Report of the Health Committee

2015/16 Annual review of the Lakes District Health Board, the Tairawhiti District Health Board, the Taranaki District Health Board, and the Whanganui District Health Board Report of the Health Committee Contents Recommendation 2 Introduction 2 Financial performance of each DHB 2 Attracting workforce to regional areas 3 Providing access for marginalised and deprived communities 4 District Health Board elections 5 Mental health 6 Population-Based Funding Formula 7 Home Based Support Services 9 Appendix 10

Lakes District Health Board, Tairawhiti District Health Board, Taranaki District Health Board, and Whanganui District Health Board Recommendation The Health Committee has conducted the annual reviews of the 2015/16 performance and current operations of Lakes District Health Board, Tairawhiti District Health Board, Taranaki District Health Board, and Whanganui District Health Board, and recommends that the House take note of its report. Introduction We held a joint hearing with Lakes District Health Board (DHB),, Taranaki DHB, and on 8 March 2017. We were interested in the challenges faced by smaller, regional DHBs. Each DHB gave an individual overview before we questioned them as a group. Financial performance of each DHB serves a population of about 100,000, covering 9,570 square kilometres. It provides health and disability support services to the Rotorua, Taupo, Mangakino, and Turangi districts. In 2015/16, the DHB s total revenue was $337.174 million and its total expenses were $342.700 million. This resulted in a deficit of $5.315 million, against a budgeted surplus of $619,000. The main reasons for the deficit were the cost of locums to cover vacancies and leave, and a higher-than-expected demand for hospital services, which were primarily acute cases. Taranaki DHB Taranaki DHB serves a population of about 118,000 people, covering 7,000 square kilometres. It includes New Plymouth and the towns of Stratford, Hawera, and Opunake. In 2015/16, the DHB s total revenue was $355.448 million and its total expenses were $359.233 million. This resulted in a deficit of $3.669 million, against a budgeted surplus of $737,000. The primary reasons for the deficit were acute volumes being 14 percent over budget and the unbudgeted cost of locums to cover vacancies, long-term sick leave, annual leave, and sabbaticals. stretches from Hicks Bay in the north to Gisborne in the south. It covers an area of 8,351 square kilometres. The DHB s total population in the 2006 census was 44,499. In 2015, the DHB changed its approach to Māori health. This was because life expectancy for Māori in the district was seven years less than for non-māori. The DHB recognised that 2

it needed to do something different to get better results. The DHB rebranded itself as Hauora Tairāwhiti. The DHB is working closely with other agencies, including the Ministry of Health, the Ministry of Social Development, and the Police, to work with families to improve outcomes for Māori people from a younger age. In 2015/16, the DHB s total revenue was $167.368 million and its total expenses were $174.559 million. This resulted in a deficit of $6.657 million, against a budgeted surplus of $316,000. The reason for the deficit was higher-than-expected expenditure on personnel. serves a population of 62,210. It covers people who live in the Whanganui and Rangitikei Territorial Authority areas, as well as parts of the Ruapehu Territorial Authority. It covers a total land area of 9,742 square kilometres. The two main centres are Whanganui city, with a population of about 40,000, and Marton, with a population of about 4,700. In 2015/16, the DHB s total revenue was $236.886 million and its total expenses were $237.543 million. This resulted in a deficit of $567,000, against a budget of breaking even. The DHB reported that the deficit was driven by unbudgeted increases in Multi Employer Collective Agreements, increased elective volumes, and higher-than-budgeted costs for locums. Attracting workforce to regional areas Taranaki DHB Taranaki DHB acknowledged that recruitment in provincial areas can be a struggle. However, it does reasonably well as a small DHB because people like the mountain and the sea. It said that its environment attracts people and that its culture seems to hold people. The DHB often identifies people during their training and encourages them to come back when they graduate. Health Workforce New Zealand was established in 2009 to provide a sector-wide approach to New Zealand s workforce challenges. Some years ago, a shortage of nursing graduates was identified. The DHB said that that the workforce strategies are starting to see results. In recent years, more nurses have been trained. However, the older workforce is not moving on quite as quickly as new graduates are qualifying. This creates a tension at the end of each year to employ these new graduates because there is a shortage of nursing jobs. The DHB has several staff who were trained overseas. These people primarily work in obstetrics and psychiatry because it is hard to recruit New Zealand-trained staff in these areas. Most of its senior medical officers (SMOs) are New Zealanders or were trained in the United Kingdom. told us that a fair proportion of its senior medical staff trained overseas. Although it values the expertise and the views that people trained overseas can bring, the DHB would like to increase the number of New Zealand-trained people on its staff. It is now starting to see New Zealand-trained people coming to work at the DHB. 3

