ASMS Direct - Issue 2010-9
11 August 2010
Dear Member
We welcome any feedback on the contents of the 9th issue for 2010 of ASMS Direct, our national electronic publication. This copy of ASMS Direct focuses on:
1. Beyond the Politics of Livid Pus
2. Resignation of Capital & Coast Chief Executive: A “Black Day”
3. ASMS Checkpoint interview
4. CTU comment on Whelan resignation
5. Medical Council statement on new Pacific Peoples Resource
6. Health Minister announces medicine recall guidelines review
1. Beyond the Politics of Livid Pus
Attached for your information is a speech you might be interested in reading titled From the Politics of Livid Pus to the Politics of Nudging which I gave to the Hospital and Community Dentistry Conference in Queenstown on 31 July. After a discussion on a family scandal the speech focuses on central leadership in the health system, where is clinical leadership going, and the implications of the DHBs’ specialist workforce capacity crisis in the context of achieving important government health policy objectives. It concludes by commenting that the government’s slogan of ‘Better Sooner More Convenient’, risks becoming something quite different if the specialist workforce capacity challenge is not addressed.
2. Resignation of Capital & Coast Chief Executive: A “Black Day”
Last week, senior doctors and other staff employed by Capital & Coast DHB were stunned to learn of the unexpected resignation of their chief executive, Ken Whelan. The consensus assessment of Mr Whelan’s performance of senior medical and other staff is that within a relatively short period of time he had succeeded in going a long way to turn around an environment of malaise and low morale in the DHB. One leading specialist described his resignation to the ASMS as a “black day” for Capital & Coast.
Its importance is wider than simply Capital & Coast. There are two main reasons for his resignation – the government’s financial squeeze on the DHB and his health – but of the two, the former had greater influence. The financial squeeze is in part due to the government’s decision to cut the rate of funding increases to DHBs by around 50%. But, in addition, Capital & Coast is hit by the effect of being the most recent DHB to have completed a major capital works development, the new regional hospital, which has blown out its deficit. It is perverse that the way the building of new hospitals is funded becomes a financial penalty for DHBs rather than a positive investment. This has implications for all DHBs.
Below is Ken Whelan’s memo to all Capital & Coast staff on 5 August which raises some interesting issues and perspectives:
Hi Folks
Just a brief note, before the rumour machine winds up, to let you all know that yesterday I tendered my resignation with the Chairman of our Board. I need you to know that I have thoroughly enjoyed the privilege of working for you over the last two and a half years and I think during this time together we have made a difference for the people of our region.
When I look back on some of the achievements you have been part of they include:
· Moving safely into the new regional hospital whilst maintaining services. This was indeed a remarkable feat.
· A genuine attempt from my team to better engage clinical staff in decision making. As an example in the Senior Hospital Management team more than 50% of its members are clinical staff.
· Better utilisation of Kenepuru to ensure members of our community who live up that way can access as many services as possible closer to where they live. I see this as very much evolutionary and there is much more development that could occur. Likewise I see some real opportunities up in the Kapiti for increasing service delivery.
· A strong existing Primary Care service which I believe has been further built on over the last two years and certainly more integrated with secondary care.
· Catch up on deferred maintenance on buildings other than the new hospital to ensure staff have a functional work environment.
· Despite the heavy workloads by far the majority of targets set have been met or exceeded.
· "Efficiency". When one looks at the operational debt of the DHB and then adds the debt around the new hospital at one point C&C DHB was looking at an $80-90 million dollar deficit. This year the deficit will be around $40 million and most of this relates to the debt associated with what I call the "concrete" i.e. the new hospital. The "concrete" debt is the way governments choose to fund capital in this country and sits mostly outside the PBFF [Population Based Funding Formula]. If one therefore separates this component and compares C&C DHB revenue/costs with like sized organisations, C&C DHB is within the average efficiency of the sector and in some areas in the upper percentile.
Going forward my view is that this community and indeed you as staff should not be expected to wear this additional cost which will have a negative impact on services should C&C DHB have to meet this debt out of operational monies.
So why am I leaving:
Two reasons really:
Firstly, I think the organisation is at a turning point in that as I have pointed out when compared to other DHB's like for like we are efficient and yet there is all this debt remaining due as I have said to the "concrete", much of this sits outside the PBFF and by default becomes a forced efficiency adjustor. I have always said if we can become efficient operationally I should be able to work through the outstanding debt with officials. Well I think we are now much more efficient but I have been unable to make an impact on the way Capital is funded therefore in many ways I have not been able to achieve what I set out to do, so perhaps some new eyes may be able to carry on the work we have started and in doing so get some acknowledgement that the new hospital is a regional asset and the local population should not have to bear the burden of the ongoing capital related debt. Added to this is, I guess, the fact that I cannot see where any more major efficiency can come from without negatively impacting on services. That said, maybe I am missing something and fresh eyes will either find efficiencies I have missed or indeed not find any; either way would be a useful outcome for the DHB.
