Health commissioner stakes job on maintaining front line budget

Saturday, 12 October 2024

Professor Lester Levy says he and the chief executive of Health NZ have made a commitment to protect the front line, but there may be some 'marginal changes' to front line work.

The man tasked with making up to $2b in savings at Health New Zealand has staked his job on a promise to protect the front line budget, but says clinical roles and services may still change.

Professor Lester Levy, the Commissioner of Health NZ – Te Whatu Ora made the promise, somewhat reluctantly, in an exclusive interview with The Post.

Levy has in recent days spoken of some “rejigging” of the front line. He said there were no immediate plans for a front line restructure but said there could be small changes to individual positions or services.

“Something may drop in, something may drop out, maybe [there’s] a technology change. You can't say … every single person who's in the position they're in [is] going to continue in that position. That will largely be the case. But the amount that we spend on the clinical front line is what we are protecting.

“There may be marginal changes around things. Things may be done differently between regions, within regions. There may be some rationalisation, there may be some additions.

“But ultimately we are protecting the expenditure and looking to actually find ways, despite difficult financial services circumstances, to strengthen the front line.”

Health Commissioner Professor Lester Levy says he has made a commitment, as has the commissioner group, to protect the front line.

At first, when asked to stake his $320,000 job as commissioner on this promise of “protecting the expenditure“ he said: “I couldn’t do that, because there could be a massive economic recession, the geopolitics could put the world into all sorts of turmoil.”

But when asked if he would step down if he made cuts directly in his work as commissioner, he agreed, but quickly added, “I don’t think these are actually helpful questions”.

“The bottom line is, I have made a commitment, as have the commissioner group and the CEO to protect the front line.”

Levy said the thousands of nurses who were recruited “beyond the budget” still had a place in the health system but hinted at changing recruitment processes to ensure greater experience on the floor.

“There is … they’ve been recruited… we may have nurses in excess of our budget, but we still may not have the required experience where we actually need it. So we need a much more strategic approach to how we actually recruit.”

In the year to June 30, 2024, Te Whatu Ora hired 2432 nurses more than were budgeted for – and chief executive Margie Apa told the health minister in March that this “over-recruiting” was the key financial risk hurting a planned surplus for the year.

While over budget, the record nursing recruitment was a good thing for safety: “We have addressed a long-running problem of a significant nursing shortage,” acting chief executive Dale Bramley told Health minister Dr Shane Reti in May.

The “long-running problem of a significant nursing shortage” was addressed through the over-recruitment of nurses beyond the budget, the acting chief executive told the health minister in May.

“We now have levels in key parts of the workforce that improves staff wellbeing and provides greater scope for appropriate breaks and taking annual leave.”

The revelations were contained in a 454-page document dump this week from Health NZ containing letters, briefings and exchanges between health officials and ministers dating back to October 2023 about the agency’s finances.

Also in May, Bramley told Reti that poor IT systems were a core reason nurse recruiting outstripped the budget.

“The inadequacies in system, processes and capabilities do not let Health NZ fully plan, budget and forecast personnel costs,” Bramley said.

But Levy rejected this.

“The systems are not perfect, but … when the systems aren't at the level of sophistication that may be desired or necessary, then you need to have different and more internal controls or oversight. I don't accept the fact that it's just a system issue.”

When asked if this might be a tall order in an organisation with 80,000 employees, Levy acknowledged it was difficult to keep track, but believed it was “quite possible”.

What was expected to be a $587m surplus at the time, became a $934m deficit by June 30.

The projected deficit for the agency by June 2025 is now almost $1.8 billion, a sharp jump from the $1.4b originally cited when Levy was appointed commissioner in July.