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Hospitals’ Medical Staff Condemn Restructuring

June 28 2004

Christchurch Hospitals’ Medical Staff
Association Condemns Hospital Restructuring

Christchurch Hospitals’ Medical Staff Association is concerned about a further restructuring of the DHB’s hospitals management; it is likely to be detrimental to good patient care and there is no it will be evidence presented to show that there will be cost savings.

A wide range of the DHB’s senior medical staff and other health professionals have expressed major concerns in regard to the proposal.

The senior medical staff have expresses their support for Jim Magee, the present General Manager of Christchurch Hospital who they feel has been given an impossible task.

The restructuring is being proposed a result of the DHBs panic reaction reduction in “real” funding to Canterbury brought about by the new funding formula, and lack of appropriate funding for tertiary hospitals that take referrals of highly complex cases from other hospitals.


The Christchurch Hospitals’ Medical Staff Association acknowledges that the District Health Board corporate management team has decided to extended the deadline to enable staff to express their concern with regard to the proposed restructuring of the DHB.

Many staff have expressed the view that the reorganisation has come about in an attempt to remove the present General Manager of Christchurch Hospital, Jim Magee because of the recent overspend of the budget. The very short initial period of consultation of 2 weeks raises concerns that they may be a predetermined outcome. It should be noted that the GM of Christchurch hospital has organised a number of successful projects which in the last 12 months have resulted in savings of approximately $6m. His management style has encouraged constructive cooperation between different services within the hospital to maximise efforts to improve efficiency. As a result, the staff and management within Christchurch Hospital are working better together to improve patient outcomes. Already, as a result of this proposal for change, some of our highly valued hospital management team have decided to quit.

There is no evidence within the proposal which indicates that the new structure will improve patient care. Indeed the opposite may result. Many of our members have expressed real concerns that it will lead to impaired patient care as it will separate the management of groups of health professionals, such as medical, nursing and allied health professional within Christchurch Hospital, who under the present structure have been able to work very closely. This had resulted in improved patient care and reduced inpatient days. The present service groupings under one General Manager at Christchurch Hospital have been able to respond effectively to the individual requirements patients within the different services. For example, clinicians remember the dysfunctional state that developed in the 1990s when the Radiology (X-ray) Dept was under a different manager from that of the other clinical services.

The management systems at The Princess Margaret and Burwood Hospitals are working well under the present system and there is concern that the change of structure, with the combination of the two under one structure may lead to less successful management.

It is quite unclear from the document as to how the proposal will improve the deficit, apart from saving one General Manager position. There is no business case put forward to support this change of structure, and there is a total lack of substance in what is a very flimsy document.

In a recent presentation at the Christchurch School of Medicine, the CEO of Waitemata Health (one of the more successful District Health Boards) stressed the importance of not restructuring at times of financial pressure but putting effort into working with clinical staff to find ways of being more innovative in our health delivery. Restructuring seems to take place approximately every 3 years and there appears to be no reason why this further restructuring is likely to be any more successful than the previous attempts.

It is acknowledged that the management structure at Christchurch Hospital needs to be strengthened. It requires more input from staff who have the ability to analyse where the greatest cost benefits are, and recognise system failures.

We would argue that the “over expenditure” of Christchurch Hospital reflects “under-resourcing”. Christchurch Hospital is one of three main tertiary hospitals in the country which undertakes often very complex, and therefore expensive, treatments for patients outside of the DHB catchment. Whilst the Government directs DHBs to use new and expensive treatments (such as some of the new cancer drugs) without actually providing extra funding, the hospital will always be overspent. This “over expenditure” is also occurring in the other tertiary hospitals, such as Auckland, for the same reason.

It is worthwhile to note that the document publicly admits that the “Population Based Funding Formula” will lead to a decrease in funding in “real” terms for the people of Canterbury (and therefore for those from throughout the South Island that use the tertiary services.)

This has led to a decrease of $9 million less to spend in “real” terms this year and a further reduction of $8.3million next year and similar amount for the following years. When reasonable increase in costs outside of the DHB’s control such as blood, CPI and the Holidays Act are taken into account then this equation is even more inequitable. A change of management structure will not be able to contain these cost increases.

In conclusion, we believe that the reorganization proposed will lead to decreased patient care and will not lead to a reduction in expenditure.

Christchurch Hospitals’ Medical Staff Association.

This is an organisation that has been in existence since 1903. It has approxiamately150 financial members. The Executive consists of 15 elected members. As an organisation it endeavours to work alongside management to improve patient care.

However, where patient care is suffering as a result of management or government policies it has had a role in speaking out. It did this in the mid 1990s when the then government’s policy of a competitive model of health care was leading to a markedly impaired patient care and putting lives at risk. At that time, many of the active members received personal treats.

Their efforts to alert the people of Canterbury of the risks were rewarded by the finding of the Stent enquiry which confirmed the risks to patients and by the subsequent Award for Academic Freedom given to four of the members by Noam Chomsky.

From the Executive of the Christchurch Hospitals’ Medical Staff Association.


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