Secondly, following a recent health scare I have taken some time out to reflect and as a result of that reflection have recalled that ongoing success in the job we choose to do often depends on work life balance. Unfortunately in this role I have struggled to achieve the lifestyle I enjoy and indeed need, to keep my life in balance. I have tried to make adjustments as I do enjoy working with so many of you in what I believe essentially is a competent and caring organisation where staff make a genuine effort to put the patient first. However, I have not been successful and as such recently my life is anything but in balance and therefore I need to make some changes, for myself and my family, sadly this is one of those changes.
As one member of the 5000 staff that make up our organisation I have enjoyed the opportunity to work with you. We may not have always agreed but I think the one thing we have all strived for is to positively impact on the lives of the communities and patients we serve. At the end of the day nothing else really matters and when it comes to provision of high quality health services whether that be Primary care or Hospital care, based on what have experienced in other places I have worked, this organisation second to none.
I intend to be around for a few more weeks and in that time hope to get around as many of you as I can to personalise farewells. Although I am looking into a few options I do not have another job to go to and intend to take some time out before moving onto the next part of my journey.
Good luck to you all.
3. ASMS Checkpoint interview
Immediately after the resignation of Mr Whelan was announced I was interviewed by Radio New Zealand on its evening current affairs Checkpoint programme (5 August). Below is a slightly edited transcript:
A: Certainly, I think that it's very easy to underestimate the challenges that actually face our chief executives. They are high. It is highly pressured work, they work very long hours in the main, and that's sometimes not fully appreciated.
Q: And it's clear from this, his parting comments, that the job has become pretty frustrating?
A: Well, I think it's very clear from what Ken Whelan has said, is that he's frustrated because of the continual pressure to make cuts and the very firm belief, which senior doctors at Wellington Hospital would endorse, is that further cuts will compromise patient services, and he doesn't want to do that. So he's making in his own way as best he's able, a bit of a stand. And I think we need to listen to this. Ken Whelan has proven to be a very successful chief executive. He has really empowered and engaged senior doctors and other health professionals in that DHB. He's turned the place around. It's in a much more robust position than it was when he came into the job; really go ahead. And somebody with that vision and ability is giving a very clear warning: cut any more and patient services will be compromised.
Q: And the big problem here seems to be the debt from the new hospital?
A: Exactly, and it's a perverse incentive that we have that to build a very good new facility, a new hospital, particularly a regional hospital, is actually a financial penalty. It's something that actually should be rewarded but because of the way in which we fund our hospitals, and with the use of capital charges…on top of the debt they have to repay, basically what it does is it increases the deficit. At the same time as having this increasing its deficit, all DHBs, including Capital and Coast, are…now receiving half the funding increase that they normally would have received.
Q: His big argument is that the new hospital is a regional asset; Wellington people shouldn't be the only ones paying for it.
A: Well, that's…a bit of an argument between the DHBs and I can't comment on that, although, ultimately, it comes down to the fact that the pool is not big enough to sustain a regional hospital development for Capital Coast and other DHBs within the region while maintaining their existing services.
Q: No more major efficiency can come without negatively impacting on services. That's a pretty clear message, isn't it?
A: It's a very clear message, and it would be a very foolish government that did not listen to that. Further, it's my belief that senior doctors overwhelmingly would endorse his assessment.
Q: And he can't find any other way? Fresh eyes...
A: Well I'm sceptical about that myself, and we've got to remember than Ken Whelan is very experienced. He was a chief executive for Northland in an earlier life, and also in a large hospital in Townsville in Australia. He's fiscally prudent by his very nature, and if he can't do it, he can't see it, then it's not likely that anyone else will see it without actually missing something in the process that compromises health care.
Q: And it looks like there will be more cuts then? That's what's on the cards?
A: Well, unless something changes, I think that's quite likely, and I think the system has been squeezed too much, too quickly, without sufficient consideration that short-term decisions generally have negative, long-term consequences and its patients are the ones who lose out.
