Living Within Our Means to Achieve a Balance

Today I want to share with you a really important message which I hope as many staff as possible will share and discuss. It’s no secret that we’ve been “thriving in difficult times” for some years, but recently this has intensified significantly, requiring a different level of response from our organisation. I want to be upfront and honest with you about this and about how we intend to respond over the coming months. However, I would also like to add at this point a note of optimism. Counties Manukau Health is a marvellous organisation that has risen to, and met, our financial challenges in the past and I expect us to be able to meet this one.

CM Health receives around $1.3b a year in health funding. We get increases every year, but because of tighter times and lower inflation, recently the increases have been smaller than in the past. Added to this, costs across CM Health are always increasing. There are a number of reasons for this, including an increasing demand for health services from our population and that we are about to open the new Clinical Services Building, which we need to fund. The end result is that we need to better evaluate revenue and savings opportunities across the organisation in order to break even in the 2013/14 financial year, while continuing to meet increasing demand and without reducing our high quality services.

We need to work smarter. We will not reduce the quality of our services. Instead we need to embrace our ingenuity and think creatively in the months ahead. The words of Kiwi Ernest Rutherford, who split the atom, spring to mind. When asked how he made such breakthroughs, he replied “we have no money so we have to think”.

I want to be upfront about our reality but at the same time, I’m hugely optimistic. When the global financial crisis hit, we made a strategic decision to live within our means by looking at how we work, at our processes and improving quality. This was a harder road to follow than traditional cost cutting measures but it was necessary if we wanted to continue being an excellent healthcare system. The approach has been very successful, with approximately $60 million saved through our Thriving in Difficult Times (TIDT) programme over the last three years. At the same time, we’ve continued to improve our productivity, become more efficient, meet ministerial targets and, most importantly of all, deliver safer services to our patients.

We can therefore be very positive about our ability to meet this new challenge by working smarter, in partnership with you and with staff organisations. We also need to bear in mind that healthcare systems worldwide are grappling with this problem and we are one of the few systems that’s actually still growing. Many others are in much tougher situations, such as the UK’s National Health Service which needs to save £20b over five years. While there is no doubt that we have hard work ahead, we are faring well when compared to others and we have a unique opportunity to be a leader in addressing what is a global problem in healthcare.

It will, however, require hard work and commitment from us all. To help address this hurdle, we have started by establishing a Financial Sustainability Taskforce which is looking systematically at our costs, how we’re working, how we’re spending across the whole system and revenue-generating opportunities. From this process, we will develop plans and proposals to be implemented with immediate effect from July 1 this year. We want to hit the ground running and start the next financial year with our cost base reset at a sustainable level in order to ensure a balanced and healthy financial future for CM Health.

You may ask what the difference is between Financial Sustainability and what we have done before? TIDT focussed very much on costs and simpler efficiencies in order to make important and valuable savings for the organisation. What Financial Sustainability now has to do is to work in partnership with our colleagues and to look much deeper across the whole health system, including at all community and hospital based services. Together we will assess and benchmark how effectively we are working as a system, including the evaluation of our models of care, revenues, cost structures, barriers to service delivery, staffing models and whether working with regional colleagues might lead to savings. In the next three months we will work to identify a selection of opportunities, which we will discuss and prioritize with our teams and colleagues. Following that we will be preparing implementation plans, to be effective 1 July.

It’s hugely important to me to point out that our objective is to look at how we work in order to ensure that we break even. By achieving a break even position, we will be able to minimize any negative impact on staffing. I know how hard you work and I genuinely want to grow the fantastic culture we’ve developed at CM Health over many years. I also want to continue investing in you and your skills so that you can continue to invest in our patients. My aim is to retain our strategic shape of the Triple Aim and not lose the essence, or direction, of our organisation.

I’m also aware that this news may cause ‘change-fatigue’ for some staff. I think we’re all living in an atmosphere of constant change and I doubt there has been, or ever will be, a time when things stay the same. The important thing, though, is to empower you to manage, and contribute to, the change rather than having it ‘done’ to you. As such, I want to keep staff involved and engaged in this process, and will be holding formal meetings to discuss this with you face-to-face. I will also continue to update you on our progress, both through those meetings and this blog. Financial Sustainability will involve staff and unions across the organisation and our success depends on your support and help.

As part of this work, Dr Claudia Wyss has been seconded to our Financial Sustainability team. With her long-standing history of working with us, including as a doctor, Claudia has a strong understanding of our priorities and culture. She also brings deep analytical expertise and experience in innovative thinking, and is looking forward to working alongside the services to identify opportunities.

As I said, I really am positive about our ability to meet this challenge in the same way we have previously faced others and ended up delivering better services as a result. I believe that an ability to continually review and improve is a core part of Team Counties’ DNA, and that this will equip us well in the coming months. For several years we have been recognised as a very successful, high-performing District Health Board and completing this process will only enhance that proud reputation.



Author: Geraint Martin

Geraint Martin was appointed Chief Executive Officer of Counties Manukau DHB in December 2006. It is one of the largest District Health Boards in New Zealand and services a population of half a million. He has significant experience over 30 years in national policy & in managing both primary and secondary care . Previously, he was Director of Health and Social Care Strategy at the Welsh Government .He authored a radical 10 year strategy of reform, including the successful “Saving 1000 lives” Campaign.Until 2004, he was CEO at Kettering General Hospital & had held senior positions in London & Birmingham.He has worked closely with clinicians in improving clinical standards,patient safety,chronic disease management & managing acute care to reduce hospital demand.In NZ, He has promoted clinical quality and leadership as central to improving patientcare. This has led to a significant increases in productivity and access, whilst maintaining financial balance. CMH has completed in 2014 a $500 m capital redevelopment programme, the largest in New Zealand. A central part of this is the establishment of Ko Awatea,the Centre for Innovation and Research which will underpin CMH as one of the the leading health systems in Australasia.In 2008, he chaired the Ministerial Review of Emergency Care in New Zealand, and in 2013 was an member of the Expert Advisory Panel on Health Sector Performance. Geraint has an MSc in Health Policy from Birmingham University .His post-graduate work has focused on health economics and Corporate Strategy . He is adjunct Professor of Healthcare Management at AUT and Victoria University, Wellington Elected in 2006 as a Companion of the Institute of Healthcare Management, previously he was an Associate Fellow at Birmingham University.He is is Chair of the Auckland Philharmonia Orchestra, a member of the Institute of Directors, on the Board of the NZ Institute of Health Management & previously the Board of The NZ Health Quality and Safety Commission.

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