Rob Campbell: Former Health NZ Chair on the deficit figures for Health NZ

The former Health New Zealand chair says a lot of the estimate issues we're seeing carry over from the DHBs.  

The health service has reported a $1.1 billion deficit – lower than the $1.76 billion it was initially signalling.  

The revised deficit was revealed at yesterday's review of the Ministry of Health, and has prompted backlash from opposition MPs.  

Former Chair Rob Campbell told Ryan Bridge that Health New Zealand's trying to pull together figures from the previous system.  

He says the main people in control have been the Ministry of Health and Treasury, which haven't had any changes made to them in this respect. 

Campbell says that Health New Zealand, the Commissioner, and whoever's involved in its organisation, can't staff-cut and staff-restrict costs to make this better. 

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Episode Transcript

Speaker 1 (00:00):
It turns out that Health New Zealand's books aren't quite
as bad as we thought, but the numbers are still
pretty terrible. The projected deficit for the twenty four to
twenty five financial year has reduced from one point seven
billion to one point one billion. In October, they said
it'd be one point seven. Now they're saying it'll be
one point one. The agency has extended its cost cutting
regime by another year to twenty twenty seven, when it's

(00:20):
expected to return to surpus. Rob Campbell is the former
Health and z chaeries with us this morning. Rob, Good morning,
all real a right, good to have you on the show. Hey,
what are you reading into this? I mean, how can
they not get the numbers right? Two months ago we
were told that there would be they would need five
hundred million extra than they are actually going to need.

Speaker 2 (00:42):
Yeah, it's pretty deatic, isn't it. But you've got to
see the history. I'm afraid to be a bit boring this.
It's not an issue that was created by Tafatu Wara.
It's an issue that drags over from the previous arrangements
between the district Health Boards and the Ministry of Health
and in some ways, it's part of putting it right.

Speaker 1 (01:03):
How much more do we need to spend to get
it right? I mean, how much is going to be
enough in health when we're spending thirty billion a year.

Speaker 2 (01:12):
Well, the truth is no one knows the answer to
that question. But what we do know is a number
of things. First, there are some things like the big
one is the holiday pay issue, which has to be
done because it's a legal requirement. No one quite new
and probably still does know exactly what the cost impact

(01:33):
of that is, but when it is finally ascertained, it's
a number that has to be found. Secondly, there are
some increases which derive from basic requirements, again legal ones
such as pay equity and other pay type requirements, which
again have to be met and can be projected, but

(01:56):
we're badly projected in the previous estimates that were they.
Then we come into the area of much bigger arns,
and these are particularly We know there is something like
fourteen billion dollars worth of undone sorry deferred maintenance within
the system because of the way it was run before.

(02:17):
This is a terrible load on the system. It can't
all be dealt with in one hit, And maybe some
of it will never be dealt with. But that is
an issue which cutting staff and making the other cuts
that are being made simply can't do anything about. And
then finally there is the new capital requirements outstanding in
the new hospital and the needn in other places again

(02:38):
where need has been demonstrated but the system has not
been estimating or controlling its costs very well. This is
all an outcome of what we needed to change.

Speaker 1 (02:47):
Yeah, but those estimates that you're talking about very quickly,
who's making these estimates? How are they getting them so
wrong or old.

Speaker 2 (02:56):
To fartow work. It's caught in the middle of this.
Tafatowora is trying to pull together figures from the plenty
eye previous districts sports. That's one part of it, right,
But the main people who have always been in control
of this have been the Ministry of Health and Treasury.
They're the people who have had no changes significantly made
to them in this respect. Help Ministry lost some stuff

(03:16):
to fight to Wara, but it's basically the historical people
who have got the main responsibility to this, and the
key thing is to fight or the commissioner or however
it is organized, can't staff cut and staff restrict costs
to make this better.

Speaker 1 (03:34):
Yeah, thank you very much for being with me this
wanting to appreciate it. Rob Campbell, former Health New Zealand chair,
on the deficit reduction. Deficit good, but deficit big still bad.

Speaker 2 (03:45):
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