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Pay Equity Settlement For DHB Administration Staff Has Valuable Lesson For Medical Specialists

Under new gender pay equity legislation through an amendment to the Equal Pay Act in July the Public Service Association (PSA) has achieved a major win for clerical and other administration staff employed by New Zealand’s 20 district health boards (DHBs). The means for the PSA’s achievement was the successful negotiation of a new pay settlement with the DHBs.

Workforce ‘demonisation’

This achievement is not only a significant outcome in its own right. It is also a significant shift in approach to workforce which is at the core of New Zealand’s health system. When the National led government took office in late 2008 its new Minister of Health Tony Ryall immediately launched into a campaign branded as shifting resources from the ‘back office to the front office’. In other words, he alleged, too much was being spent on administration at the expense of patient services. To this end he set an arbitrary cap on the number of administration staff.

There were three problems with this decision. First, Minister Ryall’s justification was simply untrue. Second, it failed to appreciate how inter-dependent clinical and non-clinical services are. The former can’t effectively function without out the latter. Many administration staff in fact work in or close to the so-called ‘front office’ such as in hospital wards, outpatient clinics and laboratories.

Third, this opportunist politics devalued the important work of administration staff. It created a potentially negative culture and arguably constituted political bullying of a vulnerable workforce. On several occasions I publicly criticised this devaluing on behalf of the Association of Salaried Medical Specialists. In my view it was a form of workforce demonisation. Even after the ‘admin cap’ was discontinued the legacy of devaluing remained.

Andrew Little on the mark

Under the new legislation, with 92% of DHBs administration workforce being female, it was inevitable that DHB administration staff would be high on the gender pay equity priority list (it was the second). The settlement still requires ratification by PSA members. However, ratification seems highly likely although this appears certain with the PSA recommending settlement.

It is a positive sign of the times that new Minister of Health Andrew Little has the opposite view to his ministerial predecessor (bar three). He welcomed the settlement. Little didn’t mince his words describing it as unacceptable that the work of administration staff had been undervalued so long because it was undertaken by women. He correctly added that these employees have made an important contribution to the provision of health services to New Zealanders.

Lesson for medical specialists

The details of the settlement are not widely known and it is not the role of Otaihanga Second Opinion to discuss them. However, the form of the settlement is worthy of special note. When finalised the pay settlement will be incorporated into a national salary scale structure. That is, administration staff will translate from their current salaries to a new salary structure that will be applied consistently nation-wide.

One of the effects of this approach is that relativity flow-on to other staff, the fear of all DHBs as employers, shouldn’t occur. Relativity can have a relevance in negotiations but there is no single health or DHB labour markets. Instead there are several labour markets with their own distinct imperatives. Particularly when there is a need to address a specific labour market issue such as gender pay equity, relativity flow-on would risk returning to inequity.

There is a lesson in this approach for DHB employed medical and dental specialists whose national collective agreement comes up for negotiation early next year. Specialists are the victims of a workforce crisis that has steadily worsened over the years.

There are severe specialist shortages (best estimate around 24%). Consequently specialists are overstretched and overworked. They have a high burnout rate which is detrimental to their health and puts patients at risk. There is a serious attrition rate due to both the natural aging of the workforce and increasing job dissatisfaction.

Unfortunately we don’t train and retain enough resident (junior) doctors to replace them. Even if medical school intakes were significantly increased now, it would be a minimum of 13 years before they could start working as a specialist. Consequently New Zealand is dependent on overseas recruitment. However, we can’t compete with Australia whose baseline salaries are over 67% higher.

This massive trans-Tasman pay inequity on top of everything else traps us. Both cost and fear of flow-on would panic DHBs and Government. However, constructing a new salary scale more consistent with Australian scales but where translation would be near the lower end provides a way forward.

This approach would reduce implementation costs and phase in subsequent costs as well as avoid flow-on risks because of the specific nature of this workforce crisis. It would require an investment in the specialist workforce. This is necessary if DHBs are to be better placed to compete against Australia in order to have sufficient specialists to provide accessible quality patient-centred care.

This requires DHBs and ASMS to recognise their responsibilities as employers and the union respectively to not allow this crisis to be normalised What is required even more is for Minister Little to continue his insight by affirming that it is unacceptable that the health and welling of DHB specialists has been undervalued for so long by being overstretched, overworked and burnt out.

He should add that these employees should not be funding the health system with their health and are essential to the provision of patient-centred care to New Zealanders.

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