Cost cuts target older health staff

The Auckland District Health Board is raising the prospect of replacing older, more experienced staff - including doctors and nurses - with younger and cheaper ones as it looks to cut costs.

But board chairman Wayne Brown, who made the controversial comments in front of a parliamentary select committee yesterday, seemed unclear whether this was already happening, or would happen in the future.

He made the comments when quizzed about projected redundancies, and the idea has already attracted criticism in the health sector with the Association of Salaried and Medical Professionals labelling it "idiocy".

The association said in regard to doctors, it didn't seem practical.

Mr Brown, and board chief executive Garry Smith, spoke to the parliamentary committee on video link from Auckland yesterday.

Asked by Mr Ryall what provision had been made for redundancies, Mr Smith said $8 million had been budgeted this financial year and $380,000 spent so far.

Mr Smith said he didn't expect to spend all the $8 million as the board's deficit had improved - dropping from a projected $66 million to about $50 million. Both he and Mr Brown agreed there would be further redundancies this year.

The $8 million was based on "a theoretical number of several hundred people", but the board wouldn't have detailed numbers of how many jobs would go until service reviews were completed, Mr Smith said.

"I think we have got some early indications that we are going to be discussing this afternoon." Mr Smith said redundancies would include medical professionals.

Mr Brown said: "Given the automatic step changes in salaries that occur over time with staff, one of the ways to keep the staff cost within the future funding growth percentages is to, where possible, re-employ younger people."

Mr Ryall asked if this would specifically affect doctors and nurses.

Mr Brown said "well, in the mecas (multi employer contract agreements) in the health industry there is a particular thing that you get step-up just from being there. Whereas in the construction industry a carpenter who has been there 20 years doesn't get more than one who has been there for 10".

The board "had to manage numbers down" and if it could do so by "utilising the turnover and re-employing people with similar skills and less actual cost to you then that's a natural and sensible thing to do because after all we are charged with spending as wisely as we can without cutting any services."

Mr Ryall said afterwards "the health system is really in trouble when experienced doctors and nurses could be sacked and replaced by inexperienced, younger staff in order to save money."

Association of Salaried Medical Professionals executive director Ian Powell said Mr Brown's comments were based on "ignorance, shortsightedness and idiocy".

He'd failed to recognise that experienced staff produced higher quality work and were more efficient with their time.

It was also essential they were around to pass those skills on to younger staff.

Turnover rates for senior doctors were low and it would be difficult to get rid of them without sacking them.

Replacing experienced nurses with younger ones would also be a cause for concern, he said.

Mr Brown said late yesterday that the DHB was not planning to make experienced or older staff redundant.

"When people leave voluntarily ... we tend to re-employ younger people, but there's no firing anybody for that."

Later in the discussion he said re-employing staff who hadn't been on union contracts for long, and were therefore cheaper, through natural attrition, was "one of the ways, but I'm not saying we are doing it or we are not".

- Additional reporting, NZPA