The DHB has worked on a professional education programme with Otago University for several years. This brings nursing, pharmacy, and medical students to Tairawhiti for a block course in their final year. The group works together in a trans-disciplinary way. The programme gives the cohort a better understanding about working in areas with high proportions of Māori and in smaller rural communities. The DHB finds that, when people graduate, they tend to come back or go to other rural communities to work. We were pleased to hear that the community plays an important role in welcoming the partners and families of the DHB s staff. told us that a large percentage of its staff is very stable. However, a portion turns over more rapidly. This includes the SMOs. Several international medical graduates work in the DHB. In recent years, recruitment in the international market has improved because of difficulties in the northern hemisphere. The DHB no longer has the difficulties recruiting senior doctors that it used to have. It also has a lot more New Zealand-trained staff coming through. In the area of nursing, ageing staff is an issue. The DHB is considering ways to support nurses who develop degenerative conditions as they age because of the physicality of the role. The DHB supports s comments about the importance of welcoming the families of its staff. Many senior doctors who move to Whanganui have partners who would like professional jobs. This can be a problem because there are often not suitable jobs available for them. In recent years, Whanganui has done well out of Auckland s housing problems. It said that it has had some excellent staff move from Auckland to Whanganui. told us that its turnover is quite low, particularly in nursing. It does not have problems recruiting doctors, particularly younger doctors who move to for the outdoor lifestyle. There are increasing numbers of New Zealand senior doctors, and its use of locums is decreasing. The DHB has problems recruiting to psychiatry and gynaecology roles. The DHB has started a programme which specialises in medicine for rural hospitals in places such as Taupo. Although it is getting established, it has managed to attract some very good staff. Providing access for marginalised and deprived communities s dispersed population creates challenges for providing services, both physically and in the way people need to access them. s philosophy is to find more effective ways of working for people and tailoring services that work for them. The DHB is working with iwi and government agencies to do so. 4

Turanga Health is a Māori health provider and general practice based in Gisborne. The DHB has provided it with an IT-compatible mobile clinic. It travels to workplaces, such as LeaderBrand, a horticultural business, and provides health checks and assessments to workers. This service provides huge benefits to people who may not have the time to visit their GP. The E Tipu E Rea programme supports the 20 percent of the most vulnerable children in the district. This is in addition to the Well Child services. The programme works with iwi providers to target families and provide more support for children from conception to five years. The DHB has noticed a reduction in children being admitted to hospitals for ambulatory sensitive hospitalisations. These are hospital admissions that could have been prevented if people had gone to primary care earlier. The E Tipu E Rea programme s goal is to have the happiest, healthiest children in the world by age five. We commend the DHB for this work. The has Hard to Reach strategies for a range of services. It is now using the strategies that it used to improve immunisation rates to improve child oral health in its area. Although the DHB has high rates of enrolments, this does not mean that children will go to dental appointments. This is a problem because Whanganui water is not fluoridated. The DHB sees the strategies as an investment because it sees benefit down the track. told us that many children and Māori do not attend clinics. The DHB has a range of approaches, including texting, calling twice before an appointment, and having nannies collect children for their appointments. The DHB said that the solution needs multiple approaches and that one size does not fit all. District Health Board elections DHB elections were held in 2016. We asked how the DHBs dealt with boards that regularly change. The has four appointed and seven elected members. The DHB had about 28 candidates for the election. The high number of candidates can be a challenge for the public in deciding who to vote for. The DHB addressed this by informing the public before the election about the skills that board members need, including governance, an understanding of health issues, and community connections. The chair told us that the board needs to ensure that it does not lose momentum after an election, because the community, the Minister, and Parliament have expectations. The DHB told us that it is important to have an induction process to get people up to speed quickly. The DHB had seven new members after the election, but it is fortunate that some of them have strong backgrounds in health. 5

