October 8, 2024 • 6 mins
The Health Commissioner's pushing back on claims Health New Zealand's dealing with a manufactured crisis.
The agency's finances jumped from a half-a-billion dollar surplus to a $1.4 billion deficit in April, now expected to blow out to $1.76 billion.
Some have argued this comes down to its lack of funding.
But Lester Levy told Mike Hosking health expenditure's been increasing year-on-year for a long time.
He says we currently have more revenue going into the agency than we have previously, even at the height of the COVID-19 pandemic.
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Speaker 1 (00:00):
To Health more insight into the troubles at Health New Zealand.
We've got a four hundred and fifty page dump yesterday
that gave insight into tentions about the place. And that's
before we get to the red ink, which is into
the billions. Of course, the man who will fix it
all is Commissioner Lester Levy, who is with us. Very
good morning to you.
Speaker 2 (00:14):
Morning, Mike.
Speaker 1 (00:15):
You're making headway.
Speaker 2 (00:18):
Yes, we're starting to make progress. I think that on
the financial side, we've stabilized the situation and starting to
get relatively small but meaningful reductions. And what stands in
front of us is the cost out program, because first
of all, stabilize the finances and then reduce it. Just
to remember that this is not a random cost reduction.
(00:41):
This is just bringing us back to budget because the
problem has really been a beyond budget expenditure.
Speaker 1 (00:48):
Exactly have you been able to do that comparatively speaking,
given the size of what you're dealing with easily? In
other words, are the savings there to be had if
you look, Yes, I.
Speaker 2 (00:58):
Think the savings are definitely here to be made. It's
always challenging and difficult in a large organization and also
there's a lot of process that we have to follow
because that's really important. So you know, timing is always
a challenge. Time is not my ally on this, but look,
it's all possible. I think the underlying issue you, Mike,
(01:22):
is that I'm driving a process so that the public
can get the benefit of the constant increases in funding
into the health system. And so we have had increases
in funding, increases in staffing, and the outputs have only
increased relatively relatively small increase in output and that's not
(01:46):
going to get the waiting times down, which is what
patients want and need.
Speaker 1 (01:49):
So just reiterate what you just said, because aishaviral will
argue with you. There is an increase in funding. She says,
this is a manufactured crisis. The whole thing's underfunded and
you're not getting the money you used to get. She's wrong,
Is that correct?
Speaker 2 (02:02):
Yeah, so this is not a manufactured crisis. Actually, the
health expenditure has been increasing year on you for many years.
We currently have a revenue into health New Zealand at
a higher level than any time previously in the health system,
including through the height of COVID. And not only that,
(02:23):
we've got a one point four to three billion dollar
uplift this year on operating cost and a one point
one billion uplift on capital costs. That's a significant amount
of money that we need to get value for. So no,
there is an increase, So it'd be completely wrong to
say that anything is contrived. Look, there's a lot of
(02:45):
political issues, there's a lot of arguments, there's a lot
of different perspectives. I can only deal with the reality mark,
and there's an amazing ability in health to take the
anecdote and generalize it. I'm dealing with hard data, and
what that tells us is that difficult as it is,
there's an opportunity to get patients more out of the
(03:05):
resources we already have, and we need to do that
because those patients, their families and communities need that, deserve
that and should get that, and we want.
Speaker 1 (03:14):
To do exactly right. And that's good to hear. How
much of this and what you're facing is politics and
is blown out of proportion, whether it be the Ashavial line,
whether it's the union line about the four hundred million
dollars for the pay equity coming from some other pot
and they're confused, or whether it's the recruitment on the
front line that is or isn't being adhered to. How
much of its people pushing back for political.
Speaker 2 (03:35):
Reasons, Well, I think a lot of it is people
pushing back for vested interests or their own beliefs or
whatever however you'd like to define it. But for example,
the pay equity, that's a timing issue, so that's not
relevant to us. So it could have come earlier, it's
come now. That doesn't make a big difference to what
(03:57):
really worries me, which is a recurrent cost structure. That's
our problem that we have a run rate deficit of
around about one hundred and forty tw one hundred and
fifty million a month that we're losing and we have
to stop that. The other things I think our side shows.
I think that what is really quite important is how
(04:18):
did this actually unfold? Because somebody like myself aren't dealing
with an inherited problem. We did not create this problem ourself,
and that's always quite difficult. But if I could maybe
just address the staffing, because that comes up a lot.
You know, it doesn't matter where you are in healthcare,
wherever you are in the world, people are as you know,
there's always impetus to get more staff, and we want
(04:40):
to have a good amount of staff. But in the
year just finished twenty three twenty four finished in June,
we added to Health New Zealand more staff of all
professional groups than any time in the last eight years.
It's only as far back as we went. We could
go back further. But the number in this last year
(05:02):
is equivalent to the number in the prior to years
added together. And the number of nurses were added in
this last year is more than the total amount of
all professional types in any of the two prior years.
There has never been an uplift in FT full time
equivalence as there has been in this last year. So
that doesn't meet with the prevailing narrative.
Speaker 1 (05:22):
No it doesn't. And you don't hear what you've just
heard widely enough you hear from the unions. Now, do
you feel your winning slowly?
Speaker 2 (05:29):
Well, I think I wouldn't use the word winning at
all in this concept. I feel that we are making progress.
We need to mobilize before we can get as much
momentum as we would like. But my motivation, my mission, Mike,
is to get patients, families and communities what they need
and deserve. There's been a huge amount of money that
(05:51):
has gone into the health system in recent years, hugely significant,
and I don't see the public benefit. I think that
is the number one question. Where is the public benefit
for all of that money. We shouldn't have patients waiting
as long as they are for all sorts of important services.
