Health Benefits gone, but tensions remain

Heated debate over funding, savings and how to do more with relatively less dominated the health sector over the last year.

The theme is set to continue in 2015, with more debate looming about such topics, including a major proposed change to food and catering in public hospitals - who should provide it, what standards should be met, how long should any contract last, will it work and will it save money?

This centres on Health Benefits Limited (HBL), a group set up in 2010 to find $700 million in back-office savings among district health boards (DHBs) for re-investment in health.

HBL worked, largely behind the scenes, on four key business cases concerning an IT infrastructure for all 20 DHBs, a single Finance, Procurement and Supply Chain (FPSC) programme and the joint procurement of food, linen and laundry services at public hospitals.

But it met deep resistance from DHBs, with one leaked document likening the work to that of a Ponzi scheme, a view the Government rejected.

The DHBs' worries centred on the financial commitment required from them - in tight times - to meet savings goals that did not always appear realistic and, in some cases, cost more than their current approach.

So there was huge relief in November when new Health Minister Jonathan Coleman announced that HBL would be wound down. It was a major victory for the DHBs, which were nevertheless given the task of implementing the business cases developed by the group.

Dr Coleman made it clear the axing was in response to difficulties between HBL and DHBs but insisted savings must still be achieved - $620 million over the next four years.

It took the heat out of the situation, but the projects remain running full steam ahead.

Conflict over hospital food

The three Auckland-region DHBs were the first to consider HBL's food and catering business case, in December. They opted to implement the plan, giving the job of buying, preparing and delivering food at all of the region's public hospitals and clinics to UK-based Compass Group.

The firm already provides 44 percent of all patient meals served in New Zealand, including meals at the Counties Manukau and Waitemata DHBs. Its 15-year contract covering all three DHBs is expected to save them between $80 million and $90 million over the period, for redirection into clinical services. Supplied information indicates the major change in future will be more pre-prepared meals that are then heated on-site.

But the change is bitterly opposed by food service workers, many of whom walked off the job at Auckland City Hospital the day they heard news of the deal. They were told they could transfer to Compass under the same terms and conditions but worry about the future for those who don't transfer, and the long-term job security of those who do.

That's based on an assessment prepared for the DHBs in October that said 53 full-time jobs in this area could disappear eventually. HBL says that doesn't take into account redeployment efforts.

The author of the assessment, former Auckland DHB chair Pat Snedden, commented: "It is my observation that attention to the workforce who have had to deal with much uncertainty has been the weakest part of this process to date, and only in part due to the necessary confidentiality that surrounds tender negotiations."

Senior doctors also lamented the lack of input, because of the closed process.

The [ http://www.radionz.co.nz/news/regional/256398/'changes-needed'-at-southern-dhb cash-strapped Southern DHB] is the next to consider the plan. Other DHBs will be watching closely, and will no doubt be keen to do more to keep all their staff on side, if possible.

Wages, court battles and 'unmet need'

Elsewhere in the health sector, there are other challenges - and large sums going towards addressing them.

One concerns so-called unmet need - patients who, in the view of their doctor, require hip or knee operations but fail to get them because of budgetary or other constraints. Association of Salaried Medical Specialists President Hein Stander told senior doctors at their annual conference in late November: "This seems to have gone past the point of 'watch this space'. There is increasing evidence that things are starting to unravel."

Dr Coleman reminded the same meeting the Government would spend an extra $50 million over three years to deliver 2550 extra hip, knee and other orthopaedic operations.

About $8 million extra is also going towards providing colonoscopies for the many people that are waiting longer than they should for the procedures - and that's before an expected future decision to introduce national screening for bowel cancer adds to the colonoscopy workload.

Aged care is looking for more funding as well. Resthomes are under pressure from courts and others to lift wages by between 10 and 20 percent.

Providers have said the perception of big profits in the sector is just that - a perception and not reality - and have pointed to a Government-commissioned report as proof. They have said, without extra funding, 40 percent of facilities would go to the wall if required to lift pay rates.

The Aged Care Association has said the Government has been "pushed by the court" in three other prominent cases: the IHC sleepover case; the right for family members caring for an adult disabled family member to be paid; and paid travel time for home support workers. "How many more times will the Government put up with social policy being set by the courts before they make a move to show they set social policy and not the judiciary?"

In an interview between the election in September and late November, Dr Coleman said he had never been busier.

He will need to come up with specific plans to do more about obesity. Workforce shortages won't go away any time soon, health targets are being maintained, and tight controls on budgets are unlikely to be eased.

In short, there'll be no let-up.