Health Minister Jonathan Coleman has appointed a commissioner to replace the Southern District Health Board.
The financial problems at Southern DHB are longstanding. I do not have confidence that the current governance arrangements are suitable for delivering on the changes required in Southern DHB,” says Dr Coleman.
“Southern is forecasting a final deficit of $27 million for the current financial year. That figure has effectively doubled in the last six months.
“The DHB has also forecast that its deficit position will further increase in 2015/16 to between $30 million and $42 million – this accounts for over half the combined deficit of all 20 DHBs. This situation of fluctuating forecasts and progressively worsening deficits cannot continue.
“The Government is committed to the redevelopment of Dunedin Hospital and the provision of high quality health services to all the people of the Southern region.
“All DHBs are funded according to the same population-based funding formula. This formula includes adjustments to recognise rural populations, age and other demographic issues.
“In a tight fiscal environment, all DHBs need to use available funding effectively. No other DHB has failed to control its finances in the way that Southern has.”
Kathy Grant has been appointed Commissioner and takes up the role on 18 June 2015. After discussions with Mrs Grant, she has indicated that she intends to appoint Graham Crombie and Richard Thomson as deputies. A third deputy with a strong clinical background will be appointed by the end of the month.
“Mrs Grant is from Otago and brings significant local knowledge. She has significant business and governance experience and a proven track record in turning around struggling organisations,” says Dr Coleman.
“The team will bring together a mix of strong financial, governance and clinical skills.
“I would like to thank the Board members for their work to date. My decision is not intended to devalue their efforts and achievements. However, a new approach is now necessary.
“My decision is based on the need for a new approach to the DHB’s longstanding financial issues, and to help move the DHB to a more sustainable position over time.”
This is a good move by the minister and the commissioner has made a very good start in the appointment of her deputies:
Kathy Grant bio
Kathy Grant was born in Otago and has spent most of her life in the region.
Mrs Grant currently works as a consultant in the legal practice of Gallaway Cook Allan in Dunedin. She has significant governance experience. Mrs Grant holds several current directorships including Chair of the Otago Polytechnic Council (appointed 2010), a trustee of Sport Otago (appointed 2007), and a director of Dunedin City Holdings Ltd (appointed 2012), Dunedin City Treasury Ltd (appointed 2013), and Dunedin International Airport Ltd (appointed 2008). She was also a member of the Anglican Family Care Board (2009-2013).
Mrs Grant has been on the Board of Trustees for several schools and colleges, and a previous member of the University of Otago Council (2007-2010). She was also previously Chair of the Dunedin College of Education Council (2001-2006).
Graham Crombie bio
Graham Crombie is a Dunedin local. He attended Bayfield High School and Otago University. Mr Crombie has a strong background in accountancy, with a proven record in high level assessments of the sustainability of health organisations. He was President of the New Zealand Institute of Chartered Accountants (2008) and went on to become chair of the organisation (2009-2014).
Mr Crombie also has lengthy governance experience. He is currently chair of Dunedin City Holdings (appointed 2012), Dunedin City Treasury (appointed 2013), Otago Museum Trust Board (appointed 2011), Dunedin Venues (appointed 2015) and director of Surf Life Saving NZ (appointed 2013). He was also the independent chair of South Link Health (1999-2009).
Richard Thomson bio
Richard Thomson was born in Invercargill and attended Otago University. After specialising as a Clinical Psychologist he took up a lecturer role at Otago Medical School. He is now a successful businessman.
Mr Thomson has key insights into Southern DHB. He was chair of Otago DHB (2001-2009) and became a Board member after Otago DHB merged with Southland DHB (2009-2015).
Mr Thomson is currently serving his second term on the Dunedin City Council.
They have a difficult job to do but it must be done to secure health services in the south.
All DHBs have population based funding which takes into account a variety of factors.
Advocates in the south have long-argued that the formula doesn’t take enough account of the costs of servicing a smaller population, which isn’t growing much and is older than the average, spread over a large area.
The ODT editorialises:
. . . The fairness of the opaque population-based funding model again has to be questioned. The South failed to attract the increases of other areas in recent times and for various reasons could be seriously disadvantaged.
If the appointment of a commissioner is the signal for a fresh start then everything should be on the table, including how funding is calculated with an analysis of its fairness. After all, the South has to cope with the largest geographic area, the extra costs for teaching and many – and usually more costly – older patients. . .
The commissioner and her deputies will have to make the formula work or prove the advocates right.