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Collective Bargaining And Health Systems: Place And Tide

Otaihanga Second Opinion is a health systems blog with a largely New Zealand focus. Otaihanga on the Kapiti Coast and by the Waikanae River is where I live. It is a Maori name meaning the place made by the tide.

Linking collective bargaining to health systems might seem odd. But not really. Health systems through exigency are highly labour intensive so workforce is their most vital ingredient. The health system workforce, particularly in secondary and tertiary care and again through exigency, comprises inter-dependent multiple occupational groups (much more so than in the education system) many of whom are very specialised and overwhelmingly health professionals.

District health boards (DHBs) are the biggest employers of health professionals (mainly in public hospitals) who, in turn, are the most important driver of innovation in health systems. Significantly health professionals are also highly unionised with the Association of Salaried Medical Specialists having the highest membership density.

Health labour markets, not labour market

These factors mean that there isn’t a single labour market in DHBs. Instead there are different occupationally based labour markets often with different drivers. Better pay on its own understandably tends to be predominant for lower paid occupational groups. Relativity can be a pressure point for some groups. Pay equity will be a new driver especially for female-intensive occupational groups.

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So too can recruitment and retention be a labour market driver in DHBs. It is also the driver most directly linked to the performance of the health system in ensuring accessible quality patient-centred care. In this situation the focus is often on retention. However, where the occupational labour market within DHBs is also part of an international labour market, recruitment becomes equally and sometimes more important.

DHB employed medical specialists are in a distinct labour market, which is also Australasian, whose driver is recruitment and retention. In previous recent blogs I’ve discussed both the specialist workforce crisis in New Zealand and the threat to our health system from the trans-Tasman specialist salary gap massively in Australia’s favour.

Two things needed

Those needing public hospital healthcare are faced with the leadership failure to recognise the huge DHB specialist shortages of around 24% and the consequential fatigue, job dissatisfaction and attrition that follows. This is high risk territory for patient safety which would be politically criminal to allow to continue and normalise.

The first thing we need is recognition by government and DHBs that this is a priority to address. This should not be difficult to a government committed to well-being and kindness. It would be difficult for a government lacking in this commitment.

The second thing we need is employment conditions that much better enable DHBs to recruit in the international specialist labour market. This is where collective bargaining comes in because it is a moment in time when there is close to balance in the employer-employee relationship. Governments and DHBs have rigidly adopted the position that one size fits all for all these occupational groups. We need flexible thinking from them.

DHBs ability to compete internationally is blocked by the over 60% specialist salary gap with Australia. Quite simply, except around the margins (no snakes), we can’t. Even though New Zealand has done better in its response to Covid-19, Australia isn’t far behind and well ahead of the countries we both seek to recruit from. Covid-19 is unlikely to make a difference especially if both countries are able to further streamline their quarantine requirements in a similar way.

MECA negotiations

DHB specialists are covered by the ASMS negotiated multi-employer collective agreement (MECA). It is the single most important thing that ASMS does. Not to recognise this fails to distinguish between wood and trees.

The MECA covers the minimum core terms and conditions of employment for the overwhelming majority of its members. It is a powerful foundation that not only provides important ‘pay and rations’ but also essential employment protections (including hours of work and against unjustifiable actions) and rights (for example, to speak out and to give priority to responsibility for specialists’ patients when there is a conflict with responsibility to their DHB). A weaker MECA would make ASMS industrial officers less effective in representing specialists.

Late last year ASMS adopted a bargaining strategy for its forthcoming negotiations that put the salary scale at the centre of addressing this crisis. The capacity of both its research and communications team had been strengthened for this purpose.

Putting the salary scale at the centre doesn’t mean claiming for an over 60% salary increase for all specialists. Such a claim would be confusing (to use the kindest possible word) and make it look like using a crisis to get a massive pay increase. But constructing a new salary scale would make the MECA much more effective in recruiting internationally and improving retention. This would mean a salary scale that looked more like an Australian specialist scale (the lowest Australian state salary step is greater than the highest New Zealand salary step).

The immediate cost would be in the translation to the new scale. The biggest group of specialists are on or near the top of the current MECA scale. If they translated to the first step or two of the new scale then costs would significantly reduce. Financially the biggest immediate financial winners would be at the lower end of the current scale but they are also the smallest in numbers. There might be a relativity concern for specialists in these translations but the benefit for the health system and their patients should override them. The ‘trade-off’ for this concern and for both Government and DHBs would be the ability to recruit and retain more specialists for the good of patients, the health system, and the health of specialists.

Negotiations commenced early this year but the onslaught of Covid-19 required a short-term 12 month settlement without being able to address it. ASMS will be back in MECA negotiations early next year. It will be important that it continues with its strategic approach. Collective bargaining requires both aspiration and pragmatism. The former is the objective to be achieved; the latter is the building blocks that might be needed over time to get there.

Collective bargaining could be the tide that helps make the place that is the health system. It is one thing for Government and DHBs to be complicit in normalising specialists shortages including the harm this does to patient care and the health of specialists. That must change. It would be another thing for their union to get cold feet and share this complicity. That must not happen.

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