Union sounds alarm: Proposed job cuts could imperil $12b health funding, patient safety

The largest union in the country warns that proposed job cuts for audit and fraud experts could severely undermine Te Whatu Ora/Health New Zealand's ability to recover millions of scarce health dollars lost to fraud and overpayments every year.

The warning comes after Te Whatu Ora announced plans to slash 50 jobs from its Audit Assurance and Risk team.

The Public Service Association (PSA) argues that the team generates millions of dollars annually for the government.

The PSA estimates there are 6000 Pacific members in the union. It says the Pasefika Network within the PSA has over 2000 members from various Pacific islands including Fiji, Hawaii, Kiribati, Kuki Airani, Niue, Rotuma, Samoa, Tokelau, Tonga, Tuvalu, and Uvea.

In a statement, Fleur Fitzsimons, National Secretary for the Public Service Association (PSA) at Te Pūkenga Here Tikanga Mahi, says the Audit Assurance and Risk team is a critical unit for Health NZ/Te Whatu Ora.

Fitzsimons says the unit focuses on ensuring that the $12 billion allocated annually to the primary healthcare sector is distributed correctly and protected from fraud.

"But Health NZ is proposing to remove 23 roles, a 28 per cent cut in the workforce, at a time when the health dollar has never been scarcer," she says.

"We see every day how underfunded the health system is, so cutting the very team that claws back overpayments and tackles fraud makes no sense.

"By not detecting overpayments or cracking down on fraud, it means precious health dollars are not being used for their proper purpose of improving patient outcomes no matter where they are in the health system."

PSA has 6000 Pacific members. PSA's Pasefika Network presentatives Ulualofaiga Fesuia’i Mareko, left, and Patrick Feaunati, right, with Stella Teariki outside the Beehive. Photo/PSA/Facebook

The PSA criticises the Government for poorly planned budget cuts in the public sector, particularly in health funding, which the union claims has led to a crisis.

Fitzsimons says the unit highlights the specialised auditors and fraud investigators who save millions annually by ensuring health funds are used correctly.

"The system will just be ripe to be exploited by more fraudsters, and the loser will be all users of the health system from patients to clinicians," she says

"This is just more evidence of how poorly thought through many of the spending cuts we have seen throughout the public sector have been.

"The Government has imposed a health funding crisis in this country and should be doing all it can to make the health dollar go further, including properly funding the health system in the first place."

Unions rally against the government's agenda. Photo/X/Fleur Fitzsimons

Fitzsimons warns that the potential losses from these job cuts, estimated at $360 million due to fraud and error, far exceed the savings from salary reductions.

She argues that the outdated payment systems at Health NZ should not be addressed by eliminating the very team responsible for recovering costs.

"These workers are highly specialised auditors and fraud investigators who save the Government millions of dollars each year - it’s simply penny wise and pound foolish to scrap these roles.

"Each year they carry out audits and fraud investigations of those receiving health funding like medical clinics, midwives, pharmacies and disability support providers to ensure the money is being used correctly for the specified purposes.

"The amount saved in salary cuts pales beside the loss of money not being clawed back with a minimum of 80 providers or fraudulent actors not being held to account each year. These experts are good at what they do, recovering $6 for every $1 invested in the team. One audit recently recovered $6 million from a provider which was overpaid.

Watch Fleur Fitzsimons' interview on Stuff about the Government's cuts below.

"But they face a big challenge. The team estimates that Health NZ is losing at least 3 per cent of the $12 billion of annual provider funding due to civil and criminal fraud and error - a huge loss of $360 million annually.

"Part of the problem is that the payment systems at Health NZ are antiquated, but you don’t fix that by axing the very people who are doing their best to save scarce health dollars."

The PSA is calling for the reversal of these proposed cuts.

Meanwhile, the New Zealand Nurses Organisation Tōpūtanga Tapuhi Kaitiaki o Aotearoa (NZNO) warns that Te Whatu Ora’s ongoing restructuring poses risks to patient safety and causes distress among staff.

In a statement, Paul Goulter, chief executive at NZMO, says the critical events and serious daily issues at Te Whatu Ora services disillusion their members.

Paul Goulter warns that Te Whatu Ora’s ongoing restructuring poses risks to patient safety and causes distress among staff. Photo/Le Va

"Our members don’t have any confidence that the leadership team at HNZ are across these risks. They’re failing in their duty to keep the public safe," he says.

Recent findings from a Te Whatu Ora investigation into a case of mistaken identity, revealed dangers arising from the constant restructuring for ‘budget’ reasons.

One of the findings showed that at the time of this event, the current escalation pathway did not reflect Health NZ’s structure, which had changed due to restructuring.

"In particular, the current escalation pathway included the disestablished role of the National Director Hospital and Specialist Services. It did not include the recently established role of National Chief Mental Health and Addiction."

Goulter says, "This is dangerous to all. Restructuring needs to be halted immediately to allow proper risk evaluations and any consequent changes to be addressed. Patient safety cannot be compromised."