Surgeries on the line as private hospitals battle DHBs over costs

Private hospitals have issued a veiled threat to the Health Ministry, warning they might not be on hand to reduce the backlog of surgeries cancelled under lockdown.

This would leave the already strained public system having to clear the backlog itself.

The terse response came after a letter, obtained by Stuff, revealed that the ministry was having second thoughts about compensating private hospitals for the costs they had incurred during the level four lockdown.

The ministry had asked the hospitals to stay open and staffed, but largely empty, during the lockdown. The idea was that private hospitals could be used as extra capacity if a wave of coronavirus cases overwhelmed the public health system.

Initially, the ministry said the private hospitals could work out ‘‘partnership agreements’’ with local District Health Boards (DHBs). These would set out what services the hospitals would provide and how much they would be paid.

But at the end of last month the deputy director-general of health, Michelle Arrowsmith, got back in touch with the hospitals, warning that there had ‘‘been a passage of time’’ which meant ‘‘we may need to reframe our joint approach in light of this’’.

Arrowsmith told Stuff that ‘‘DHBs are working to make the most of available capacity, both within DHB facilities, and in partnership with their local private providers’’.

‘‘We cannot comment on funding or any negotiations, as discussions are still under way.’’

If the Government is not able to pay, it would leave private hospitals out of pocket for $30 million of expenses they believe they have incurred by staying empty during the lockdown. Private hospitals draw their revenue from surgeries and consultations, nearly all of which were cancelled when the Government went into level four lockdown.

On April 1, Arrowsmith wrote to Richard Whitney, the president of the New Zealand Private Surgical Hospitals Association, saying the Government wanted hospitals’ ‘‘capacity, capability, resources, and staff be retained as much as possible,’’ during the lockdown in case of a spike in Covid-19 cases.

The ministry said the DHBs would work out a ‘‘partnership agreement’’ with the hospitals.

Deputy director-general of health

This would include roughly how the costs of staying open would be split.

Arrowsmith’s second letter, sent on April 29, cautions that while the ministry had seen the proposed ‘‘partnership agreements’’ submitted to the DHBs, there had been no decisions ‘‘on whether there is funding to support the proposed agreements’’.

‘‘We will continue to progress these discussions, and will provide advice to you as soon as we have clarity. There has been a passage of time and therefore we may need to reframe our joint approach in light of this.

‘‘For that reason, we’re not in a position to provide feedback at this stage on any of the proposals submitted to us’’.

The hospitals have since responded to the ministry. Whitney told Arrowsmith in a letter seen by Stuff that the ministry’s lack of commitment to the funding was ‘‘very disappointing’’.

He said that without an agreement on funding, hospitals ‘‘will have little choice but to revert back to and rely upon a transactional model when working with their local DHBs’’.

This would mean each bit of work being done by the hospitals would have to be negotiated separately with the DHBs, a timeconsuming process, which might lead to DHBs being unable to pass on extra work to private hospitals as they do now.

‘‘A Covid resurgence or a future pandemic, requiring similar sector-wide response, remains a very real risk.

‘‘It is in the interests of all that the ministry establish an enduring agreement that not only serves the immediacy of the here and now but also establishes a framework and agreement on how the private sector would engage in the future,’’ Whitney wrote.

He suggested this could have an impact on private hospitals’ capacity and willingness to help DHBs clear the massive backlog of elective surgeries that had been put off during the lockdown.

Whitney declined to comment for this story. Arrowsmith said private hospitals were ‘‘an important part of our national capacity’’.

‘‘DHBs are working to make the most of available capacity . . .’’

Michelle Arrowsmith