Several weeks ago, the Government dramatically moved to take control of Health New Zealand by appointing Professor Lester Levy as a commissioner.
He has the unenviable task of finding 1.4 billion dollars in savings, while also improving services and meeting the Government’s national health targets.
In the weeks that have followed, the dire state of our healthcare has become clearer, with patient wait times dragging mid-winter, back office staff facing voluntary redundancy, and new mums struggling to get post-birth toast.
It begs the question, will this cost cutting inevitably be put ahead of healthcare?
Today on The Front Page, I’m joined by New Zealand Herald senior health reporter Isaac Davison, to find out what the troubled state of Te Whatu Ora means for the future of healthcare in New Zealand.
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You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Georgina Campbell
Sound Engineer: Paddy Fox
Producer: Ethan Sills
Kilda. I'm Georgina Campbell in for Chelsea Daniels and this is the Front Page, a daily podcast presented by the New Zealand Herald. Several weeks ago, the government dramatically move to take control of House New Zealand by appointing Professor Lester Levy as a commissioner. He has the unenviable task of finding one point four billion dollars in savings while also improving services and meeting the government's national health targets. In the weeks that have followed, the dire state of our healthcare has become clearer, with patient wait times dragging midwinter, back office staff facing voluntary redundancy, and new mums struggling to get post birth toast. It begs the question will this cost cut inevitably be put ahead of healthcare? Today? On the Front Page, I'm joined by New Zealand Herald senior health reporter Isaac Davidson to find out what the troubled state of tafata Aura means for the future of healthcare in New Zealand. Isaac, why did the government appoint a commissioner at House New Zealand?
Yeah?
So really from day one, government started expressing concerns about Health and Z or Tafuta Aura's performance. It had already talked about being skeptical about the reforms, and so it began to act in December broad on this Crown Observer. And this was just because of concern about the amount of time people waiting and workforce gaps, and these concerns then really intensified around March, and this is when it became evident how much Health then Z was overspending by so said at the time it was around one hundred and thirty million dollars a month that it was overspending. And it put in place some of these initial responses en Z, did you know, hiring freeze around non frontline workers, cracking down on overtime and taking leave, but all those restrictions, so it weren't enough. And then at the same time you had unrest on the board. Three board members didn't seek reappointment, another couple resigned before their term is up. All these issues just came to a head in July and Shane Retty stepped in, brought in the commissioner, Lester Levy, who had already been appointed chair at Health end Z. Two remaining board members were effectively sacked and the rationale that was given at the time, Retti said it was basically financial mismanagement that was going to lead to a deficit of about one point four billion. They didn't have enough oversight and also these reforms that were coming through were being mismanaged too.
So that's pretty serious intervention, right, like a commissioner. Can you just put that into context for me?
Yeah, it's the most serious thing Retti can do in terms of the legislation which governs health end zed. He has a few options which escalate. One of them was interim, one was the Crown Observer. The most serious is bringing in a commissioner, which he's now done.
And Lester Levy was already the chair previously. What else can you tell us about who he is a little bit about his background?
Yeah, so he has a long record in these sorts of roles in health and academia and local government. So he's a trained doctor, that's his background. It's originally from South Africa and he's had sort of over twenty five years. He's headed up the Blood Service, the old Mercy Ascott Hospital, Auckland Transport.
He also cheered three of the DHBs.
Under the old system, in Auckland, including counties Minico where he met he first met Marjori Uppo, who's now head of Health end Z. Just one thing just worth plucking out of his background as biography is that when you grow up in South Africa, he lived in Sharpville and this is where this sort of infamous massacre was when police open fire and black protesters. The reason I mentioned that is because he said it was only six at the time, but it really shaped the rest of his life, both his personal life and professional life. Just to pluck out a couple of things, he said, I developed a mindset of not necessarily it's accepting the status quo, never to fall victim to complacency and different rance. Never had a great desire to fit in. And he also said they don't need to be popular or part of the establishment.
Yeah.
I mentioned that because it gives you a bit of a clue about why he's taken on this hard roll and my government might bring him in. And also just when he's facing so much resistance from the health system, that's sort of the background that he's bringing in.
Yeah. Absolutely, And look you've mentioned Marjie Arper. How is Lester Levy getting on in terms of working alongside the chief executive and management at health en Z to funt Aura.
Yeah, yeah, he knows her well, so he was chair or while she was chief executive at Counties. I think they got off to a pretty bad start. In that very first press conference when he was brought in commissioner, he was asked directly did he have confidence in his chief executive? And his first response was fair question, Professor Levy.
I know this is a kind of brutal question to ask in this context, but then don't you've moved of them as a County's actually said three years to get speeding with him, two years just to cret years to get to spend with in constraints. Do you have confidence in her long term? So yeah, to answer that and fair questions, so I've just been appointed.
What I can and will say is that.
