South Auckland hospital bosses say there's no point looking into whether a second Middlemore Hospital building broke the strict rules around healthcare spending.
Photo: RNZ / Cole Eastham-Farrelly
It says such an inquiry would serve "no clear current purpose or benefit".
A first such investigation has been going on for months by the Health Ministry into the brand-new Ko Awatea Two, which features a big lecture theatre. It cost $12 million but did not get the government sign-off required for capital works spending above a $10m cap.
The second building is Ko Awatea One, called an innovation hub. News reports in 2011 when it opened put the cost at $9.8m, just below the cap.
However, the Counties Manukau DHB was told by its capital works manager, during interviews this week with RNZ, that Ko Awatea One also cost more than the $10m cap.
"I know it was over 10 million," the manager Chester Buller said. "I was not party to that process, facilities [management] was not involved."
RNZ asked if the DHB would now investigate Ko Awatea One.
"There is no investigation underway or intended at this stage into approval processes for KA1 as it was many years ago now, reviewing its approval processes is not a priority for us and we do not have the resource to undertake what could be a substantial review and for no clear current purpose or benefit," the hospital said by email.
It added, however, that acting chief executive Gloria Johnson would discuss it with the new DHB chair Mark Gosche and the Health Ministry, "to see what their view is on whether or not any investigation is warranted".
DHBs must prepare 10-year capital intentions for projects worth $10m or more, including getting approval at regional and ministry level, plus approval from the Ministers of Health and Finance.
Ko Awatea One and Two don't offer medical services but have meeting rooms and a lecture theatre. Since 2008 there have been multiple internal DHB reports showing Middlemore urgently needs more wards and operating theatres.
Dr Johnson has said the funding of Ko Awatea Two, by selling $11m of medical equipment then leasing it back, was a "very bad deal" because when the deal's four-year term was up the hospital would have to extend it since it needed the equipment.
"There is considerable discontent about the fact that this [Ko Awatea Two] was allowed to proceed" by the previous board," Dr Johnson said.
As for Ko Awatea One, it was instigated by Geraint Martin, the chief executive for 11 years until April 2017.
"I am confident that all appropriate funding approvals were received for both the Ko Awatea 1 and 2 building projects," Mr Martin said in a statement to RNZ today.
"KA1 was built to replace the clinical teaching and staff training facilities lost when old and unfit buildings were demolished to make way for the new Hillary Ward block in 2009/10.
"KA2 is the replacement tiered lecture theatre that clinicians, especially orthopaedic surgeons, see as a vital facility for teaching. I shall be making no further comment."
In 2011 when Ko Awatea One opened, Mr Martin was quoted saying hospitals were very expensive places, so Ko Awatea aimed to link community-based healthcare with world-class innovation.
"It sits at the heart of the DHB's activities to improve value for money and to support the transformational change needed to keep pace with the demand for more and better health services managed within tight financial constraints," the Ko Awatea website says.
It was built in partnership with Manukau Institute of Technology, AUT University and Auckland University, plus an international health innovation group in Boston, US.
Establishing Ko Awatea was "a central part" of Middlemore completing a $500m capital redevelopment programme, "one of the largest in New Zealand", an online biography of Mr Martin says.
Ko Awatea director Professor Jonathan Gray left last year for a job at Otago University.