28 August 2009
Dear Member
We welcome any feedback on the contents of the 14th issue of ASMS Direct for 2009. This copy of ASMS Direct focuses on:
1. The report of the Ministerial Review Group (Horn review).
2. The DHBNZ medical workforce ‘road show’.
3. Telecom dispute.
4. Annual Conference reminder.
1. Ministerial Review Group (Horn) Report – restructuring, more bureaucracy, possible privatisation
The report of the Ministerial Review Group (also known as the Horn report) to the Minister of Health is a mixed bag. The review group was handpicked by Hon Tony Ryall, including its influential chair, Murray Horn (banker, Business Roundtable member and former Treasury head). The review team commenced work early this year and its report was forwarded to the Minister by 31 July and publicly released by him earlier this month. Its 170 recommendations are currently being considered by government. Cabinet is expected to firm up on its response to these recommendations in around six weeks’ time.
Despite the above sub-heading the report does have some positive features including reinforcing the emphasis on enhancing clinical leadership in DHBs, clinical networks, patient management systems, national ‘back office’ functions (eg, payroll), and national procurement. There is, nevertheless, an aspirational ‘magic wand’ feel about some aspects such as the latter three examples.
However, there are key parts which threaten the public health system and, if accepted, would involve the breaking of government election promises. In particular:
Proposed National Health Board: new powerful bureaucracy
The report recommends major restructuring by reducing the role of the Ministry of Health and creating a new central health bureaucracy, the National Health Board, with considerably greater powers over what DHBs do. This new powerful body is an expanded version of the old Health Funding Authority created under the business model of the 1990s but disbanded in 2000 largely due to duplication and to the rejection of that model. But the new bureaucracy will have greater powers than its ideological predecessor. These include overseeing DHBs and at times determining what they do and how they do it. Proponents of this new bureaucracy claim it is simply changing structures at a government level. But this alone is significant and the restructuring will have a direct effect on DHBs.
This new bureaucracy would be a crown entity rather than government department or ministry thereby being more arms length from normal government accountability. Part of the justification is that the Horn committee wants its recommended bureaucracy not to be subjected to “lobbying” from ‘outside” organisations which, by implication, includes the ASMS, NZMA and the colleges as well as the NZNO.
The Horn report suggests a sneaky move to avoid parliamentary and public scrutiny of its recommendation. When new crown entities are established enabling parliamentary legislation is required. This means that the bill seeking to create them comes under parliamentary examination and the public (including, in this case, health professional organisations) have the right to make submissions. However, in a dubious slight of hand the Horn report recommends converting an existing very small crown entity responsible for the very narrow function of managing DHB debts into the much larger and fundamentally different new National Health Board. This dubious move, if accepted by government, would mean avoidance of normal parliamentary and public scrutiny.
In the last election the National Party promised no restructuring in the health system. Government acceptance of the recommendation to form a new National Health Board, with all that goes with it, would mean a breaking of this promise.
Increased health bureaucracy
The National Party campaigned in the last election over reducing the costs of health bureaucracy including time consuming wasteful bureaucratic processes. However, the Horn report’s recommendations, if accepted, are much more likely to increase bureaucratic costs and wastage. While there would be a downsizing of the Ministry of Health, this would be more than offset by the establishment of the new powerful centralist National Health Board. Further, the Ministry would still remain and gain the extra role of monitoring the performance of the new creation.
Further, other national agencies are proposed including a new quality improvement crown entity and a national shared services agency to handle ‘back office’ functions. These two recommendations may have merit and deserve further consideration (in contrast with the larger National Health Board). But one net result would be more bureaucracy along with the increased risks of competing bureaucratic fiefdoms, increasing monitoring, and duplication.
If the government was to accept these recommendations, especially the formation of the National Health Board, then its election promise on health bureaucracy would be broken. What makes this specific recommendation more perplexing is that much of the functions proposed for the new board could be carried out by the existing Ministry of Health with a little internal realignment of roles and being given more authority. It would also be more accountable than the proposed new arms length crown entity. Creating a new additional bureaucracy rather than making better use of an existing one seems motivated more by ideological considerations rather than sensible public policy.
