3 May 2018

Ministry told cash-strapped DHB what to tell ministers

From Checkpoint, 5:06 pm on 3 May 2018

The Health Ministry drafted a letter which the chair of the cash-strapped Canterbury District Health board then sent to the government saying it could work with existing funding.

Information obtained by Checkpoint under the Official Information Act shows that in December 2015, the DHB's then-chairman Murray Cleverley sent a letter to the health and finance ministers, having received an identical draft of the letter from the Ministry of the Health the previous day.

The DHB's chief executive and the Ministry of Health were aware of the letter, but none of the board members knew.

Board members have told Checkpoint they could not believe it when they learnt what had happened and would have never agreed to the letter being sent.

The DHB was under intense financial pressure following the Christchurch earthquakes, and desperately needed more money, they said.

On 10 December, 2015, national health board acting national director Michael Hundleby sent an email to CDHB's chairman at the time, Murray Cleverley.

It included a letter, which Mr Hundleby told Mr Cleverley was the "draft letter below we were going to discuss today".

That letter, released to Checkpoint under the Official Information Act, was for the health minister and finance minister of the time, and said the DHB understood the Crown's expectation to manage its capital spending within existing funds. 

The very next day, Mr Cleverley sent the exact letter (only changing CDHB to Canterbury DHB, and 'yours sincerely' to 'kind regards') on CDHB letterhead to then-Health Minister Jonathan Coleman and then-Finance Minister Bill English.

It stated: "The Canterbury DHB acknowledges the Crown's expectation that the capital redevelopment programme governed by the Hospital Redevelopment Partnership Group; the earthquake programme of works; as well as DHB 'business as usual' capital spending will be managed within existing crown funding; and Canterbury DHB's own resources."

Effectively, he was telling them the DHB did not need more money, despite knowing the DHB was under significant financial pressure, including the costs associated with demolishing 44 buildings.

Ministry confirms letter's authorship

Mr Hundleby, who is now the ministry's director of critical projects, would not be interviewed for this investigation, but Director-General of Health Stephen McKernan provided Checkpoint with a statement.

"As is usual, the finance minister had expectations of the DHB as a prerequisite for approval of the capital investment," he said.

"After discussion with the Canterbury DHB Chair, Ministry of Health officials agreed to draft a letter for the DHB covering those expectations for their consideration.

"The ministry appreciates the pressure experienced by many DHB chairs and is mindful of that in its dealings with them. The ministry often acts as the minister's agent in its communications with the health sector."

Seven-and-a-half hours after Mr Cleverley received Mr Hundleby's email, including the draft letter, he forwarded it to DHB chief executive David Meates.

Mr Meates responded, in an email seen by Checkpoint: "It's unclear what the letter is responding to. Has a letter been received from the Ministry of Health?... The DHB is not in control of decisions."

"It is really difficult for ministers to understand the size of the facility damage we are grappling with," Mr Meates wrote.

"There is approximately a total of an additional $200 million that will be required."

Despite Mr Meates' warnings, and not having discussed the issue with fellow board members, Mr Cleverley sent the letter to the ministers the next day. 

'Meat in the sandwich'

Mr Cleverley told Checkpoint it was irrelevant who wrote the letter, but he had to take "some ownership" for it because he put his name to it.

"Basically, I work pretty closely with the ministry as well, so when you're discussing different things, and I haven't, you'll notice because I haven't confirmed or denied once to anyone who wrote that letter, but I certainly put my signature to it."

He said he had to either take the board with him or come to an understanding with the ministers - both were not possible.

"I still take the right of the chair... If I need to exert my, over-exert my authority or whatever it takes to get a job done," he said.

"We can stand by processes and protocols all we like, but at the end of the day we've got a big job to do and it was important to get it done."

Asked if he felt coerced, he replied: "I think I always felt coerced, no, no I don't think coerced, I think the word was I always felt squeezed. I always felt the meat in the sandwich."

He said believed there would have been consequences if he didn't send the letter.

"The fact is I believe that if I didn't submit that letter we wouldn't have had outpatients here today.

"We were trying to get the outpatient's approval over the line to build the outpatients building at a cost of $70m to $90m. I was trying to get the support from the Minister of Health and the Minister of Finance to get it across the line."

Mr Cleverley said there was nothing "sinister or untoward" in regards to the letter. 

"It was just trying to arrange outcomes that were suitable for Canterbury and basically I had to give assurance to ministers I wasn't going to be back the next day with a request for another $100m even though we knew we were well short on all the work we needed to get done... We were about $250m shy."

He believed Mr Hundleby would have been having similar conversations with board chairs throughout the country. 

'We couldn't believe it' - board members

Board members say Mr Cleverley went behind their backs in sending the letter.

"We just couldn't believe that anybody could do that. We just couldn't believe it," CDHB member Anna Crighton said. "But he did."

"We'd been fighting for more money. We were in exceptional circumstances after the earthquake. Exceptional circumstances. And no way would we have been able to work within our means on the budget that we had, and especially to capital budget."

It was not until February - three months after the letter was sent - that board members found out about it.

CDHB member Jo Kane says she was "pissed off" when she learnt about it.

"You don't get to write a letter on your own," she said.

"The chair is the person who is the conduit for the board's view, and that was not the board's view at the time. It was someone else's view."

Dr Crighton said she made inquiries and found out the letter did not come from the board's secretarial team, which was due process.
"It was a cut and a paste. It was a direction, and that's what our chair wrote, sadly for the CDHB."

Ms Kane and Dr Crighton were the only two board members prepared to go on the record, but Checkpoint has spoken to several others who share their sentiments.

Ms Kane said she believed Mr Cleverley's move was "crude, rude, just lacking in any sort of integrity, lacking in any sort of real professional nous".

"It highlights to me just how difficult it's been for people in health. Winners and losers. It should have never been like that."

DHBs under pressure, scared to speak out

Executive director of the Association of Salaried Medical Specialists Ian Powell said DHBs were supposed to speak out on behalf of the communities they were serving, but that had become increasingly difficult over the last nine years.

DHBs' relationship with the Ministry of Health was poor under former Director General Chai Chua, who left in February, he said.

"I think many district health boards believed they were being cajoled, they were being bullied, they were being harassed, they were being pressured.

"It took a brave person to actually put your hand up and make a bit of noise about that."

When asked last year if the ministry was expected to pass on bad news to DHBs while at the same time protect ministers from repercussions, former Minister of Health Jonathan Coleman told Checkpoint: "I wouldn't see it like that". 

Checkpoint has repeatedly contacted Dr Coleman this week for comment, but he has not responded.