The New Zealand government has sacked the Board of Health New Zealand, citing serious concerns around oversight, overspend, and a significant deterioration in financial outlook.
Health Minister Dr Shane Reti announced the Board will be replaced by a Commissioner, Professor Lester Levy.
“The previous government’s botched health reforms have created significant financial challenges at Health NZ that, without urgent action, will lead to an estimated deficit of NZ$1.4 billion by the end of 2024–25, despite this Government’s record investment in health of $16.68 billion in this year’s Budget,” Dr Reti said.
“Health NZ first reported a deteriorating financial position to me in March 2024, despite earlier repeated assurances by the organisation that it was on target to make savings in 2023–24.
“In the months since, the situation has worsened. Health NZ is currently overspending at the rate of approximately $130 million a month.
“That’s why I am announcing the appointment of Professor Lester Levy, the recently appointed Chair of Health NZ, as Commissioner for a 12-month term. This is the strongest ministerial intervention available under the Pae Ora Act and not a decision I have taken lightly, however the magnitude of the issue requires such action.
“The issues at Health NZ stem from the previous government’s mismanaged health reforms, which resulted in an overly centralised operating model, limited oversight of financial and non-financial performance, and fragmented administrative data systems, which were unable to identify risks until it was too late.
“Prof Levy is tasked with implementing a turnaround plan with a savings objective of approximately $1.4 billion to ensure financial balance, and actions to strengthen governance and management.
“Operational responsibility for the turnaround plan will sit with the Commissioner, however I have made it clear that it should focus on cost efficiencies in areas such as any back-office bureaucracy which has blown out, particularly in middle management, as a result of the previous government’s damaging reforms.”
PRIORITISING FRONTLINE SERVICES
Dr Reti said the government’s “first and foremost priority” is improving the delivery and quality of frontline services.
“As Minister, I am not confident I would have adequate oversight of that spend if the existing Board structure at Health NZ were to remain in place.
“(The) move to appoint a Commissioner is one of several steps our Government has been forced to take over the past eight months due to concerns about the governance of Health NZ and resulting performance issues, including health workforce and hospital wait times.
“Previously, I have appointed a Crown Observer, a new Chair, and a Board member with financial expertise. Through those measures we have been able to identify longstanding issues with the existing governance and operating model.” Dr Reti said Prof Levy had assured him there would be no adverse impacts on health care delivery in implementing a turnaround plan. He said the announcement was “in no way” a reflection on the work of frontline health care staff, thanking staff in hospitals and health care facilities for their professionalism.