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Mercer Induces Déjà Vu For Health Ministers

Former Health Ministers will be feeling an eerie sense of déjà vu with another health boss leaving with bitter words about how hospitals are funded or more specifically how much funding their hospital received in comparison to other hospitals.

The outgoing boss of Capital Coast Health, Leo Mercer, has returned to America saying that his former hospital's inability to remove its financial deficits are the results of years of underfunding in comparison to other hospitals.

It is not a new refrain, during the early and mid-years of the health reforms there were a series of high profile and 'high noise' departures of hospital bosses across the whole spectrum of sizes from the largest to the smallest. In particular, the departure of Dennis Pickup from Auckland is most reminiscent of Mr Mercer's comments.

The latest Health Minister, Wyatt Creech, also echoes Ministers of the past in saying the comments are sad, simplistic and they are trying to work it out.

The funding model for hospitals has always been contentious. In the days of the Area Health Board, the boards received a grant and then divvied it up amongst the wide range of services in their care. This was basically everything but GP fees. Few ever lived within their budgets and Auckland and Wellington were both major headaches for those who controlled the Government's health budget. One board in Auckland was sacked and Wellington came perilously close to the same fate.

The reforms of the early and mid nineties sought to split up the funding for hospitals from other health care and then work began to break down the various hospital services into their individual components.



The argument went that once you broke it down, you could then do comparisons and work out why one hospital was more expensive than another and then fund fairly.

The plan may have looked good in Wellington, but down on the ward floor it caused problems. Every service of every hospital argued it was special and they were right. The problems faced by a general surgeon on the West Coast are very different from those faced by a heart specialist in Auckland or a mental health nurse in Whangarei. Each is special and each faces extra costs that aren't comparable with the others. Everyone is the same in being special.

The system envisaged as pure became more ad hoc over the years with 'special' funding for things as far ranging as the complexity of work done in the big hospitals to the problems faced by small rural hospitals.

While much of the political heat has gone out of the arguments over health funding, they still bubble away and occasionally boil to the surface such in recent days with Leo Mercer.

What makes Mr Mercer's comments more interesting is that he was hand-picked by some of the Government's leading navigators of the health system to sort out Wellington's financial and medical organisation woes by bringing those sometimes opposing priorities together.

His departure with the job clearly not completed on the financial, management or medical levels leaves Wellington Hospital in much the same place it was ten years ago.

Once again the call will call out, 'anyone got a plan'.

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