2017/18 Annual review of the Wairarapa District Health Board

Transcription

1 2017/18 Annual review of the Wairarapa District Health Board Report of the Health Committee March 2019 Contents Recommendation... 2 Background... 2 Financial overview... 2 Audit results... 2 Financial management information system no longer supported... 3 Shared services... 4 Mental health... 4 Virtual consultations in primary care... 4 Child health assessment tool... 5 Earthquake strengthening needed... 5 Workforce planning... 5 Appendix... 6 Louisa Wall Chairperson

2 Wairarapa District Health Board Recommendation The Health Committee has conducted the annual review of the Wairarapa District Health Board for 2017/18, and recommends that the House take note of its report. Background Wairarapa District Health Board (DHB) provides for the health of people living in the southeast of the North Island, including Masterton, Carterton, Greytown, Martinborough, and Featherston. The DHB looks after about 44,000 people. It pointed out that, by population and funding, it is the second-smallest DHB after the West Coast. The proportion of Māori covered by the DHB 18 percent is similar to the national average, while the proportion of Pasifika 2 percent is lower than the national average. Compared with the national average, the DHB covers relatively more people in lower socio-economic groups. The DHB said the Wairarapa s population is growing rapidly. In the last five years, it has grown 6 percent. The population of older people has grown by 7 percent in the last 18 months. The DHB said that it has the oldest population in the country on a per capita basis. About 28 percent of the Wairarapa s people are aged 60 or older. This compares with the national average of 21 percent. The DHB said that older people in the Wairarapa visit GPs about 11 times a year twice as often as the national average for over-60s. The DHB employs about 486 full-time-equivalent staff. It operates one hospital: Wairarapa Hospital in Masterton. Financial overview The DHB s total revenue in 2017/18 was $158.4 million, about 5 percent more than in 2016/17. Its total expenditure was $167.4 million, 9 percent more than in 2016/17. The resulting deficit of $9 million is almost three times more than the budgeted deficit of $3.2 million. 1 We note that the DHB has a letter of support from the Ministers of Health and Finance, confirming that the Crown will provide the DHB with financial support if necessary to maintain its viability. Audit results The Auditor-General s opinion was qualified by the fact that he could not determine whether the carrying value of the hospital buildings was materially different to its fair value on 30 1 Wairarapa Ora Hauora pai mo te katoa, Wairarapa District Health Board Annual Report 2018, p 65. 2

3 June In 2018, the DHB revalued the property. After that, it discovered that the main building needs seismic strengthening. It does not know how much the strengthening will cost. It decided to leave the buildings value the same as in the 2017/18 financial statements. We note that this value does not reflect the required strengthening work or other movements in fair value since the prior valuation on 30 June The Auditor-General issued a non-standard audit report. It included an emphasis of matter paragraph noting that, like other DHBs, the Wairarapa DHB has been investigating issues associated with the calculation of employee entitlements under the Holidays Act A national approach is being taken to remediate these issues, but it will be complex and timeconsuming due to the nature of DHBs employment arrangements. The matter might result in significant liabilities for some DHBs. The auditor recommended major improvements to Wairarapa DHB s financial information systems and controls. He noted that the DHB s financial management information system is no longer supported by a supplier. We discuss this issue below. He also identified deficiencies in internal controls and processes. The auditor rated the DHB s management control environment as good, while recommending that improvements be made in two areas. He recommended a DHB-wide asset management plan, and that the DHB make its processes for dealing with conflicts of interest during procurements clear and consistent. The DHB s performance information and associated systems and controls were rated good. Recommendations included improving and adequately documenting the quality assurance systems and processes for clinical coding (classifying clinical information for statistical and research purposes). The auditor also noted that several issues remain unresolved from the 2016/17 audit. We hope that the DHB will act on these matters in the current financial year. Financial management information system no longer supported Support is no longer available for the computer system used to manage the Wairarapa DHB s finances. If the system breaks, it will not get repaired. The DHB told us that it has decided to go onto the Hutt Valley DHB s Oracle system, starting in March or April Later on, it would then be straightforward to move to the National Oracle Solution (NOS), which is intended to be used by all 20 DHBs. Meanwhile, the NOS has had problems. Cabinet decided in June 2018 to pause the NOS development while considering more funding for a re-plan of the NOS programme. At that point, the DHBs had spent $95 million on the project. It was decided not to complete some supply chain and change management functions that were part of the original plan. This means that the NOS asset is impaired because its carrying value does not reflect the (reduced) future expected benefits. The total value of the asset to all DHBs was impaired by 3

