Health cash waste 'tip of the iceberg'

Millions of tax dollars locked up in the bank accounts of groups representing GPs could be "the tip of the iceberg" in terms of wasted health spending, insiders say.

The Dominion Post revealed yesterday that Health Minister Tony Ryall has told officials to investigate how primary health organisations (PHOs) have managed to stash away $115 million in cash and investments.

The money is supposed to be used for health promotion programmes such as fighting obesity, diabetes and anti-smoking initiatives.

PHOs were set up seven years ago to pump Government funding into community health. PHO bosses blamed some district health boards for taking too long to approve spending.

A spokesman for Mr Ryall said the minister expected a report from the Health Ministry before the end of the year.

"I am concerned at the growth in bureaucracy at PHO level when dollars should be getting to patients," Mr Ryall said yesterday.

Family doctors said they supported the Government's push to shift more money from bureaucracy to frontline services.

Independent Practitioners Association Council chairwoman Bev O'Keefe said GPs were frustrated that funding intended for health initiatives was getting stalled at PHO level.

"We need to look at some of the blocks in the system that are stopping that money getting released to help patients."

Many doctors had opposed the introduction of the PHO system in 2002, fearing "another layer of bureaucracy" would lead to more waste and government interference.

"Of the extra $400 million that went into primary health under the previous government, most of it was used to set up these 80-odd organisations," Dr O'Keefe said.

"We certainly support moves to rationalise some PHOs – it's not sustainable to have so many in a country this size."

College of General Practitioners chief executive Karen Thomas said doctors had been trying to raise awareness of wastage in the health system for years.

"If we as New Zealanders want to continue to have a reasonable standard of healthcare into the future, more money needs to go to frontline health workers, like GPs.

"We need informed public debate on the future of our health system because the current situation is not sustainable."

Former Hawke's Bay District Health Board chairman Kevin Atkinson said the unspent funds held by PHOs was "just the tip of the iceberg".

"Every health board in the country should be demanding that all community providers make a statutory declaration every year on June 30 of their unspent money and the time frame for spending it.

"We've got to make every dollar work."

Pinnacle chief executive John Macaskill-Smith, who oversees a network encompassing five central North Island PHOs with 100 practices between them, said an internal review this year revealed "a surprising amount" of cash reserves and investments.

Meanwhile, some patients were struggling to get access to services.

"... Health funding has become diluted by all these multiple layers associated with 21 DHBs. I don't think the health system knows what it's doing."

- © Fairfax NZ News