Huge health board vetoed

The Government rejected a bid to merge the three Auckland district health boards after Treasury said it was not worth the hassle.

Papers released under the Official Information Act show the chairman of the Auckland board, Wayne Brown, suggested last year that amalgamation could save $60 million a year.

Treasury said Auckland DHB needed to find another $20 million in cost savings on top of those already identified as a stand alone DHB.

"It believes such savings can come from a regional merger," the Treasury paper said. "In addition ... [Mr Brown] has sought support for greater regional co-ordination involving a regional funder, governance changes to the Northern District Support Agency and some form of regional 'super board'."

The papers said there was little elaboration to a claim that a merger would bring $60 million in savings, a figure which seemed to be drawn from an earlier report that estimated amalgamation would save $27.5 million on clinical services, $20 million in management costs and $12 million on support functions.

Other studies warned the costs of merger might not outweigh benefits because of differences in how the very large organisations operated.

There would also be resistance from those within the DHBs.

"Amalgamation/merger of entire DHBs is not currently an option which ministers would entertain due to its complexity and high risk."

Instead, Treasury said ministers should "harness" Mr Brown's enthusiasm to see greater co-operation between the DHBs.

- NZPA