I've been impressed by Margie's willingness to readjust to a new direction and the effort that she's making to do that. I'm not fixed on outcomes about any of these things, open on outcomes, so we see how it goes. Right at the moment, Do I have confidence in Marjorie to do what we need to do? Yes, I do, because she's already doing it.
It went on to say that it being impressed by a willingness to sort of take how things had in a new direction. But that's not exactly a ringing endorsement, and since then it has got worse in some senses. There was this moment last month when health Ing ZIR bosses gave a presentation internal presentation which Margie was part of, and they outlined how thousands of jobs were being reviewed, including specialists and nurses, and this led to Leicester Lee by giving a pretty extraordinary public critic of the leadership, including Marjorie Arpa. It used words like unacceptable, deeply disappointing. It's a direct conflict with commitments he had made around not cutting the front line, so that relationship already had a few wobbles.
Yeah, it was pretty public criticism. Is there any indications to what their relationships like now or have we seen anything else play out in public since then?
We haven't.
That has sort of really been the last we've heard on it. I guess one thing to add was that Upper might have reason to be concerned if you look at the way that government has acted in other sort of underperforming or what it sees as underperforming areas. If you look at Kaiing Aura put out a big review, came back with damning results, and then rarely was quite ruthless and rolled the entire boards. So she would surely have one eye on that sort of thing.
And you have mentioned some of the financial difficulty. Can we just dig into that a little bit more? What do we know about the state of House New Zealand's books.
Yeah, so when the commissioner was brought in there was sort of two distinct arguments. Government said this is financial mismanagement and the opposition or labour said, well, actually it's underfunding how things. He is underfunded. So if we look back we can see that how things he had ran a deficit in its first year, so this is twenty twenty two to twenty three, but these were one off problems, mostly costs related to COVID, so nothing too major. It was then projected to make savings in its second year. This is partly because of it was all streamlining and reducing duplication and services and so forth. But this is as I mentioned earlier, it became apparent this wasn't going to happen. It was by March this year, it was clear that it was spending sort of one hundred and thirty million too much a month. It's really important to look at what's driving this overspend. Its two key factors. One is the pay equity settlement for nurses, and the second, which they talked about quite a lot publicly, is overspending on nurse recruitment. So New Zealand had a massive shortage of nurses aggressively recruited under the previous government and this government, and that's now overcorrected. There's still vacancies, but that there's got a long way to addressing that. I guess the reason it's important to drive those factors is that no politician would say we've got too much nurses. So it doesn't quite fit as easily with that argument of financial mismanagement and wasteful spending when you know that's what's driving it.
Yeah, So what does labor have to say in response to those accusations because this government is blaming the previous government for what they say is mismanagement.
Yeah, that's right.
So it's opposition in particular. So former Health Minister A Cheverel says the problem stem from inadequate levels of funding provided by the new government, especially in this year's budget. She particularly points to health officials saying earlier this year they'd need a bigger top up than forecasts. So before the election there was an estimate of what it would need that has now changed, and that's because of things like demographic changes and inflation. They didn't get this in the budget. They got the lower estimate. So to quote Verril on this to summon it, the government's trying to pretend this is something to do with health and zed governance.
It is to do with their budget, she said. And we saw some backing for this and.
Editorial and New Zealand Medical Journal a few weeks ago and where researchers looked and drilled down into this and said cost overruns were unlikely to be solely caused by port management and really successive governments had underfunded health.
So plenty of problems are pretty big mountain to climb. How does Levy plan to turn all of this around?
Yeah, so he outlined a few priorities, getting spending under control, reducing bureaucracy. We had this slightly notorious comic now that Christopher Luxe and the Prime Minister made around there being fourteen layers of bureaucracy between the top of tafutor and the patient has now been shown to be slightly false, but les Leeves certainly said it's a bloated organization. That's what he wants to crack down on. Also talking about better value for spending, so improving performance. That's really around productivity, and he singled out surgical weightlist or weightlists, which blown out as really one of his top priorities. He's also wanting healthcare to become more localized again, so under Health n Z it feels it's become too centralized.
In Wellington.
He's talked about a hard reset and he's made some moves already in that direction by appointing for regional deputy chief executives and rationale for that is what he calls bringing decision making closer to communities. So there's a bit of devolvement going on there, but the main thing is really tackling that overspend and changing the shape of health in New Zealand making it a bit smaller, changing its structure and reducing non frontline roles to meet this budgets.
And one of the things that has been put on the table is a voluntary redundancy scheme. Can you tell us more about that.
Yeah, So last week care was put out by Tafatura for voluntary redundancies to people working in health administration, advisory and knowledge roles.
This is what they would call back office roles. The union says.
The jobs like are people that schedule operations, keeping on top of supply chains HR communications. So people can now put their names forward. That's the limit of it so far, but it may be extended further if they do want to cut more jobs.
The PSA, in response to that redundancy scheme said, this looks like and I quote, to be part of the government's agenda to strip back public services as a prelude to privatization. Is there any truth to that, any response from the government to those suggestions.
