Hospitals take scalpel to management

By MARTIN JOHNSTON health reporter

The Auckland District Health Board is pruning its management to allow more spending on patients.

Chief executive Garry Smith is reassigning the work of four senior managers to others, as part of changes intended to save at least $7 million a year.

This is on top of the $40 million the board has promised the Government to save annually by July next year.

The $40 million changes, linked to the shift to the new Auckland City Hospital, have been under way for two years and involve the loss of nearly 700 of the board's 7000 fulltime equivalent jobs. Most of the losses have been by attrition and of the first 95, a tenth were clinical.

Part of the latest savings plan is the departure of the chief operating officer, Marek Stepniak, next month, after more than two years in the job.

His position overseeing the board's provision of hospital and related services - two-thirds of its work - is largely merged with a new job of Auckland City Hospital general manager, which goes to Nigel Murray. Dr Murray adds this to his now-shrinking job overseeing the building programme, but he also becomes deputy chief executive.


The changes come on top of the new hospital failing to meet savings targets. During summer the staff have struggled to cope with high numbers of patients, problems with instrument sterilisation and - according to some doctors, but denied by management - the reduction in bed numbers.

Mr Smith said last night the board's administration and management cost too much.

It spent 1 to 2 per cent more of its hospitals arm revenue of $705 million on these things than equivalent public sector organisations.

Saving at least 1 per cent of this amount - more than $7 million - was not a Government demand, Mr Smith said. It would put more money into patient care.

The senior doctors' union executive director, Ian Powell, said: "There is a compelling argument for thinning management out. It's an administrative overhead and is not where the key expertise is in health."