Increased privatisation threat
Prior to the last election, the National Party rejected suggestions that it would privatise public hospital services. Instead, when promoting greater use of the private sector, this was explained in the context of where public hospitals lacked capacity in certain areas such as increased elective volumes. In other words, the private sector was only to be used for additional work that public hospitals were genuinely unable to do, not as an alternative to public hospitals.
However, the Horn report seeks to break from this position by recommending the approach of the 1990s business era of treating public hospitals and the private sector equally for services normally provided by public hospitals. If this new (or resurrected) policy was adopted by the government it would undermine the commitment to maintaining and building integrated public hospital capacity and increase the likelihood of privatisation, contrary to the government’s election commitment.
Risks to primary care
The Ministerial Review Group recommends several changes to primary care, including Primary Health Organisations (PHOs). It edges in the direction of the large business side of general practice, particularly more entrepreneur IPAs. Smaller PHOs which service poorer communities are known as ‘access’ PHOs and received an additional funding loading as a consequence. Many salaried GPs who are also ASMS members work in these ‘access’ areas. The recommendations of the Horn Committee suggest that these ‘access’ PHOs may not survive.
The ASMS will make representations to government outlining our concerns and the risks to the health system (and to government credibility) of some of the Horn report’s key recommendations. The full report can be downloaded from:
http://www.beehive.govt.nz/release/ministerial+review+group+report+released
2. The DHBNZ medical workforce ‘road show’
DHBNZ is organising a ‘whistle stop’ tour of DHBs by Professor Des Gorman in what it glamorously describes as a ‘road-show’. Professor Gorman has recently been appointed by the Minister of Health to chair his new clinical training board. The apparent purpose is to discuss a number of recently released medical workforce reports including those of the SMO and RMO Commissions. Unfortunately the organisation of the ‘road-show’ is top-down and in some DHBs at inconvenient and impractical times. To be fair to DHBNZ this has been politically imposed although it still could have been handled much better. The ASMS has had some success in providing a little more lead-in time for DHBs but the schedule has been determined by DHBNZ without regard to the convenience and suitability for individual DHBs.
Despite this the ASMS would encourage members where practical and where not at the expense of your patients’ needs to attend in order to get a better idea about what is being said at a government level about these reports and to have an opportunity to have your say.
3. Telecom dispute
Attracting much public prominence now is the dispute involving around 700 line engineers now facing redundancy from Telecom. They are represented by the Engineering, Printing and Manufacturing Union (EPMU). Telecom’s intention is to terminate their employment and give them the option of being engaged as ‘independent’ (dependent) contractors with an Australian firm Visionstream. The contact being offered to them has been analysed by an independent accountant who calculated that they could lose 50-65% of their income. Visionstream is also refusing to negotiate with EPMU.
This is seen as a landmark dispute in that if Telecom succeeds it might inspire other companies to declare staff redundant and leaving them with the option of accepting both an inferior employment relationship and inferior terms and conditions of employment with a sub- contractor. It is not beyond the realms of possibility that a DHB might contemplate this, especially under fiscal pressure.
This dispute falls outside the ambit of the Association to take a formal position on although there are concerning features. The CTU is supporting the EPMU’s fundraising campaign. If you wish to make a personal donation to assist the line engineers and their families the internet banking details are (I have made a personal donation):
- 02-0568-0177685-00
- Bank of New Zealand
- Reference: Telco
4. 21st ASMS Annual Conference, 3-4 December 2009
The 21st ASMS Annual Conference will be held in Wellington (at Te Papa) on 3-4 December (Thursday-Friday). It is a unique opportunity to discuss the exciting mix of industrial, health policy, medico-legal and political subjects. Information on registration was provided in the recently distributed June issue of The Specialist. If you are interested please contact ASMS Membership Support Officer, Kathy Eaden ke@asms.org.nz.
Preparation for our national DHB MECA negotiations early next year will be a central theme of the Conference. Another feature will be an address by Minister of Health, Tony Ryall.
Best wishes
Ian Powell
EXECUTIVE DIRECTOR
