Questions are being raised whether hospitals are accurately reporting their massive spending on often highly paid contractors.
And there's a warning the health reforms could make the public reporting worse.
Photo: RNZ / Dan Cook
Alarm bells are ringing over the lack of checks and balances for the public.
Recent research has shown external contractors and consultants cost district health boards (DHBs) $160 million in 2019, but the way that is reported back to taxpayers is full of discrepancies.
Covid-19 demands since 2020 have exacerbated the demands on DHBs.
Auckland University health systems researcher Tim Tenbensel said he was "not convinced that the amount is a problem yet ... but certainly the way the system works needs some tweaking".
Senior doctors' union former head Ian Powell, though, accused business consultants over many years of doing "more harm to the health system than flesh-eating bugs".
Observers say the system has for years been inclined to let go off good staff then hire them back on as more highly paid contractors, including in the medical field.
Auckland University emeritus professor of medicine Des Gorman experienced short-term contracts being manipulated when he led the national health workforce agency for a decade up to 2019.
"Junior doctors would pull out of a contract and leave a DHB with a shortfall, which would then be filled by recruiting a doctor on contract at quite significantly higher rates," Gorman told RNZ.
"And the doctor who pulled out would then pick up a similar contract at a different DHB."
They were within their rights to do it, and it might still be continuing, as the agency tried to tackle it but years of effort to fix the "hodgepodge" workforce were "undermined" by DHBs, Gorman said.
It showed how the system lacked accountability, he said.
"What are we the public getting in return for these large amounts of money being spent on contracts? Are the contractors as good as the employed people? Are they superior?
"To what extent do the contractors delay the system actually getting its employment systems right, in actually having the right number of people doing the right job in the right place? These are all completely unknowns."
DHBs typically report back annually to Parliament on hundreds of individual contracts worth tens of thousands of dollars each, alongside a few bigger contracts. They list names and amounts, but not often the rates charged, and usually it is not spelt out exactly what the contract was for.
DHBs face similar questions as the 30 departments in the core public sector.
But unlike that core, they are not covered by an order four years ago from the Public Service Commission to make their reporting on contractor and consultant spending much clearer and more comprehensive.
Professor Tenbensel said contractors responded to the attraction of higher pay and autonomy than if they worked within the bureaucracy, and DHBs were responding to years of reforms and tight budgets that made it difficult to undertake the long-term job of rebuilding internal capacity.
"They do encourage short-termism; they do discourage capacity building," he said.
"I don't think it's a free-for-all. I think it's ad hoc and incremental. That's kind of how it has evolved.
"It's difficult to tell whether it's expensive because if you're just drawing on this capacity for one contract a year, or one or two months' work, versus having that expertise in-house it might be actually better value for money to contract out."
At Capital and Coast DHB, 43 contractors last year had been on the DHB's staff till recently; several other DHBs gave low or no numbers.
Powell, who led the Association of Salaried Medical Specialists for years, takes regular aim online, at business consultants within the health sector.
"As a generalisation, I would say the expenditure on much of the work ... has been a shocking waste of taxpayers' money."
The health reforms that will do away with DHBs in July, appeared set to only make it worse since bureaucrats were relying on advice from external consultants, he said.
"It feels like a traffic roundabout being designed by panel beaters. This feels like a health system that has been designed by business consultants, for which much of the work for it - rather lucrative work for it - will come their way," Powell said.
The health transition unit working on the reforms is dominated by people from giant consultancy Ernst & Young (EY), OIA documents have shown.
Professor Robin Gauld, who co-authored the Otago research, said that was a conflict of interest.
"There needs to be a lot more transparency around how that works," Gauld said.
EY declined to comment.
Gorman said the reforms needed to set up a new single national employer.
"These reforms will live and die on workforce issues," Gorman said.
"The lack of transparency means that [we don't] have any real insight as to where the significant shortages are ... [so] where is the funding coming from to address the long-term need of those shortages?"
Professor Tenbensel said the reforms should systemise how contracts, especially the large ones, were handled at a national level.
