Dirty politics in action: smear campaign in New Zealand’s health system

Health systems are delivered by highly committed and skilled health professionals overwhelmingly driven by compassion. Unfortunately many have to work in environments where leadership cultures are antithetical to that compassion.

Broadly speaking the prevailing leadership culture in New Zealand’s health system is managerialism which involves decision-making through a very narrow lens that is management rather than clinically and patient-centred driven. Within district health boards (DHBs) this can be alleviated by the closer proximity between senior managers and health professionals and largely overcome where there is sufficient oxygen to enable genuine engagement between them. The more distributed the engagement at all levels the more clinically and fiscally effective it is.

But with the Ministry of Health it is different. There is no equivalent proximity and the managerialism takes the form of a top-down, more distant, bureaucratic centralism leadership culture. When it comes into conflict over specific issues with a DHB that has progressed strongly in the direction of genuine engagement then it is a recipe for, at best, negative tension.

From negative tension to dirty politics

At worst it can degenerate into dirty bureaucratic politics as was experienced by Canterbury DHB (CDHB) in its escalating conflict with the Health Ministry over the recovery response to the devastation of the Christchurch earthquakes in 2010-11. This is discussed in detail in my two online articles published by the Democracy Project: https://democracyproject.nz/2021/04/15/ian-powell-a-very-bureaucratic-coup-part-one/ and https://democracyproject.nz/2021/05/19/ian-powell-a-very-bureaucratic-coup-part-two/.

The dirty bureaucratic politics was a smear campaign falsely claiming that CDHB’s increasing operational financial deficit was due to financial mismanagement by its senior management team. To succeed it was necessary to destroy the consensus reached between CDHB and the Health Ministry in 2018.

The consensus was based on a report by Garry Wilson (a business consultant) which, consistent with earlier external reviews, concluded that due to the earthquakes the challenges facing Canterbury, including rebuilding, were uniquely different from the other DHBs; they were complex, substantial and far reaching. The consensus recognised that CDHB’s response to New Zealand’s largest natural disaster had been exemplary and offered many lessons both for New Zealand and internationally.

To undermine this consensus and smear the competency of the senior management team the first step was to appoint Lester Levy as Crown Monitor reporting to the Health Ministry. The second was to commission Ernst & Young business consultants to do a ‘hatchet job’ on the team’s financial acumen. They did this by misusing nurse staffing data to argue CDHB was well overstaffed https://democracyproject.nz/2021/02/09/ian-powell-when-business-consultants-are-commissioned-for-hatchet-jobs/. Extraordinarily these same business consultants are the government’s main advisers on its health restructuring!

The truth is out there

The truth is out there, as they say in the cult television programme X-Files, but it doesn’t require Agents Mulder and Scully to find it.

To begin with the review that led to the Way Forward Report discussed above raised no concerns about senior management’s financial acumen and recognised that the root of CDHB’s financial challenge was the earthquake recovery response.

But what about within central government? Treasury has a process called the Investor Confidence Rating (ICR) for independently assessing the capability of DHBs and other public sector agencies to run and manage assets and capital projects. For 2016 Canterbury DHB was assessed as a ‘B’ which was the second highest ranked DHB (Counties Manukau, whose new Chair Lester Levy was attacking its financial management – note the pattern – scored an ‘A’).

According to releases under the Official Information Act the Health Ministry attempted to overturn CDHB’s ICR assessment (or alternatively have it not published) because it was contrary to what it had been advising government. The resilient CDHB senior management forced the issue leading to the results being confirmed and released.

The ICR process was again undertaken three years later (2019). Once again CDHB achieved a ‘B’ rating which this time was the highest of all the 20 DHBs. Ironically, largely under the leadership of Lester Levy Counties Manukau dropped from ‘A’ to below ‘B’.

What about other business consultants? In 2015 PricewaterhouseCoopers was commissioned to review CDHB’s financial position. Its first report published in December led then Health Minister Jonathan Coleman to conclude that CDHB was in a “relativity stable financial position.” It also confirmed that earthquake recovery was the driver of CDHB’s financial challenges.

As for a completely independent assess one can go no further than the Crown auditors, Audit NZ, whose responsibilities include ensuring that audit results are tabled in Parliament. It is independent of crown agencies and departments. If one can’t trust Audit NZ’s financial audits, who can you trust?

Over the past decade of its audits Canterbury was either the highest rated DHB or in the top quartile of DHBs. Given that no other DHB (or other organisation outside Canterbury) had gone through a decade of natural disasters beginning with earthquakes, this is an impressive performance.

CDHB was rated ‘Good’ for both ‘Management control environment’ and ‘Financial information systems and controls’ for each of the 2016-17, 2017-18 and 2018-19 financial years.  For ‘Performance information and associated systems and controls’ CDHB was rated ‘Very Good’ for each of these same years.

The audit for the 2019-20 financial year is yet to be published but it appears that CDHB’s high ratings continue. This is reinforced by reliable accounts that Lester Levy tried to contest Audit NZ’s assessment; rather questionable behaviour.

Sadly the truth didn’t prevent the smear campaign from succeeding. Despite this success smearing still continues at a different level. Several in the health system continue to be shocked by the ongoing vindictiveness towards CDHB’s former senior management team displayed by a small number of senior Ministry officials when they visit their Molesworth Street headquarters and in other interactions, usually on unrelated matters.

I doubt that anything could contrast more with the intuitive compassion of health professionals than the dirty politics and smears that drove this scandal.

One thought on “Dirty politics in action: smear campaign in New Zealand’s health system

  1. Thank you for shedding much needed light on the terrible situation that has been allowed to happen and has continued under this government. I find that shocking.


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