waikato. Earlier this year, it was revealed that Middlemore Hospital's new buildings were leaking disasters with widespread rot and a $70m repair bill. Health bosses decided to delay telling the minister because it would make their numbers look bad. Disturbingly, the delay allowed a 10-year statutory limit for legal claims against the builder and architect to pass. That's the really rotten part.
Clearly something is wrong with the system and the DHB model needs changing. The board comprises seven members elected at the same time as council elections, and up to four members appointed by the Minister of Health - who also picks the chair and deputy chair. The previous chair, chosen by a National minister, was former National MP Bob Simcock. The current deputy, chosen by a Labour minister, is former Labour MP Margaret Wilson. Are we getting the right people?
The board meets monthly, but there are numerous subcommittees and board members are expected to contribute 30 days per year to the DHB. Does this mean there are too many layers in the management structure? Is bureaucracy a big part of the problem? Too often, committees exist so that individuals can't be held responsible for bad decisions.
The board employs an executive team to manage operational matters, including hiring staff and engaging consultants (such as for building projects). Board members can only make decisions based on the information and advice given by these people. When that turns out to be wrong, there need to be consequences. In May, the director of the SmartHealth computer system lost his job as a result of the $26m failure. What will happen about this latest blowout?
Bob Simcock and Nigel Murray have also paid the price this year. It is great to see accountability in a government organisation, so other board members have done their job. But it would be so much better to avoid the problems in the first place and stop wasting money.
Let's see if we can come up with a better way of providing healthcare. I would like to hear from people in the system with suggestions because it is something that residents associations across the country can push for. The new government is interested and looking at a major review, so change is possible.
* Andrew Bydder is the spokesman for the Hamilton Residents & Ratepayers Association and an architect.