4 $5.8 million in 2017/18. Wairarapa DHB has decided to provide for an impairment of $668,000. Shared services The DHB works closely with other DHBs. Its patients use specialist services provided by Hutt Valley, Capital and Coast, and MidCentral DHBs. Wairarapa DHB shares 67 services with Capital and Coast and Hutt Valley DHBs. These include mental health and addiction services and information technology. Wairarapa DHB and Capital and Coast DHB share the provision of a chemotherapy service in the Wairarapa. Although it is expensive, Wairarapa DHB said it saves on transporting and accommodating patients in Wellington. The DHB said that it used to have a chief executive from Hutt Valley who commuted to the Wairarapa one day a week. It believes it achieves better outcomes for its population by having a fully local management team and local delivery of services. Inter-district flows (IDFs) that is, patients travelling to other districts for certain services account for about a quarter of the DHB s total budget. However, with the DHB s ageing population, this cost has been going up. Over the past three years, the cost of IDFs has increased from about $30 million to $40 million. The DHB s strategies to keep IDF costs down involve long-term investments in primary care. Mental health Wairarapa DHB shares mental health and addiction services with Hutt Valley DHB and Capital and Coast DHB. The DHB told us that, the previous year, it had the highest suicide rate in New Zealand. It reviewed its mental health and addiction services and created a suicide action plan. Called Too many, Wairarapa, it focuses on males, Māori, and youth, and included community forums, promotional activities, and working with groups in the community. We were pleased to hear that Wairarapa s suicide rate in 2017/18 was half the previous year s. We hope that the DHB continues to monitor the results of Too Many, Wairarapa, and considers sharing the action plan with other DHBs. Virtual consultations in primary care We were interested to learn that the DHB is trialling imoko, an initiative that aims to help children with minor symptoms such as sore throats, sore ears, school sores, and nits. With parental consent, teacher aides at school can facilitate virtual consultations with an off-site doctor. The aim is to prevent mild conditions from becoming serious. Prescriptions can be sent to parents via an app. The programme is evaluated every six months. We look forward to hearing about its effectiveness. 4

5 Child health assessment tool To improve interventions for children, Wairarapa DHB is considering implementing an assessment process called ACE. ACE is an American child health assessment tool based on research about social factors that affect health. If a child faces a number of social issues, their health or wellbeing may be at risk. The programme would be run as a pilot with Otago University. It would involve a variety of agencies, including Tamariki Ora and regional public health organisations. The DHB is exploring what steps should be taken to mitigate social effects on a child s health, and what services the DHB would need to develop if it used the tool. Earthquake strengthening needed Wairarapa Hospital is based in a single-storey building built in After it was revalued in 2018, the DHB discovered that the building needs seismic strengthening. The Auditor- General noted that the hospital s value will be affected by this finding. At the time of our hearing in November 2018, the DHB was working to partially remedy the problem. It expected this work to be completed in January or February The DHB does not know what the final bill will be for bringing the building up to standard. However, because of the high standard set for hospitals under the Building Code, it will be significant. Workforce planning According to the DHB s workforce data, only 5 percent of its employees are Māori. Its workforce is also ageing about 38 percent of its staff are over 55 years old. The DHB believes the actual number of Māori staff could be higher, as some staff may not have disclosed their whakapapa. Also, 25 percent of the DHB s workforce s ethnicity is unknown or unspecified. 2 We heard about Kia Ora Hauroa, a programme run by Wairarapa DHB on behalf of the six DHBs in the central region. Wairarapa DHB works with educators and schools to encourage Māori students to consider careers in the health services. Scholarships are also available in areas including midwifery and dentistry. 2 Ibid, pp

6 Appendix Committee procedure We met on 28 November 2018 and 6 March 2019 to consider the annual review of the Wairarapa District Health Board. We heard evidence from the Wairarapa District Health Board and received advice from the Office of the Auditor-General. Committee members Louisa Wall (Chairperson) Dr Liz Craig Angie Warren-Clark Jenny Marcroft Dr Shane Reti Hon Michael Woodhouse Hon Nicky Wagner Matt Doocey Hon Ruth Dyson, Harete Hipango, and Alastair Scott participated in some of this review. Advice and evidence received We received the following documents as advice and evidence for this annual review. They are available on the Parliament website, along with a transcript of our hearing. Office of the Auditor-General, Briefing on the Wairarapa District Health Board, dated 28 November Wairarapa District Health Board, Responses to written questions, received 14 February Wairarapa District Health Board, Responses to post-hearing questions, received 10 February