Auckland health board needs to cure the malaise

By ROD PERKINS

Graeme Edmond must be given full marks for sticking at it. He lasted seven years in the biggest management job in public health care in New Zealand, where the average length of stay of chief executives is usually half that. Now he has resigned.

Some are wondering why. Wayne Brown, the chairman of the Auckland District Health Board, thinks there is little public interest in Mr Edmond's sudden departure.

Wrong. The Minister of Health has said the board should explain the reason for the resignation. But with the door shut on that conversation, it is timely to ask where to from here with the health board's top management?

The reason this resignation's timing is bad is because in a matter of months the new Auckland City Hospital will be opened. No one person or group has the sole leadership role for the successful commissioning of a new facility of this magnitude. It is and will continue to be a massive effort on the part of hundreds of dedicated staff, contractors and so on.

But heading up these workers for the past seven years has been Mr Edmond. He has been most concerned with the totality of the project, including negotiating its passage past the powers-that-be in Wellington.

The decision of the board to let its chief executive go now, rather than sometime next year or the year after, is bad for the following reasons:

* The board is in financial difficulty without taking the new hospital into account, and Mr Edmond's resignation will do nothing for this situation.

* Mr Brown has a difficult relationship with the public as well as with key staff.

* Most important, without Mr Edmond there will be a loss of accountability for delivery on the savings that have been agreed between the board and the Wellington bureaucrats as part of the new hospital deal.

Let's look at each of these points. The first is that the Auckland District Health Board treats high-cost patients and does not get compensated adequately. The Government's health strategy offers little hope for a change in that situation. Plus, the neighbouring district health boards want to see more decentralisation of city services to the north, south and west of the city.

The board has a chronic funding problem that is better understood by Mr Edmond than anyone else. Losing him now will do nothing to heal the malaise.

On the second point, many go along with what Mr Brown wants from the Auckland health system. He supports the health strategy, cares about health outcomes and, as we learned during the hospital names debate, cares about communities, especially children.

The problem is that he is seen to be operating without sensitivity to process. In other words, he is out of sync with his staff who are in the curing and caring business. He has a fragile relationship with many. Medical staff especially do not appreciate his style.

Mr Edmond has sat uncomfortably between Mr Brown (and his board) and senior clinical staff. Letting him go on the eve of the opening of the new hospital will do nothing for the relationship between the board and its key staff at a testing time.

The third point gives rise to the greatest concern. From the late 1980s, when the decision was taken to remove accident and emergency and general hospital services from Green Lane, it was inevitable one day that that hospital would close to inpatients.

When Dennis Pickup resigned in the mid-1990s, Mr Edmond stepped in and moved quickly to reconfigure hospital services in Auckland City. Under his leadership, the board and senior staff began work on a plan to move inpatient services to the Auckland/Starship site in Grafton.

The restructuring of Auckland city hospital services was anything but straightforward. By world standards it is an enormous health restructuring.

During the planning phase, the Government was not about to let such an ambitious project proceed unless it made financial sense. Making financial sense meant spending less money by amalgamating all inpatient services on one site. The Wellington view was that there would be savings.

Fair enough. It should be cheaper to operate one jumbo hospital than two large ones. So Wellington officials were attracted to the idea of efficiencies.

Mr Edmond and his team secured the approval to build on Grafton, and part of the deal was that they would deliver operational savings. The figure being discussed in the mid-1990s was $40 million annually. This is big money, and since most of it goes on staff it means that hundreds of staff will have to be lost if the board's agreement with the Government is to be met.

The problem with all this is that managers and boards in public sector healthcare organisations in countries like New Zealand have limited ability to influence spending once the structures are in place.

They do not make the clinical decisions. Clinical staff and doctors make the decisions about patients that result in spending. There is no alternative for managers and boards but to work with them.

Mr Edmond believes doctors, nurses and allied health professionals should be involved in the decision-making.

In the late 1990s he set up a structure involving them in leadership roles. Independent research in 1999 demonstrated that the Auckland Healthcare doctors were financial realists - they accepted that when they made a clinical decision they were also making a resource decision.

That is not a view clinicians hold universally. Well done, Auckland Healthcare.

While Mr Edmond knows you have to work with the doctors, his chairman was quoted as saying something like, "putting doctors in charge of health services is like putting a rabbit in charge of the lettuce patch". Like rabbits, doctors gobble up all the goodies until there is nothing left. In other words, Mr Brown reckons doctors are not to be trusted with healthcare resources.

So here is the scenario. Mr Edmond departs. All hands are on deck with the commissioning of the new hospital and there will be unforeseen spending and perhaps a major budget blowout. The temptation will be to blame the departed chief executive.

Whether that matters is not the point. The point is that keeping Mr Edmond until after commissioning would have made more financial sense - and probably service sense as well.

His loss means there is nobody at the top to hold to account. The board and most of the incumbent managers can wipe their hands; they were not there when the commitments were made.

Where to from here? The Auckland District Health Board needs a chief executive, quickly. A New Zealander should replace Mr Edmond. We have managers with the ability to take on the toughest assignments, and this will be one tough assignment.

* Rod Perkins, a former Auckland Hospital manager, lectures in health management at Auckland University.