The New Zealand Public Health Service is imposing major budget cuts in hospitals

The body that runs New Zealand’s public health system, Health New Zealand Te Whatu Ora, has ordered a series of “emergency measures” to get spending under control, claiming it cannot enter the new financial year with deficits.

Health workers protest in Wellington, May 16, 2022. (Photo: Association of Public Services)

Last Friday, Health NZ said the country’s public hospitals were told to save a total of $105 million by July. The announcement was forced by media leaks showing that twelve districts had to reduce a collective “overspending” of $80 million.

The cost cuts come amid a sweeping attack on the public sector as part of the far-right National Party-ACT-NZ First government’s austerity agenda. More than 3,500 public sector jobs have been cut in weeks as Finance Minister Nicola Willis imposes annual cuts of $NZ1.5 billion, up to 7.5 percent per ministry. The Ministry of Health has already cut 134 administrative jobs out of a workforce of 800.

The public health system, which has been severely underfunded and understaffed for years, is particularly vulnerable. Health NZ is imposing immediate measures at hospitals to tackle “staff-related costs”, as outlined in a letter to senior doctors’ union, the Association of Salaried Medical Specialists (ASMS).

The fourteen demands include an end to double shifts and restrictions on replacing sick staff. Two people on annual leave must be present at each shift “with minimal supplementation”, to force people to take their leave before the end of the financial year. This will reduce rising debt levels, but without sufficient staff it poses a serious threat to patient safety. Leave is often refused due to a lack of staff.

Under the Care Capacity Demand Management system, data collected by staff at the start of a shift predicts the number of nursing hours needed to safely care for a group of patients. If there is a shortage, nurses can theoretically be ‘borrowed’ from other areas to fill gaps, but this rarely happens. Due to staff shortages, departments often face shortages, even when there are no people on leave.

In addition to other provisions, new hires may not start in non-clinical positions without top-level approval, and only at existing pay rates. Vacancies should be permanently closed unless they are part of a confirmed ‘new structure’.

A leaked document shows the Canterbury/Waitaha region is committed to saving $13.3 million by July. PwC consultants have been brought in to implement a ‘financial sustainability target’, even as the government claims it has cut spending on consultants and contractors by $400 million.

While immediate short-term savings of $13.3 million are needed, it also calls for “continued performance improvement.” “Focus areas” for savings included “prosthetic cost assessments,” eliminating “unnecessary procedures and tests,” and the use of artificial intelligence.

A recent PwC workshop with the hospital’s leadership team brainstormed 71 cost-saving ideas, “36 of which have potential efficiency impacts.” “Optimizing resources” such as hospital beds, operating rooms and outpatient clinics would “minimize idle time and maximize productivity,” the document claimed, while a similar exercise with staffing would result in “improved productivity and reduced costs.”

Newsroom reported that in 2020, under the previous Labor government, “relentless demands for cost savings” at the former Canterbury District Health Board led to the exodus of seven of the 11-strong executive team, including the chief executive.

Carolyn Gullery, director of planning and financing, shared Newsroom at the time: “If you’re asking for the impossible, which is to remove more than $90 million without cutting services and personnel, you’re kidding.” An outgoing chief medical officer stated, “If you fire us all, which seems on the agenda, while trying to get us to do something impossible, these problems will not go away.”

Christchurch surgeon Professor Frank Frizelle said this recently Stuff that the “entire pipeline” is being challenged, from anesthesia technicians to nurses, to operating rooms and doctors, due to chronic underfunding by successive governments. “You can withdraw some services a little bit, but at some point you fall off the cliff. That is where we are now.” he said.

The decision of the last Labor government to end its COVID-19 elimination strategy at the end of 2021 and implement a policy of mass infections has so far led to more than 4,000 preventable deaths and 39,000 hospital admissions, deepening the crisis of unmet needs across the healthcare system are exacerbated. .

Official figures show that in December 2023, 68,179 people waited longer than four months for a first appointment with the specialist – the number had almost doubled since September 2022 – and 30,757 people waited longer than four months for a procedure. One patient, 72-year-old Bob Menzies from south Auckland, spoke out New Zealand Herald on Saturday he had been waiting “in absolute agony” for knee surgery for more than four years.

Striking doctors in Auckland, September 5, 2023. (Photo: X/Twitter @fionam_miles)

The emergency clinics are on the verge of collapse. Radio NZ reported last week that in an eight-month period last year, 24 facilities reduced their opening hours or closed due to critical staff shortages and cost pressures. In Porirua, where 100,000 people live north of Wellington, mainly from the working class, the night doctor at the Kenepuru Community Hospital accident and medical center is at risk of being replaced by a telehealth service.

Health Minister Shane Reti claimed the latest cuts are ‘operational decisions made by Health NZ, not the government’, stating bluntly that none will impact the level of care patients receive. “I have been assured that managing clinical risk and maintaining services is always Health NZ’s highest priority,” he said.

Healthcare unions have rejected the claims. ASTMS director Sarah Dalton said the cuts will “completely” impact the frontline – which is already in disarray due to “huge gaps in junior doctors.” “While we are still in a system that is underfunded, this push for cuts is borderline immoral,” she stated. Anne Daniels, chair of the NZ Nurses Organization (NZNO), told Radio NZ that measures such as limiting overtime were “laughable”.

However, the deepening crisis is one in which the unions are fully complicit. For decades, they have worked with governments to force cuts in spending and workforces and sell-out contract deals.

From 2018 onwards, the Labour-led government faced a series of strikes by nurses, doctors and healthcare workers, as well as teachers and firefighters, demanding decent pay and safe working conditions. Although these were systematically betrayed by the unions, they resurfaced amid the escalating cost of living crisis and desperate working conditions, exacerbated by the COVID pandemic.

After what a former nurse told the WSWS was a “meager” pay rise in 2021, the NZNO implemented another below-inflation settlement last August after canceling a one-day strike. The union’s CEO, Paul Goulter, admitted the deal “does not provide a pay increase that meets the cost of living” or address the critical nursing shortage. “It is quite light on important issues such as occupational health and safety and minimum staff-to-patient ratios,” he said.

Last September, after 5,500 senior doctors and dentists staged a half-day strike – the first ever – further action was canceled by the ASMS, which advised members to accept a settlement agreed with the government’s Employment Relations Authority. Executive director Dalton admitted to Radio NZ that the union’s claim for a pay rise that barely covered inflation was “quite conservative”. She stated that this was due to ‘the climate we are in’.

In a sign that health workers’ struggles are about to erupt again, 2,500 trainee doctors will strike next month after voting to reject Health NZ’s latest pay offer. It is the first strike by trainee doctors in five years, and on May 7, deliveries will be stopped completely for 25 hours.

The NZ Resident Doctors Association issued the strike notice after saying negotiations had reached an “impasse”. While the offer included pay increases of up to 25 per cent for some local doctors, Health NZ’s proposals include pay cuts or a freeze for almost 600 registrars, including 300 junior doctors. The local medical officer workforce currently has 500 vacancies.

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