New board for Health NZ, but we haven’t seen the last of Levy

Friday, 7 March 2025

Health Minister Simeon Brown has signalled the beginning of a return to normal governance for Health NZ - Te Whatu Ora and the end of Commissioner Lester Levy’s reign.

It comes after reports raised concerns about the behaviour of some of the commissioner’s inner circle, including one being censured as an auditor, another facing claims of bullying and another being the subject of a physical contact complaint.

Following a speech on Friday to Auckland’s BusinessNZ Health Forum, Brown told media he had “full confidence” in Levy’s work and defended Reti’s decision in July last year to appoint Levy to overhaul the $30 billion agency.

Brown later told The Post he expects Levy will have an ongoing role at the agency - but in what capacity, he wouldn’t say.

Asked if Levy will be chair of the new board, Brown said: “He will have a role to play. What that role [will be] - we’ll work that through.”

Levy’s overhaul has included major restructuring and to date more than 500 non-clinical staff have taken voluntary redundancy and hundreds of other roles are set to be disestablished.

Brown said he expects these proposals to be finalised by May this year. Some face legal challenges from the Public Services Association.

In his speech, Brown said he was taking Health NZ “back to basics“ through a set of measures, including partnering more closely with the private sector and establishing a new Health Infrastructure Entity.

“Today, I have issued a new letter of expectation and Health New Zealand has released its delivery plan to reflect this.

“Now that the plan is set, it is time to begin the process of transitioning to traditional governance.”

He would bring back a board, with nominations set to open for members in the coming weeks.

He told media he wanted “the best people in New Zealand” to sit on the new board.

Brown also said a new, independent report by Deloitte delivered a “damning verdict” on how costs spiralled out of control and oversight broke down before the Government appointed Levy.

“The agency that was supposed to run our health system had no idea how it was spending its money or the results it was achieving.”

He said there were “no systems in place to manage funds appropriately”.

“Basic financial oversight collapsed, meaning no accountability, no performance tracking, and no ability to measure success or failure.”

Private sector partnerships to expand

He outlined five priorities, including a major change to how Health NZ interacts with the private health sector.

He would end the use of “expensive ad hoc, shorter-term contracts” with the private sector for elective surgeries and expected Health NZ to negotiate longer-term, multi-year agreements which would be better value.

“Long term, I want as much planned care as possible to be delivered in partnership with the private sector, freeing public hospitals for acute needs.”

He stressed the system remains publicly funded “but this will allow Health New Zealand to leverage private capacity to reduce wait times for patients”.

There were more than 27,000 patients who had waited more than four months for elective surgeries as of September 2023 - and it had “unfortunately grown” since, he said.

Health NZ would invest $50 million between now and the end of June this year to reduce the backlog of people waiting for elective surgeries which will allow an extra 10,579 procedures to be done by the middle of this year.

But the Public Service Association said the increased reliance on the private sector should set off alarm bells.

'The Government’s privatisation agenda has been well and truly exposed in Minister Brown’s priorities,' PSA national secretary Fleur Fitzsimons said.

'These amount to a slippery slope to an American style health system and the continued running down of our public health system. Alarm bells should be ringing.'

‘All financing options on the table’ for infrastructure

Brown also announced a new separate Health Infrastructure Entity to manage and deliver physical and digital assets. It will be housed under Te Whatu Ora.

It’s understood this would manage the $6.3 billion worth of health infrastructure projects in the pipeline, as well as publish a 10-year infrastructure plan.

Achieving this would involve “putting all funding and financing options on the table,” Brown said - a strong signal to public private partnerships.

Digital infrastructure was also fragmented with an estimated 6000 applications and 100 digital networks, he said.

“That equates to roughly one application for every 16 Health New Zealand staff members, which is unsustainable.”

Brown’s speech did not address what this means for the agency’s data and digital team, which is to be shrunk by more than 40% under an existing restructure proposal.

But he told media afterwards that the proposal was being reviewed.

“I have asked Health NZ to look at [the data and digital proposal] and to assure me that is going to deliver for patients.

“We do need a transition to proper 21st century systems at Health New Zealand and that is going to take some time.'

He also expected Te Whatu Ora to deliver a nationally planned and consistent, but locally delivered, health system.

“No more excuses. We measure success in one way: better outcomes for patients.”

Local plans, centralised core services

He expected core services such as infrastructure, data, digital, HR, and communication to sit at head office - currently based in Wellington. National executive leadership will be focused on national programmes, shared services, overall governance and planning and empowering districts, he said.

“I have directed the commissioner to accelerate the shift to local decision-making and service delivery, and set a requirement for local delivery plans to be developed. I expect this to be done by July.

“This will enable local leaders to plan effectively, be clear about their budgets, allocate resource to where it’s most needed, and deliver better outcomes for their communities.”

He expected strong regional coordination to support local delivery, with accountability flowing from the national executive level to the frontline.

Another priority was ensuring timely primary care, underpinned by the announcements Brown has made this week on more nurse practitioners and nurse prescribers, support for training and placement for GPs both in New Zealand and from overseas, incentives for GP clinics to hire graduate nurses and a new 24/7 telehealth service.

He would also prioritise ED wait times through instructing Health NZ to review its systems from admission to discharge to improve patient flow, empowering clinicians at local levels to fix bottlenecks and hiring and training more doctors.