has seven elected members. Four of the members are women, and the majority are Māori elected members. The members have a high profile in the community and a broad understanding of issues. The DHB told us that board meetings after an election can be slightly longer as new members find their footing. The DHB allows committees under the delegation of the board to have full powers (contracts of up to $5 million, purchase of hardware up to $1.3 million). This helps committee members feel more engaged. s chair believes that it is healthy to have change. The DHB has five new members. Although people often come in with a community perspective that may not always be positive, when they see the complexity of the role, they can take that perspective back to the community. The DHB told us that people coming on to a committee with a single issue can be a risk. However, it finds that people who come in on a single issue get drawn into the interesting nature of health. Mental health New Zealand Mental Health and Addictions KPI programme The New Zealand Mental Health and Addictions KPI programme is an initiative led by providers. It is designed to improve performance throughout the mental health and addictions sector. Most DHBs are not achieving the programme s target range in at least some areas. The targets that are most commonly not achieved are those relating to pre-admission community care, post-discharge community care, and 28-day readmission rate. We note that the pressure on mental health services in DHBs and in the community is similar throughout New Zealand. We asked why the rates in these areas were quite a bit worse for than for the other DHBs. We understand that some of that is because of how the data was supplied but also note that the DHB s readmission rates are much higher than other DHBs. We asked how the DHB is addressing the reporting of the data and about any other problems, noting the DHB s high suicide rates. The DHB told us that it has changed how it collects the data, resulting in improved figures. The DHB is concerned by the readmission rates and suicide rates. It is also concerned about people presenting with a combination of drug and alcohol issues and mental health issues. It said that its mental health services are having problems coping with the volumes. The chief executive said that it is a common problem for all DHBs, particularly the exacerbation of mental health problems by drugs and alcohol. The DHB said that this is more common in areas of high deprivation. The DHB told us that there is a disproportionate number of youth suicides in the region. In Reparoa, one youth suicide was followed by three or four suicides. The DHB established a community liaison group to work closely with the community to try to prevent what are known as copycat suicides. 6

Provision of resources for mental health services We asked whether the health budget was providing adequate resources to deal with the increased demand for mental health services, including more holistic solutions and the involvement of other community groups and government agencies. is concerned about the complexity of dealing with people with mental health and drug and alcohol issues, and about patients ending up in police cells rather than receiving medical treatment. Many patients are not enrolled with any mental health services. The DHB said that it needs to work closely with the Police to appropriately support these people. The DHB told us that it can choose how it uses it resources. It does not believe that it should wait for additional funding from the Ministry of Health because it can divert funding within the DHB when necessary. Taranaki DHB Taranaki DHB is concerned that more youth in the region are experiencing mental health problems. The psychiatry team recently told the board that it appears that youth are less resilient. The DHB asked whether the New Zealand education curriculum is keeping pace with some of the issues that youth are dealing with. The DHB believes that a good resilience programme, in collaboration with the Ministry of Education, that teaches coping tools would help. The DHB considers economic development important in rural areas. It told us that, when the rural sector experiences downturns for example, when the dairy payment drops the rest of the community is affected. The DHB told us that rural trusts collaborate with the community to ensure that they are adequately supported. has recently focused on peer-support programmes. It has seen success with a peer-support programme in Marton. The DHB considers this programme to be much more cost-effective than using highly qualified professionals. The DHB still has a high suicide rate, particularly in young to middle-aged men. It has a forensic mental health unit and is getting some good results from a resilience- and strengthbased approach. is aware that some factors within iwi and family affect demand for mental health services. It believes that the E Tipu E Rea programme, which aims to have the happiest, healthiest children by the age of five, sets people up for a healthy life. The DHB is also looking at other preventative measures to reduce the demand for services. Population-Based Funding Formula The Population-Based Funding Formula is a tool used to allocate DHB funding based on the needs of each DHB s population. The formula considers a DHB s population, along with the age, socio-economic status, ethnicity, and gender of its population. 7