It's a big claim and I haven't seen government respond to it. I guess at the heart of that is the concern that while politicians would call these back office roles that by removing them, you desabilize the foundations of the health system. That's what the union said, So it's cutting the staff which make diagnosis and treatment possible. The people to underline that, and also that it's unfocused and broad it's cost cutting without considering how it to.
Affect people's health.
I think psare probably thinking a little bit as well about the UK, where under a conservative government the NHS was ground down and underfunded and then services were privatized. One more thing to mention is that in this underfunded health system there's already been sort of a quiet creep of private ownership in some areas. I'm thinking of the diversion of elective surgeries into private practice of private doctor has been helping out with backlogs, and also the purchase of GP clinics by private companies.
And just on cost cutting. I wrote a story at the weekend about Wellington Regional Hospital no longer offering to host with spreads to mums who have just given birth. They said that they were doing this following advice from dietitians that toast is nutritionally suboptimal. Labor said it believes this is cost cutting, and a father whose partner had given birth that weekend was also told by hospital staff that it was cost cutting.
Lead emails seen by One News shows the moves not just about nutrition than king. A Health New Zealand general manager wrote to Stuff saying the patient food budget blew out by one and a half million dollars last year, part of the reason being staff and members of the public were eating the food. He said, in the fiscal environment, these practices are untenable.
This is such a small cost saving strategy on the scale of the becasts that a hospital has, but a massive cost for goodwill.
So it's an interesting example of what's going on. And a piece of toast is such a simple thing. A loaf of bread doesn't cost a lot, but it clearly meant so much and has meant so much to mums. Lots of people posted on social media about a cup of tea or a milo and a piece of toast after giving birth was just the best toast that they'd had in their life. Can you tell us a bit more about that or what you make of it, or if you have your own experience.
Yeah, I do bring a little bit of personal experience to this. When we had our second child at Auckland Hospital, we went across the road to part our birth care and it was late at night, about ten or eleven at night, and we were supplied a brilliant cheese toasty by the care there. And it's hard to overstate how good that was. It was sort of this transcendent culinary experience. And I'm not even the one that did all the work with having our child, so I can see. It's just one of those emotional issues of when funding affects people on a human level, it just brings the mind as well. When Lester Levy gave his first speech as Commissioner, and one of the other things he said amongst his priorities was so the health system needs to be more compassionate, he gave this slightly extraordinary quote that the health system needs to be infused with the milk of human kindness. It's quite maternal image. I think denying mother's a piece of toast after birth is probably not what he had in mind, but it's one of those issues. It's sort of the funding debate in microcosm rearly in one hand saying it's been done for health reasons, you know, mutual reasons, the other because there's.
Not enough money.
And we'll see more stories like this and more serious ones as this sort of funding debate goes on. You know, it reminds us as real people behind these decisions and whose experience of health system might be suffering. We've seen a few really serious examples just in the last week, you know, people queuing from six am to see a gp in Otara hospital eds without doctors overnight.
Yeah.
As I say, see a lot more stories like this was the health system and transition or someone' say in crisis.
The toast situation is certainly not what the House Minister Shane Retti had in mind and he strongly urged the hospital to reconsider its position and just to say that it has. In fact you turned and toast will continue to be offered for new muns. I mean, what does the current state of House New Zealand mean for the future of our housecare? Is it that we're just going to see more and more of these stories as you say.
Yeah, I mean the bigger picture is you've got these big, long running problems that are beginning to stack up on top of each other. You got growing aging population, people with more complex conditions, iniquities and in terms of access to health care depending on where you live or your ethnicity. And at the same time you've got a shrinking, aging workforce means exhausted and burnt out and laid over that you've got the shock of COVID nineteen, which is still reverberating and affecting things like shortages and waitlists. So it's a concern when you look at all that the biggest health provider in the country is in poor shape. You know, Health New Zealand was broad in after a big review and it was meant to be a new way of doing things, tackling and equity and providing consistent healthcare around the country. It's now just over two years old, it's already been drastically altered, and now some of its reforms are being reversed. Our health authority scraped, the board's gone. So Levy really needs to get Health end Zed working quickly if we're going to fulfill some of the promise on which it was built and tackle some of these really big picture issues. He said in a speach a couple of things that's worth pointing out. He said, I'm not a religious person, but please pray for me, so I don't think he's got any illusions about the task ahead. He also said one thing that sort of came as a bit of a warning that in terms of the changes he's making, they're going to be fast and painful. I certainly don't know that some of the issues that are changed. I'm not sure about the fast part, but I'd certainly agree that there's probably quite a bit more pain to come.
Thanks so much for joining us, Isaac. That's it for this episode of the Front Page. You can read more about today's stories and extensive news coverage at zidherld dot co dot nzed. The Front Page is produced by Ethan Sills and sound engineer Patti Fox. I'm Georgina Campbell. Subscribe to the Front Page on iHeartRadio or wherever you get your podcasts, and tune in tomorrow for another look behind the headlines.