Dunedin Hospital: 'Outrage' over govt decision to downgrade project

• The government has told Health NZ to find ways to stick to Dunedin Hospital's $1.88 billion budget
• Cuts, delays, and upgrading the old hospital site are all being considered
• Dunedin mayor's says it amounts to clinical cuts and a broken promise
• A doctors' association says the aspirations of the Dunedin Hospital were too high

Dunedin's mayor is "outraged" over news that the city's new hospital will be downgraded.

A report commissioned by the government found current plans for the hospital could not be delivered within the $1.88 billion budget, which could balloon to $3 billion.

Ministers have asked for urgent advice to keep costs in line.

Cuts, delays, shelving spaces or developing the old hospital site were now all on the table, and officials were expected to come back to the government with advice in the coming weeks.

Dunedin's mayor Jules Radich said the announcement was a disservice to the lower South Island, as the hospital was critical to the region.

"I was outraged. I was deeply disappointed because I was optimistic about their visit to Dunedin. But it was quite the opposite," he said.

"What they revealed today would amount to clinical cuts and a broken promise by the government."

The people of the south would pay the price of not building the hospital properly, he said.

"They don't have to spend $3 billion. They are looking at creative ways of achieving the delivery of all services and facilities. They need to work hard enough on that to achieve it."

A rally to protest hospital cuts was already planned in Dunedin on Saturday, but he expected the march might now double in size.

"I'd like to call on everyone who can make it to join the march and help send a clear and unequivocal message to the government: 'deliver the hospital you promised with no cuts to clinical services and facilities,'" he said.

But Gore District mayor Ben Bell said $3b was an unrealistic figure for a new hospital and the government's concern with the cost was reasonable.

"At this stage there are no cuts to the front line services, which would be our main concern," he said.

"It does show the importance of our rural hospitals in the meantime and the dependency of these beds on the network."

Speaking from Dunedin, Infrastructure Minister Chris Bishop said the government was committed to building a new hospital but the latest costs were too high.

"We can't justify spending up to $3b here because that comes at the cost of potentially other investments in the wider region but also other regional hospitals."

Ministers asked for an independent review of the hospital's budget after receiving a request for a further $290 million to cover the ballooning costs in March.

The review found significant uncertainty over the cost of the inpatient building and about $400 million needed for a pathology lab, some refurbishing, and carparks had not been set aside and was not in the business case, he said.

"The project probably couldn't be delivered in the envelope of $1.88b."

When Health Minister Dr Shane Reti visited the site in June, he confirmed the government was committed to its election campaign pledge to restore previously cut beds, operating theatres and imaging services.

Reti said this week that promise was based on the best evidence the government had, but that information was flawed, and he did not have findings from the review despite the report being delivered at the end of the May.

"We were still waiting to have collective advice from the ministers to peruse the Rust Review and the recommendations arising from that review."

The government has told Health New Zealand it needs to stick to budget and provide urgent advice on two options to make that happen - which could include making the hospital smaller, delaying fit-outs, or staged development on the old site.

Health New Zealand's head of infrastructure delivery Blake Lepper said the agency was working out what that could look like.

"No decisions have been made around any of those things and that's something that we need to engage with the clinical leaders group in particular to make sure we fully understand that trade-offs associated with any of those things that are being put on the table."

Labour's associate health spokesperson Tracey McLellan said the cost was the cost, and the government just needed to get it done.

"It was the clinically preferred option. It has been through multiple, multiple reviews. All of the fat has been cut out of this hospital already and if we keep doing it, we won't have a hospital that's fit for the future or fit for the people," she said.

The rebuild had been fraught from the beginning, New Zealand Resident Doctors Association national secretary Dr Deborah Powell said.

"I think we need to remember that infrastructure across our health sector is woefully inadequate, across the whole of New Zealand. You frequently hear about Northland and Hawke's Bay and other centres. I would add Counties Manukau to that list," she said.

"That hospital is well past its use-by date, sitting in the middle of a very vulnerable and at risk community who have high needs, and growing."

Dunedin Hospital would have had more beds than Counties Manukau for a much smaller population - and the country could not afford $3b for one hospital in Dunedin, Powell said.

"Bottom line: There's only so much money and there is a huge demand for infrastructure in our health system. We have got so far behind in supporting infrastructure that when you sit back and look at the whole of New Zealand, increasing the spend on Dunedin, I don't believe it's justified."

New Zealand had a problem with how it spread limited resources equitably across the country - but at the core of the issue was not enough money, she said.

"For all the rhetoric you're hearing from Minister Reti and [Health NZ Commissioner Lester Levy] at the moment, health does not have enough money ... basic services, we're struggling to meet them, in fact, in some areas we're not meeting them."

New Zealand needed to spend more on health if the country wanted to have the health system it aspired to, she said.