Researchers have found big holes and major discrepancies in records of how almost half a billion dollars is spent propping up the country's public health system.
They warn there is no sign the nationwide health reforms will fix this.
Photo: RNZ / Vinay Ranchhod
The Otago University research found District Health Board (DHB) spending on contractors and consultants rising quickly but being poorly tracked for the public.
"When you look at this, it really looks like there is no transparency," researcher Dr Adeel Akmal said.
"And one of the ways to reduce misuse of public funds is by increasing transparency."
National's health spokesperson Dr Shane Reti said he became aware of the problem when RNZ sent the research to him last week, and he would be asking the Auditor-General to brief Parliament's Health Select Committee.
"Compared to what's presented to us at Health Select Committee [by DHBs], there are a number of differences and deletions, information they [researchers] could no longer find, vastly different numbers," Reti said.
National's health spokesperson Dr Shane Reti. Photo: RNZ / Angus Dreaver
"And if the health select committee is not getting accurate information, that's a problem."
From the patchy records provided, the research estimated the 20 health boards spent $430m on external contractors and consultants in the three years to 2019 - or 1.25 percent of the total health budget.
The select committee "must intervene before this reliance ... makes healthcare budgets even more stretched", the study said.
Of the 20 DHBs, 12 provided substantially different answers to the researchers than they did to Parliament.
The study shows $177m going on outside medical services, such as private operating theatres, and $65m on service improvement and business management consultants, like those the Health Ministry ordered Canterbury DHB to use in the period leading up to mass executive resignations in 2020.
Akmal said some spending was necessary, but the lack of standardised criteria meant it was impossible to tell if it was being spent well.
A glance at the latest 2020-21 DHB annual reviews illustrates the random reportage: Capital and Coast DHB lists 15 pages of contractor names for $6.8m spending, while MidCentral DHB offers just a single line for $5m. Both spent substantially more than the previous year.
Many boards do not provide maximum hourly or daily rates as they are asked to.
Otago University Business School dean Robin Gauld, another of the researchers, said several DHBs were "resistant" to the questions and all struggled to provide answers.
"It's mystifying. And it's actually extremely difficult for the public to get information in the first place," Prof Gauld said.
Otago University Business School dean Robin Gauld. Photo: RNZ / Ian Telfer
Often the boards gave no reason for eliciting expensive outside help.
As a result, in-house skills were not being built up and retained, a situation that had evolved in New Zealand to the point it was seen as acceptable, he said.
This extended to the country being one of the few developed nations to lack a public sector unit in health devoted to guiding hospital service improvement and the like, Gauld said.
He said the health reforms set to abolish DHBs in a few months were also relying on many outside consultants, and the signs for change were not good.
"I don't think it's on the radar.
"I think it will evolve into a national problem."
In theory, the new Health New Zealand and Māori Health Authority that begin on 1 July should have national oversight of outside contracting and manage them better, but "they have their hands full" and probably lack "motivation" to change things, Gauld said.
RNZ asked the DHBs for comment. Most did not respond; Auckland declined.
Southern DHB chair Pete Hodgson said each board must answer hundreds of select committee questions each year.
He did not know much about spending on contractors and consultants, he said, but if Robin Gauld was saying "we are not getting it right, he's probably right".
Dr Reti said the health reforms made it timely to look at this.
"I'll raise the question with the next Health Select Committee that we should have a briefing with the Auditor-General in the room and look to explore this further," he said.
Labour MP Dr Liz Craig, who chairs the select committee, said in her opinion the use of contractors was a policy matter for the Health Ministry.
The Office of the Auditor-General said it audited DHB annual reports and briefed select committees on the main points.
"We don't audit other specific information that DHBs provide to select committees," it said.
"DHBs are not required to separately disclose expenditure on contractors and/or consultants in their annual reports."
The Health Reform Transition Unit said the research itself noted "a genuine need for contractors and consultants".
"The move to a nationally co-ordinated health system will support standardised approaches across a range of functions, including public reporting.
"Ensuring accurate and transparent reporting is a priority for all publicly funded health organisations, and will continue to be the case."
