KPMG brought in to assist Government’s health reforms

Te Whatu Ora CEO Margie Apa said KPMG would help set up an office to oversee the implementation of the health reforms. Photo / Michael Craig

Consultancy firm KPMG has been brought in to help with the Government’s major health reforms.

The transition from 20 District Health Boards (DHBs) to the more centralised Health NZ/Te Whatu Ora began in July.

Another consultancy, Ernst and Young, had an influential role in designing and supporting the reform of the DHB sector.

But its involvement in the changes now appears to be limited. Health Minister Andrew Little, answering written questions, said there were currently no contracts with EY consultants that specifically related to the reforms.

Asked why the consultancy was no longer involved in the reforms, Little’s office said it was an operational issue and referred inquiries to Health NZ/Te Whatu Ora.

Te Whatu Ora chief executive Margie Apa said EY was contracted to support a transition unit to develop the reforms, which was always intended to be temporary.

That transition unit, which was part of the Department of Prime Minister and Cabinet (DPMC), was dissolved in July after the establishment of Te Whatu Ora.

Apa said KPMG had been contracted until next month. The firm would be using only locally-based staff, though it may draw on expertise and experience from change within other health systems, including the UK.

KPMG has been tasked with establishing an office which will oversee the reforms.

“This is because Te Whatu Ora is undergoing consultation on shifting reporting lines of people among the 28 entities (District Health Boards and Shared Service Entities) that existed before,” Apa said.

“Until this process is complete the staffing of the Change Management Office from internal resources is not yet able to be deployed.”

Apa said it was also important to have external advice to make sure the implementation did not “revert back to ways of doing work” under the old DHB system.

The recruitment of KPMG did not affect the overall budget for the reforms, she said. The cost of the transition is an estimated $180m over four years.

Figures released under the Official Information Act show so far $13.4m had been paid out to 15 consulting firms involved in the changes.

The estimated savings under the new health agency are $3.5b over 10 years.

The overhaul of the health sector came after a review found persistent problems including budget deficits run by most DHBs and the relatively poor health of some groups, including Māori.

Under the new system, the health sector would be run by the centralised Te Whatu Ora and Te Aka Whai Ora/Maori Health Authority. Services will be delivered by “localities”, which take over the role of DHBs and Primary Health Organisations.

Under the locality model, communities and iwi will decide the health priorities for their area; all parts of the health sector - GPs, pharmacists and in-home carers - will work more closely; and health providers will be connected with other community organisations like housing and employment providers.

Nine localities are being trialled around the country, and every part of the country is expected to have its own locality by mid-2024.