Editorial: Hospital squeeze certain to hurt

The hardest job in the entire public sector is possibly that of chief executive of the Auckland District Health Board. Of all state services, health is the one where the tensions between public demand and Government finance are at their most acute, and Auckland hospitals are at the apex of the service, providing highly specialised treatment for patients from any part of the country. Chief executive Graeme Edmond must see all needs met within a budget that some say is inadequate.

Some say that, but not Wayne Brown, the newly appointed chairman of the district health board. If Mr Edmond has the hardest job in the public sector, it will be because Mr Brown makes it so. On the evidence of Herald investigations published yesterday and today, Mr Brown means business.

He means to see that the board lives within its allocation, and he is not at all impressed with a $400 million strategic plan developed by Mr Edmond and his previous board. The plan - to bring the acute services of Auckland, Green Lane and National Women's together in a megahospital at Grafton - will not, he says, save the $40 million imagined. And even if it did, he doubts that it is a wise investment.

It is too late to back out of it, though, and Mr Brown means to make the changes that have encountered some resistance from clinicians who resent amalgamations of their patch. The chief executive concedes that the changes have fallen 12 months behind schedule while they consulted with doctors. Mr Brown means to fix that, too.

He sounds brisk and abrasive, and he will need to be, to deal with a prospective deficit of $72 million or more. Even the Starship children's hospital is in his sights, since facilities established with funds raised by its charitable foundation become a continuing operational cost to public funds.

But although Mr Brown seems to mean business, can the Government that appointed him keep its nerve, particularly in election year? If the new health board chairman is as determined as he sounds, he is going to create some awkward moments for the Prime Minister and Minister of Health. Both can have no illusions that merely by setting up partially elected health boards they can wash their hands of unpopular decisions the boards are supposed to make.

Health rationing is never popular. When the interests of an individual's health are at odds with the public interest in cost control, there is no contest. Public sympathy naturally goes to the individual, as, of course, does the support of the medical profession. Doctors, though they may recognise a responsibility to husband public funds where they can, obey a higher ethical commitment to the interests of the patient.

Yet doctors quietly make rationing decisions every day. They decide whether a given treatment can be justified, taking into account the cost and the likely improvement in the patient's life. Somehow, the new health boards must devise more rigorous financial discipline throughout the system, to contain budget overruns of as much as $400 million throughout the country at present.

New Zealand, says Mr Edmond, might no longer be able to afford a First World public health service. The low dollar, for one thing, has greatly added to the expense of the latest imported equipment. It is true that the country's declining wealth, relative to rich countries, is likely to show up early in the services that are publicly financed. It is also true that one or two highly regarded business managers have held Mr Edmonds' position before him, and they have declared it an impossible task to meet the demands on Auckland from the funds they were given.

But they were working to a business model that made it logical to press constantly for more revenue, as well as make savings where possible. The present Government has reinstituted orthodox public administration, giving boards a set of policies and priorities and a financial allocation to work within. If all board members are beginning the task with the tenacity of Auckland's chairman, the country might get a grip on its health bills at last.

nzherald.co.nz/hospitals