Savings unlikely in reforms
District health board members – who may soon lose their jobs as part of a radical health system overhaul – are costing the country more than $5.5 million a year.
But experts say this is a drop in the bucket given New Zealand’s total health expenditure is about $20 billion – and that has been predicted to increase with the proposed new national health agency.
Health Minister Andrew Little last week announced plans to abolish the country’s 20 district health boards (DHBs), which are governed by 209 board members, and replace them with a central agency and four regional bodies.
Each DHB has 11 members, including up to four appointed by the minister and others elected every three years.
All DHB members were responsible to the minister rather than their local community.
Fees paid to chairpersons, deputy chairpersons and members varied according to the size of the DHB area and ranged from about $13,000 to $80,000 for chairpersons, and $6510 to more than $40,000 for members.
The health minister decided how much each DHB member received based on a fees framework for board members of Crown entities.
DHB members were required to spend about 30 days each year on board business, including preparing for monthly board and committee meetings.
Health systems expert Professor Robin Gauld, of the University of Otago’s Centre for Health Systems and Technology, said he suspected the reforms would not result in any cost savings.
He hoped more would be spent on developing skills and expertise within the public system rather than on external consultants.
The Government had spent more than $5m to fund a health system review transition unit, which employed 38 people – of whom 25 were consultants from EY, Buddle Findlay, NZIER, Sapere Research Group, Senate Communications Ltd, Sue Suckling Holdings Ltd and Finora Management Services Ltd.
The two-year health and disability system review led by Heather Simpson cost $9.5m.
Gauld said his research, which included work yet to be published from last year, showed spending on external consultants by DHBs had more than doubled – from about $70m to $170m – in five years. He believed money spent on health board fees should go towards building ‘‘operational excellence’’ in health.
‘‘That would be far better than [spending] on people sitting around board tables, half of whom hardly said anything.’’
Council of Trade Unions economist and policy director Craig Renny said any savings made through the reforms were likely to be offset by the cost of the transition and ‘‘historical DHB deficits’’, which were currently about $800m.
It meant additional resources for health in next month’s Budget would be essential, he said.