Whakaaro: An Inconvenient Truth
Who would not want a brand-new, glass-and-steel, architecturally designed, state-of-the-art, do-it-all medical and health care centre with fully co-ordinated and convenient care for consumers? What problem could possibly exist?
I have attempted to reduce this complicated issue to fundamentals here. I have done my best to stick to facts and to keep my speculations based as closely as possible on facts. My objective is to open the topic to discussion by all concerned people. I feel that the integration issue has not had adequate publicity or consultative discussion and that it is time to do so.
Inconvenient truths
The inconvenient truth is that debt created by building the structure and loss of local control to new management are not free.
The inconvenient truth is that better care co-ordination requires upgrading hospital and rest home information technology, sharing databases, and training carers to use these modern tools, not a new building.
The inconvenient truth is that while awaiting integration, incremental improvements throughout Golden Bay’s medical and health care system have stopped.
The inconvenient truth is that attracting health care professionals requires more than a new building.
The inconvenient truth is that our medical and health care is good now. People get prompt care from experienced professionals at competitive prices. Quality assurance surveys in 2006 and 2009 show high levels of patient satisfaction, and visitors say our after-hours service is better than in their home towns.
The inconvenient truth is that fewer employees working more efficiently in a compact structure will mean hospital and rest home beds will be mingled, and with the medical centre included, infectious disease risks will increase.
The inconvenient truth is that nothing is future-proof. Everything in one place decreases versatility now, decreases versatility to address future needs and increases risk from natural disasters.
The inconvenient truth is that Golden Bay Medical Centre and Golden Bay Community Hospital function adequately. Joan Whiting Rest Home since 2006 has experienced costs exceeding income. Low Government subsidies, increasing licensing standards and employment law have made small independent rest homes uneconomic.
Integration
Integration is defined as housing Golden Bay Community Hospital, Golden Bay Medical Centre and Joan Whiting Rest Home at one site, all owned by a new charitable trust.
The trust would build a completely new structure or would add on to the current Golden Bay Community Hospital. I estimate a new building would cost $8 million [including purchasing land] and adding on at the hospital $7 million [including purchasing both the hospital and land].
Employee cost in the integrated system may be lower. Fewer employees would work more efficiently, with reduced wages on new employment contracts as in Motueka’s new hospital.
Other reductions of costs could occur using modern air conditioning systems in an energy efficient building, getting better deals installing and maintaining technology systems, back-up power generators and major equipment, buying supplies in greater bulk, and contracting with larger companies for special services.
Golden Bay will not get additional Government funding for integration. All other funding will be from banks, investors, community donations, and fees for services.
Cost
Total Golden Bay Medical Centre rent last year was $12,000 for both surgeries. Rent at Joan Whiting Rest Home is zero, but its mortgage is $16,000 per year.
Golden Bay Community Hospital is owned by Nelson Marlborough District Health Board, so rental cost is meaningless, but based on a property value of $1.5 million dollars, a mortgage would be $120,000 per year if the interest rate is 8%.
A new mortgage for integration for $8 million would cost $640,000 per year, interest only, four times current rents! The mortgage would be reduced by the amount received from selling abandoned sites and by cash donations from the community.
Transition costs including securing investors during construction can be estimated as the interest on $8 million. It is hard to imagine construction taking less than a year or two, so transition could easily cost $1 million.
The potential cost savings of integration will not offset increased costs. There will be no money left over for improved or new services or equipment upgrades.
Control
Golden Bay should have majority representation on the integration trust board. Nelson Marlborough District Health Board, Nelson Bays Primary Health, and Tasman District Council are likely to want significant power and will reduce or could even overwhelm local control.
Nelson Bays Primary Health is proposed as employer of all staff and would wield considerable power over staff and management. The trust board surely should tender for these and all other services.
Convenience
Integration does not include dentistry, pharmacy, physiotherapy, alternative carers or mental health services. This will not be a One-Stop-Shop.
What is the likelihood of increasing specialist consultant visits? What will become of the Golden Bay X-ray Services Trust and the X-ray installation? Will ultrasound services in Golden Bay be re-established?
The surgical bus will come no more often, so will an operating suite be included in the new building?
Controversies
Nelson Marlborough District Health Board proposed that Golden Bay form a trust to take over the Community Hospital in the 1990s. Our Community Health Group declined because it feared community resources were inadequate to run a hospital.
Nelson Marlborough District Health Board will have no physical plant and no employees after integration. How long will it continue to support Golden Bay hospital services?
Nelson Bays Primary Health would employ all staff. This is a big job, and it has no similar prior experience. Recruiting and retaining professional staff is already difficult.
Nurses and doctors want competitive income contracts, work descriptions that fully utilise skills and encourage innovative improvement, and collaborative and supportive management.
Nelson Bays Primary Health must hire fewer staff and possibly pay some less than now, otherwise staff costs will increase substantially. Quality of care will be at risk in this situation.
Other costs could rise unexpectedly. Interest rate rises on a large loan could be devastating. How will the new trust cover unexpected cost overruns which are out of its control? What would happen to Golden Bay’s medical and health care system if the trust became bankrupt?
Conclusion
A Kiwi might say, “fix what’s broke,” but, “if it ain’t broke, don’t fix it.” How broken is our system? What needs to be fixed? We have some things that need fixing now, we have some things that need improvement in due course, and we have some things that work very well.
Major costly changes are being proposed. Some changes are needed if Joan Whiting Rest Home is to survive, but many aspects of the proposed integration lack evidence of necessity. Affordability is a significant issue. We need to get this as right as possible. We are willing to invest in our futures, but we must invest wisely.
Dr Vic Eastman
Ed. Readers may notice that this whakaaro is longer than previous contributions to this column. We decieded that the issue was sufficiently complex and the writer's position was sufficiently expert to justify bending the rules.
