Treasury's searing warning to ministers of Canterbury DHB tactics to pressure for money
The Canterbury District Health Board has been called into question by Treasury, in scathing advice that warns ministers of tactics to "leverage" more public funds and board members unable "or unwilling" to bring management into line.
In advice to the Finance Minister, officials also levelled serious concern over the performance of acting chairman Sir Mark Solomon, who had "not proved effective".
The documents, published by Treasury on its website, lay out a series of advisory documents to the minister and his associates ahead of the May Budget.
"Appointed board members have not been able (or willing) to get the management team and clinicians to adopt adequate management disciplines, leaving the responsibility for holding the line with the partnership group and the Ministry [of Health].
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"The learned behaviour at the DHB is not to make significant trade-offs, but rather to use public pressure and media channels to back Ministers into a corner," officials advised then-Finance Minister Bill English in October.
As late as April – just over a month before new Finance Minister Steven Joyce delivered his first budget – Treasury officials advised him and Health Minister Jonathan Coleman to hold a special meeting over how to improve the DHB's financial management.
Officials suggested two "interventions" available to the Government, but the options were redacted from the documents.
Going on decisions made under previous Governments, the appointment of a Crown Monitor could be one option available.
Board members' public claims that the DHB had been short-changed under the population-based funding formula were not based in sound statistical analysis, Treasury said.
"The fact it's share of national population-based funding has tracked down since the earthquake, mainly reflects its declining share of older New Zealanders; the rest of the country is ageing faster and older people have much higher health costs on average.
"We recognise that there is likely to be mental health service need associated with the earthquake but . . . analysis shows that people in distress in Canterbury are more likely to receive care than elsewhere in the country."
Officials warned ministers that bowing to DHB pressure would only encourage further bad behaviour.
"A similar containment strategy of tactical injections of additional funding in response to Canterbury DHB demands has been employed by the centre for a number of years. This rewards lax financial control and brinkmanship in the annual planning cycle."
Joyce said the advice provided by the Treasury was "robust", but would not comment on whether the Government was considering intervention measures.
Labour health spokesman David Clark said the CDHB was being unfairly maligned, when it was facing real pressure.
"They're wanting to deliver the service New Zealanders expect. And I think most New Zealanders would expect health services to be improving, not to be in retreat as they currently are," he said.
CDHB elected member Andy Dickerson said he had "100 per cent confidence" in chief executive David Meates.
He said it was "crass and despicable" that the documents were released on Thursday, when Meates was attending his mother's funeral.
"If this is an indication of the type of advice Government are getting then it may explain why the level of support the Canterbury DHB has received post-earthquakes has been so abysmal."
Elected member Aaron Keown said the "incredibly offensive" comments amounted to a PR stunt trying to undermine the board's credibility ahead of the general election.
He said Solomon was a very astute and capable chair.
Elected member Anna Crighton said the board had been trying to engage with the ministry.
"We are operating in a financially responsible way but we are not . . . getting enough funding – it's as simple as that."
Recently, elected member Jo Kane attacked Coleman as being "lazy" for only listening to officials, to which Coleman responded that Kane was "always a critic of the Government" like other health board members elected on a "Labour/Green ticket".
State Services Commissioner Peter Hughes was also forced to request DHBs – including Canterbury – that if they had issues with Director General of Health Chai Chuah, they should raise them with Hughes first.
It came in response to repeated calls for Chuah's resignation following a DHB budget blunder that saw $38 million of public funds distributed incorrectly. Canterbury had to relinquish $2.7m it was incorrectly awarded.
WHO MAKES UP THE BOARD?
Appointed members: Sir Mark Solomon (former Ngai Tahu kaiwhakahaere), Barry Bragg (Ngai Tahu Property chairman), Tracey Chambers (public relations company owner).
Elected members: Sally Buck, Anna Crighton, Andrew Dickerson, Jo Kane, Aaron Keown, Chris Mene, David Morrell.
CLAIMS AND COUNTER CLAIMS: THE STORY SO FAR
The Canterbury District Health Board and the Ministry of Health have been at loggerheads for years over funding.
It is underfunded for its post-quake population, faces a $61m deficit this year and possible service failures as a result.
Mental health funding is a particular sore point. The CDHB in March asked for an extra $7.2m to cope with demand, but was turned down.
Elected board members have called the ministry "cruel" and called for director-general of health Chai Chuah to resign over a recent funding bungle.
Staff are at breaking point and the earthquake and hospital rebuild means it faces unique and unprecedented challenges, where pre-quake it was in surplus.
The Ministry of Health says:
Its population-based funding is enough and it is up to the CDHB to manage its budget and staffing.
Canterbury's financial position is the worst of the country's 20 DHBs. A $61m deficit is unacceptable and asking for funding ad hoc is inappropriate.
It has accepted massive CDHB deficits post-quake, including $38.5m for 2016-17, (which blew out to $49.4m) revised its expectations for 2018-19 from a surplus to breaking even and gave the CDB an extra $106m to meet earthquake recovery costs.
A PwC review last year recommended ways for the CDHB to save money, but it was not giving updates on progress.