4. CTU comment on Whelan resignation
On 6 August the Council of Trade Unions (CTU) made the following media statement on Mr Whelan’s resignation under the heading ‘DHB head resignation a symptom of inadequate health funding’:
The resignation of the Chief Executive of Capital and Coast District Health Board, Ken Whelan, unfortunately confirms the CTU’s analysis of the funding shortfall in the May Health budget. That analysis showed that the budget required the system to provide new services but on the same budget as last year in real terms. That meant a reduction in other services, and no relief for the District Health Boards (DHBs), which were already running significant deficits.
Unfortunately we can expect more such stress. Mr Whelan has brought the issue out into the open, but other DHBs and health services will attempt to struggle on. The public will see it in service deterioration, reductions in services, new user charges or increased DHB deficits.
Unaudited DHB financial results for the year to June 2010 show a combined deficit of $99.3 million. Largest deficits were at Capital and Coast DHB ($47.5 million) and Southern DHB ($15.2 million). (DHB financial summaries are at http://www.moh.govt.nz/moh.nsf/indexmh/dhb-financialreport-0910.)
The CTU’s analysis of the Health Vote in the 2010 Budget found it was barely adequate to keep up with rising costs and population growth and ageing, but not adequate to fund new treatments. Instead it funded increases in services at the cost of cuts in others. In addition there would be substantial new cost pressures as a result of higher than forecast inflation and the movement of ACC costs to the health system. Our pre-Budget analysis found that $555 million was required in operational funding to just keep up with rising costs, population growth, and the growth in demand for health services such as that due to availability of new treatments. Of that, $512 million was required simply to keep with costs and inflation. The Health Vote increased by only $508 million, but required $158 million in new services. The gap is reflected in a $111 million shortfall in the funding we calculated was required for…DHBs. We estimated that an additional $454 million was required, but only $343 million was forthcoming. That means existing deficits cannot be addressed, and it is inescapable that the position will worsen.
For details of the CTU Budget analyses, see http://union.org.nz/health-working-papers
5. Medical Council statement on new Pacific Peoples Resource
On 6 August Medical Council Chair Dr John Adams announced the release of a new Pacific peoples resource, Best health outcomes for Pacific Peoples: Practice implications, by the Minister of Pacific Island Affairs, Hon Georgina Te Heuheu. Dr Adams said:
Research shows that doctors who are familiar with their patients’ cultural heritage are likely to offer improved patient care, making cultural competency essential for high quality healthcare. For the Medical Council this resource is also about recognising the very real disparity of health outcomes for Pacific people compared with other New Zealanders.
In New Zealand, doctors who identify as Pacific Islanders make up 1.4 percent of the medical workforce – and it’s decreasing. By 2026, it is projected that Pacific people will be 10 percent of the population, compared to 6.9 percent in 2006. It is clearly essential that all doctors have some understanding about Pacific Island peoples, their culture and their health issues.
The health outcomes of Pacific peoples are worse when compared with the general population in New Zealand. These outcomes are reflected in lower life expectancy, higher rates of chronic disease, and premature disability.
Pacific patients expect different things from their doctor than non-Pacific families; for example, they may place a high value on spending time getting to know the doctor. If this does not happen, or if the patient feels rushed, then Pacific patients may develop a negative picture of their doctor, which in turn can affect their use of the health system.
There is a need now for us in partnership with the different Pacific communities to face the issues affecting Pacific peoples, whether they are health, education, employment or welfare. In the area of health, it is my sincere hope, and that of Council staff that this resource will make a real difference to Pacific peoples health.
The goal of this booklet is to help doctors to achieve greater awareness of the cultural diversity and the place of Pacific peoples in Aotearoa New Zealand. The material provides both general guidance on Pacific peoples cultural preferences and specific examples around key issues. It is our view that cultural competency is essential for high quality healthcare.
6. Health Minister announces medicine recall guidelines review
On 4 August, Health Minister Hon Tony Ryall announced a review of the medicine recall guidelines with the following media statement. It follows a number of medicine recalls earlier this year.
The Ministry of Health has been looking at processes, procedures, contracting arrangements and the level of compensation for pharmacies when they are involved in recalls.
As a result, Medsafe has revised the recall guidelines, which have been released today for consultation. In parallel, the Ministry of Health is continuing to work on the issue of compensation for costs incurred by health professionals participating in a recall.
The revised guidelines called ‘Uniform Recall Procedure for Medicines and Medical Devices’ along with details on how to make a submission is available at http://www.medsafe.govt.nz/hot/Consultation/contents.asp
The closing date for submissions is 27 August 2010, and both the guidelines and compensation work are expected to be finalised before the end of the year.
Ian Powell
EXECUTIVE DIRECTOR
