Photo: RNZ / Samuel Rillstone
Health New Zealand will switch to longer-term contracts for mental health support, after the minister intervened over concerns about funding running out.
Labour says the situation this year is the worst it has ever been, and argues the minister should have done something much sooner.
With many providers' contracts and funding ending on 1 July - the turn of the financial year - some were still waiting last week to hear from Health NZ Te Whatu Ora about whether those would continue.
Health New Zealand sent a letter - which RNZ has seen - dated 28 May, confirming contracts would continue unless the provider had already been contacted by the government about them coming to an end.
The agency acknowledged variable communication.
"Contract uplifts for 2025/26 have been agreed and most providers have been advised, noting that many Mental Health agreements are now the responsibility of the regional teams and there may be some local variation to the notification process and timings," its Mentally Well acting director Lisa Gestro said in a statement.
The letter also contained no new contract for providers to sign, and indicated they could include changes to term length and pricing, which would be backdated if the new contract was not provided by the time it came into effect.
"Pricing adjustment changes will be communicated separately ... hope to have variations for those agreements due to expire by the end of June 2025 completed in time with any payments backdated, if necessary. Please continue to provide contracted services until you receive (if applicable) your agreement variation(s)," it said.
"We acknowledge cost pressures facing providers and growing demand on their services. Health NZ is operating in the same financial environment and is working hard to target available funding to where it is most needed."
Gestro said the agency was now "working at pace to finalise contract variations and get these variations out to providers as soon as possible".
Platform Trust advocates for a wide range of mental health providers, and its chief executive Memo Musa told RNZ the letter sent out "doesn't give absolute certainty".
Best practice, he said, was to give three to six months' notice "so that providers can plan how they're going to continue their services into the future".
Prior to the past two years - before the coalition came to power - confirmation would typically come through before May, he said, with renewed contracts and variations posted by the beginning of June.
He said he had also seen an increase of one-year extensions to contracts rather than two-year contracts with a review period, creating "a lot of transaction" both for providers and the government.
Platform Trust had been advising Te Whatu Ora to begin advising providers about contract changes since February, he said, and he would expect significant changes to "ensure that next year, all providers are in a better situation than they are now".
Platform Trust chief executive Memo Musa. Photo: RNZ / Rebekah Parsons-King
Political response to improve timeframes
Questioned about the delays last week, Mental Health Minister Matt Doocey said it was "not good enough" some providers had not yet had confirmation.
He said he would speak to officials at Health NZ about the matter, and when RNZ followed up he said he would put changes in place to avoid the same problem cropping up in future.
"I want to see the end of single-year contracts," he said. "I also want to look at maybe uncoupling the process between the renewals and the time of year - I think there is an ability to do it another point of the financial year.
"The officials have been very clear to me that this is a standard contractual process. There always is a short window when they have to wait for Budget Day to then go on and renew budgets."
He was also looking at improving communications from Health NZ.
"Very much so, and that's why we've moved to regionalisation approach from Health New Zealand. The feedback I got [was] under the last Labour government when the health system was centralised it took too long for communications to come out of Wellington.
"We have returned decision making as close to the front line as possible, and now we have our contracting back at a regional and local level and that will aid better communication."
Health NZ confirmed it was making changes shifting to longer-term contracts, "which will help support better long-term planning for both ourselves and our providers".
Labour's mental health spokesperson Ingrid Leary said the communication problems and delays appeared to be "a direct result of the government's cuts".
"Last year was really bad, and this year is even worse. It's never been this bad, and that's what the providers are telling me," she said.
"For Minister Doocey to now leap into action after hearing about something through the media is unacceptable. He should have been all over this months ago ... I agree that it's not good enough, and it's his government that has created it.
"Leadership starts at the top. The minister needs to be accountable for the uncertainty and the chaos that's been caused. He needs to make sure the ministry and Te Whatu Ora are resourced well enough and that there are enough staff there to be able to get the contracting happening smoothly. Clearly, that's not happening."
Labour's mental health spokesperson Ingrid Leary. Photo: RNZ / Samuel Rillstone
Doocey responded in kind.
"It's another own-goal from Labour's mental health spokesperson Ingrid Leary - something we expect these days. Look, this is a contractual issue that has been happening for a number of years and under the last Labour government, so I think they need to take some ownership of it.
"Officials have advised me that this is a standard contractual process that they go through after any budget. It's been happening for a number of years now. There has always been an ongoing issue with providers who want more clarity and certainty upfront, and so that's what I'm committing to doing."
Leary acknowledged that under Labour there had sometimes been uncertainty "for a matter of months" leading up to the contract renewal, but "the last two years it has come down to the wire, a matter of weeks - that's just unacceptable".
She said with July fast approaching, Doocey would have "a lot to answer for" if providers were still dealing with uncertainty.
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