The shortest wait is the safest wait, and that's my objective.
Speaker 1 (06:13):
Good stuff, good to catch up, Appreciate it very much
and good luck. Le'ster le be the Health Commissioner.
Speaker 2 (06:18):
For more from the Mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
To Health more insight into the troubles at Health New Zealand.
We've got a four hundred and fifty page dump yesterday
that gave insight into tentions about the place. And that's
before we get to the red ink, which is into
the billions. Of course, the man who will fix it
all is Commissioner Lester Levy, who is with us. Very
good morning to you.
Speaker 2 (00:14):
Morning, Mike.
Speaker 1 (00:15):
You're making headway.
Speaker 2 (00:18):
Yes, we're starting to make progress. I think that on
the financial side, we've stabilized the situation and starting to
get relatively small but meaningful reductions. And what stands in
front of us is the cost out program, because first
of all, stabilize the finances and then reduce it. Just
to remember that this is not a random cost reduction.
(00:41):
This is just bringing us back to budget because the
problem has really been a beyond budget expenditure.
Speaker 1 (00:48):
Exactly have you been able to do that comparatively speaking,
given the size of what you're dealing with easily? In
other words, are the savings there to be had if
you look, Yes, I.
Speaker 2 (00:58):
Think the savings are definitely here to be made. It's
always challenging and difficult in a large organization and also
there's a lot of process that we have to follow
because that's really important. So you know, timing is always
a challenge. Time is not my ally on this, but look,
it's all possible. I think the underlying issue you, Mike,
(01:22):
is that I'm driving a process so that the public
can get the benefit of the constant increases in funding
into the health system. And so we have had increases
in funding, increases in staffing, and the outputs have only
increased relatively relatively small increase in output and that's not
(01:46):
going to get the waiting times down, which is what
patients want and need.
Speaker 1 (01:49):
So just reiterate what you just said, because aishaviral will
argue with you. There is an increase in funding. She says,
this is a manufactured crisis. The whole thing's underfunded and
you're not getting the money you used to get. She's wrong,
Is that correct?
Speaker 2 (02:02):
Yeah, so this is not a manufactured crisis. Actually, the
health expenditure has been increasing year on you for many years.
We currently have a revenue into health New Zealand at
a higher level than any time previously in the health system,
including through the height of COVID. And not only that,
(02:23):
we've got a one point four to three billion dollar
uplift this year on operating cost and a one point
one billion uplift on capital costs. That's a significant amount
of money that we need to get value for. So no,
there is an increase, So it'd be completely wrong to
say that anything is contrived. Look, there's a lot of
(02:45):
political issues, there's a lot of arguments, there's a lot
of different perspectives. I can only deal with the reality mark,
and there's an amazing ability in health to take the
anecdote and generalize it. I'm dealing with hard data, and
what that tells us is that difficult as it is,
there's an opportunity to get patients more out of the
(03:05):
resources we already have, and we need to do that
because those patients, their families and communities need that, deserve
that and should get that, and we want.
Speaker 1 (03:14):
To do exactly right. And that's good to hear. How
much of this and what you're facing is politics and
is blown out of proportion, whether it be the Ashavial line,
whether it's the union line about the four hundred million
dollars for the pay equity coming from some other pot
and they're confused, or whether it's the recruitment on the
front line that is or isn't being adhered to. How
much of its people pushing back for political.
Speaker 2 (03:35):
Reasons, Well, I think a lot of it is people
pushing back for vested interests or their own beliefs or
whatever however you'd like to define it. But for example,
the pay equity, that's a timing issue, so that's not
relevant to us. So it could have come earlier, it's
come now. That doesn't make a big difference to what
(03:57):
really worries me, which is a recurrent cost structure. That's
our problem that we have a run rate deficit of
around about one hundred and forty tw one hundred and
fifty million a month that we're losing and we have
to stop that. The other things I think our side shows.
I think that what is really quite important is how
(04:18):
did this actually unfold? Because somebody like myself aren't dealing
with an inherited problem. We did not create this problem ourself,
and that's always quite difficult. But if I could maybe
just address the staffing, because that comes up a lot.
You know, it doesn't matter where you are in healthcare,
wherever you are in the world, people are as you know,
there's always impetus to get more staff, and we want
(04:40):
to have a good amount of staff. But in the
year just finished twenty three twenty four finished in June,
we added to Health New Zealand more staff of all
professional groups than any time in the last eight years.
It's only as far back as we went. We could
go back further. But the number in this last year
(05:02):
is equivalent to the number in the prior to years
added together. And the number of nurses were added in
this last year is more than the total amount of
all professional types in any of the two prior years.
There has never been an uplift in FT full time
equivalence as there has been in this last year. So
that doesn't meet with the prevailing narrative.
Speaker 1 (05:22):
No it doesn't. And you don't hear what you've just
heard widely enough you hear from the unions. Now, do
you feel your winning slowly?
Speaker 2 (05:29):
Well, I think I wouldn't use the word winning at
all in this concept. I feel that we are making progress.
We need to mobilize before we can get as much
momentum as we would like. But my motivation, my mission, Mike,
is to get patients, families and communities what they need
and deserve. There's been a huge amount of money that
(05:51):
has gone into the health system in recent years, hugely significant,
and I don't see the public benefit. I think that
is the number one question. Where is the public benefit
for all of that money. We shouldn't have patients waiting
as long as they are for all sorts of important services.
The shortest wait is the safest wait, and that's my objective.
Speaker 1 (06:13):
Good stuff, good to catch up, Appreciate it very much
and good luck. Le'ster le be the Health Commissioner.
Speaker 2 (06:18):
For more from the Mic Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
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