Government message to DHB heads: ‘Keep quiet or else’

Press Release – Association of Salaried Medical Specialists

Treasurys release of papers about Canterbury District Health Boards (CDHB) financial performance appears to have been deliberately designed to intimidate and silence senior DHB officials who have dared to question the adequacy of government …MEDIA RELEASE

For immediate use

20 July 2017

Government message to DHB heads: ‘Keep quiet or else’

“Treasury’s release of papers about Canterbury District Health Board’s (CDHB) financial performance appears to have been deliberately designed to intimidate and silence senior DHB officials who have dared to question the adequacy of government funding,” says Angela Belich, Deputy Executive Director of the Association of Salaried Medical Specialists (ASMS).

“The papers contain repeated criticisms of the performance of the chair, the chief executive and appointed members of the board, and some border on threats to the positions of these individuals, but lack factual evidence to substantiate the criticisms.

“Treasury itself acknowledges there is no ‘fact-based rebuttal of their arguments’. The criticisms are based on only ‘high level’ data which takes little or no account of the ongoing impact of the 2011 earthquake and subsequent earthquakes.

“As the DHB and clinical staff have pointed out emphatically, the DHB has been performing well, relative to other DHBs, in many service performance measures, despite the difficult conditions. That is down to the hard work and skills of DHB management and staff, who have pulled together to keep services running extraordinarily well in the circumstances.

“For Treasury officials to publicly vilify the DHB’s leadership for having the temerity to suggest the DHB is being unfairly funded is shameful, especially when they lack evidence to the contrary.

“It is also disturbing. Too often information is released under the Official Information Act (OIA) with many sections blacked out to hide sensitive or embarrassing information, officially on the grounds of protecting the flow of ‘free and frank’ opinion. These papers are no exception, with numerous redactions – except where the ‘free and frank opinion’ relates to criticisms of the DHB’s senior officials.

“OIA releases of this nature will have been discussed with the Minister’s office.

“The message from Government to all DHB senior officials is that if you dare to question the adequacy of funding, regardless of the validity of your arguments, your heads could be on the block.”


Release of Treasury papers: background

The way in which this information has been released appears designed to undermine the professional standing of the Chief Executive, the Chair and some appointed board members. They are not mild criticisms, and are largely opinions that are not supported by factual evidence, as discussed below. They include:

• Appointed Board members have not been able (or willing) to get the management team and clinicians to adopt adequate management disciplines … (p 14) [electronic page]

• In our opinion, the apparent strategy of appointing new government appointees on the Board to support the existing Chair improve the governance of the DHB is unlikely to change the behaviour of the DHB Chief Executive and management:

• The current Chair has not, in our view, been effective in this role to date.

• Governance issues that have been relayed to us, such as management tabling papers at board meetings without effective oversight by the Chair (eg, that the DHB is underfunded for mental health services when the allocation decision sits with the Board under the capitated funding model), should have been addressed. (p 24)

Note: Those comments were made in an Aide Memoire to the Minister of Finance, dated 10 November 2016. The Minister of Health subsequently announced (on 21 March 2017) a $20 million increase for mental health services over three years.

• The CDHB management team has shown little sign of being willing to respond to the situation [capital affordability challenges] and Board governance has been and remains ineffective. (p 34)

• CDHB has been unable to control its expenditure and has had problems with operating deficits dating back to at least 2008/09, well before the 2010-11 earthquakes. (p 36)

Note: It is unclear why 2008/09 was chosen as a cut-off date, but it happens to be when David Meates was appointed the DHB’s Chief Executive. The ‘coincidence’ sits alongside other comments about ‘weak governance’ issues in DHBs in general, ending with the sentence: “Most DHB CEs do not have fixed term limits and can be in the role for a very long period of time (the current CDHB CE was appointed in 2008).” (p 41)

CDHB and other DHBs have been clocking up deficits before then. For example, in 2001/02 the Parliamentary Financial Review of the DHB found CDHB had “one of the significant deficits in New Zealand”. At the time it faced a 3% cut to funding relative to other DHBs with the pending introduction of the Population Based Funding Formula. Treasury also acknowledges other DHBs are currently struggling with their finances.

Experience has shown that the Board is either completely aligned with management or has struggled to exert influence. The appointment of new Board members following the recent elections has not improved the situation. The Acting Chair following the departure of Murray Cleverley, Sir Mark Solomon, has not proved effective… It does not appear that he has undertaken any analysis to form his own views. The other appointed members appear to have exerted little influence. (p 39)

Note: The comments assume that ‘effectiveness’ is based on adherence to the Government’s position, even though the Government lacks any substantial evidence to support it. They also assumed the Chair has not done any analysis on the basis that he does not agree with them.

Treasury itself acknowledges there is no “fact-based rebuttal of their arguments” (p 15) and that “this includes lack of analysis: (a) comparing CDHB’s funding to the rest of the country, in a similar but more substantial way to our high level analysis…(b) that provides an objective basis for understanding how the DHB’s overall financial and non-financial performance compares with other DHBs… [and] (c) on how Canterbury’s mental health service needs compare to other parts of the country… (p 40)

Potential use of the OIA

Many sections of the material have been redacted using the ‘free and frank advice’ shutter [9(2)(g)(i) of the Act]. There would have been good grounds for using the same clause to redact the repeated criticism of the chief executive, chair and appointed board members.

The would also be strong grounds for using Section 9(2)(g)(ii) to “maintain the effective conduct of public affairs through the protection of such Ministers, members of organisations, officers, and employees from improper pressure or harassment.”

The Ombudsman’s advice on the latter is that: “Improper pressure or harassment is something more than ill-considered or irritating criticism or unwanted publicity. It is a course of conduct that has such an effect on the person against whom it is directed that he or she is unable to perform his or her duties effectively and hence the conduct of public affairs is at risk.”

It can be argued that the Government has put certain individuals on notice that if they do not change their ‘behaviour’ there may be serious consequences for them. This would have the effect of allowing possibly genuine health service deficiencies to continue but not be addressed.

It is customary for these kinds of OIAs to be discussed with the Minister’s office, and where there is likely to be publicity the Minister, at the very least, will be given a heads up. It is reasonable to assume, therefore, that the way this OIA has been released would have been sanctioned by the Minister’s office and possibly by the Minister himself.

Other matters around the DHB’s general performance have been well argued in the DHB’s recent response to the OIA release. The performance measures show Canterbury DHB is doing well, and better than most is a number of key areas, despite the difficult circumstances. See also:

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