The formula makes adjustments to account for the diseconomies of scale of providing services in rural areas, unmet need, and providing services to overseas visitors and new refugees. The unmet need adjustment targets funding at populations that have difficulty accessing health services. The target groups are people living in areas of high deprivation, Māori, and Pacific people. In our annual review hearings of other DHBs, we have heard that DHBs often have problems ensuring that their population data is accurate. We asked each DHB how, or whether, they thought the formula could be improved. The population data for the formula is based on the New Zealand Census. told us that it has a notoriously low level of registration for a census. It considers that enrolments in primary health care would be a better way of obtaining population figures. The chief executive of said that she is a passionate supporter of the formula, having looked at studies on funding models in other jurisdictions. She believes that the formula needs to be refined but considers it the best of the available models. The DHB acknowledged that the smaller regions benefit from the smoothing that the Ministry of Health does to account for smaller populations. However, it said that this is balanced by the costs of having to maintain a secondary 24-hour service in the region, which is expensive. Taranaki DHB Taranaki DHB considers the formula to be reasonably fair but thought it could do with some tweaking. The 2011 census was delayed because of the Canterbury earthquake. However, when it was done in 2013, the DHB s population had increased by 8,000 people. This had not been anticipated, and services had been provided for these people between censuses. Statistics New Zealand is now telling the DHB that it has the slowest-growing population in New Zealand. The DHB disputes this because New Plymouth District Council is receiving about the same number of residential building consents as the Bay of Plenty. The DHB suggested that collecting population data more frequently or using another method to collect the information would improve the application of the formula. has the highest-need population of all DHBs. It would not like to move away from the formula because the unmet need and rural diseconomy adjusters are important for the DHB. The DHB receives about a 20 percent increase in funding compared to its population when the adjusters are added. The DHB noted that everybody has an NHI number. It considers that measuring primary health organisation enrolments would obtain more realistic figures than a three- or fiveyear census. We asked about whether the high-need populations the DHB was targeting were less likely to enrol in a primary health organisation. The DHB responded that people were more likely to enrol in primary care than to complete a census. 8

We were interested to hear that the census now includes New Zealander as an option for ethnicity. The DHB expressed concern that this may affect funding for Māori if they choose to identify solely as New Zealanders. Home Based Support Services Home Based Support Services (HBSS) are services provided to people over the age of 65 to enable them to remain living in their own homes as they age. DHBs fund and purchase HBSS from non-government service providers. DHBs use the International Residential Assessment Instrument (InterRAI) to assess an individual s service needs. We asked what pressures the DHBs were experiencing on HBSS, particularly given that workers are now paid for travel between clients. Taranaki DHB Taranaki DHB told us that one of its biggest challenges was the cost of rest home and hospital care because of an ageing population. In the last 12 to 18 months, the cost of HBSS has increased and the rate of inpatient care is decreasing. We were pleased to hear that HBSS costs a lot less than inpatient care. The DHB thinks the HBSS is working well for its population. Although it considers InterRAI unwieldy, it likes that the tool is consistent throughout New Zealand. The DHB told us that it can be difficult to get people with the appropriate skills to provide HBSS in rural populations. In its experience, paying for workers travel time has not been a major cost for the DHB so far. is encouraging people to use HBSS rather than move into residential aged care facilities. It has increased its expenditure on HBSS as a result of this strategy. However, the DHB has also seen an increase in hospital and residential aged care use. The DHB is supporting an ageing Māori population, many of whom experience the conditions that come with ageing at a younger age than non-māori. The DHB is finding that many older people are less supported by whānau members than in the past. This is because people have migrated out of rural areas or overseas. supports the in-between travel payments because it believes that the payments help providers recruit a high-quality and stable workforce. It considers HBSS an important tool to prevent loneliness and create social structures for elderly people whose family does not live nearby. The DHB believes that it needs to do more to maximise HBSS s potential. 9

Appendix Committee procedure We met on 8 and 22 March 2017 to consider the annual review of the Lakes District Health Board, the Tairawhiti District Health Board, the Taranaki District Health Board, and the Whanganui District Health Board. We heard evidence from the four district health boards and received advice from the Office of the Auditor-General. Committee members Simon O Connor (Chairperson) Dr David Clark Sarah Dowie Julie Anne Genter Barbara Kuriger Melissa Lee Scott Simpson Barbara Stewart Poto Williams Advice and evidence received The documents that we received as advice and evidence for this annual review are available on the Parliament website, www.parliament.nz. They are listed below: Office of the Auditor-General, Briefing on the Lakes District Health Board, Tairawhiti District Health Board, Taranaki District Health Board, and Whanganui District Health Board, dated 8 March 2017. Lakes District Health Board, Responses to questions, received 8 December 2016. Lakes District Health Board, Responses to post-hearing questions, received 20 March 2017. Tairawhiti District Health Board, Responses to questions, received 31 January 2017. Tairawhiti District Health Board, Responses to post-hearing questions, received 17 March 2017. Taranaki District Health Board, Responses to questions, received 30 January 2017. Taranaki District Health Board, Responses to post-hearing questions, received 20 March 2017. Whanganui District Health Board, Responses to questions, received 30 January 2017. Whanganui District Health Board, Responses to post-hearing questions, received 20 March 2017. 10