Was the DHB sacking justified?

In January, I slogged through the voluminous affidavits and exhibits generated by the legal action brought against former Health Minister David Cunliffe by the five councils of the region on behalf of the sacked elected members of the HB District Health Board.

As you know, the new Minister, Tony Ryall, has reinstated the “sacked seven,” adding them to a Governance Board chaired by Sir John Anderson, and including his original three fellow commissioners (more on what this actually means in my next post).

Why bother digging through this rapidly aging documentary history?

Two reasons …

First, the reputations of a variety of people who, as evidenced by their recent election, enjoyed the confidence of a majority of Hawke’s Bay voters, were sullied. The lawsuit was intended in part to set the record straight. And, at least to my reading, the documents establish convincingly that Cunliffe’s action was indefensible.

Second, the entire episode raises fundamental questions of proper governance of and accountability for health care at the local level. What exactly is the mandate of elected health boards and to whom are they accountable?

Today’s post deals only with the reputation issue. Then, before the first meeting of the new Governance Board on February 18th, I’ll address the governance and accountability implications.

He said, she said

In his affidavit, David Cunliffe claimed he dismissed the elected Health Board for three reasons:

1. A dysfunctional relationship had developed between the Board and DHB’s senior management, especially its CEO Chris Clarke. This relationship had soured to the point where, he said, it threatened to undermine the delivery of health care to the people of the region.

2. The financial stewardship of the Board was failing. The DHB’s financial condition was worsening and the Board appeared unable to rectify the situation.

3. The Board offended Mr. Cunliffe by being publicly critical of the Government’s handling of health issues, including specific matters affecting the HBDHB, despite his admonitions against public displays of dissent. In effect, he considered the Board guilty of insubordination.

Mind you, Cunliffe reached these conclusions after (subtracting his holiday leave) serving in his health post for a scant seventy days, during which time he never met with any of the elected Board members. Instead, he reviewed written criticisms from an appointed Board member himself under investigation for an alleged conflict of interest, who provided in turn a written critique of the Board provided by CEO Clarke … neither of whose charges were given at the time to the Board for refutation.

Nevertheless, taking these three reasons in order …

1. Dysfunctional relationship

What seems clear from the documents is that CEO Clarke (within a year of being hired in 2003, he says himself) was becoming steadily more uncomfortable with what he regarded as a meddlesome Board – too demanding, too intrusive, too critical. By 2006 he called the situation increasingly tense. By the second half of 2007, really bad.

In September 2007 Clarke retained a senior consultant, John Newland, to advise on the reporting and managerial issues he was facing. At one point, when Newland orally reported critically to Clarke about his operation, the CEO instructed him not to render his observations in a written report. Said Newland in his affidavit: “I was appalled with the performance and style of management at the HBDHB. There was no leadership from the Chief Executive and no control being exercised over the management.”

For its part, the Board was becoming dissatisfied with Clarke’s performance, raising issues in performance reviews, and seeking the counsel of an employment lawyer in August 2007. Additionally, by mid-2007 the issue of an alleged conflict of interest regarding two DHB contracts involving appointed Board member Peter Hausmann was in full bloom. Clarke’s handling of these contracts further eroded Board confidence. As did forensic evidence of communications between the CEO and the health ministry seeking to counter Board decisions.

What emerges from the documents is the picture of a disgruntled CEO, facing a dubious future, deciding that the best defence was a counter-offence … actively undermining the Board.

Cunliffe asserts that, considering the Board/management situation, it was the dysfunctionality that mattered, and since by law he couldn’t have fired the CEO (only the Board can do that), the only option for eliminating the dysfunctionality was to fire the Board! What a disingenuous rationalization!

Standing against the actions and judgment of an experienced (and elected) Board were the actions and judgment of their hired CEO, someone with more experience as a staffer than as a line manager with bottom-line responsibility for a large enterprise. Reading the documentation of both sides, to me it should have been a no-brainer … back the Board.

But in fact, far from his feigned impartiality, Cunliffe had a rather derogatory opinion of the elected Board he had never met, terming them, under protection of Parliamentary privilege: “…. a nasty little nest of self-perpetuating, provincial elites who have been propping each other up, and, either through ignorance or malpractice, slipping each other cosy contracts without proper governance protections and doing it time and time again.”

2. Financial stewardship

Cunliffe would argue there were other factors to consider that dissuaded him from continuing the Board. He states: “While I had no reason to be concerned at the quality of clinical services delivery, it was clear that the deteriorating finances of the Board would impact upon the sustainability of those services in the relatively near future.”

In his affidavits and exhibits, Kevin Atkinson produces a robust counter to this charge, reducing it effectively to rubbish.

I don’t have the space here to detail the full picture, but the highlights include:

• approval of and complimentary comments on the DHB’s financial plans and management as late as July 2007 from Cunliffe’s immediate predecessor as Health Minister (Pete Hodgson);
• four prior years of budget performance within 1% of ministry targets;
• a deliberately conservative approach to revenue accrual and reporting;
• comparative fiscal performance easily on par with other DHBs;
• excellent service outcomes as measured quarterly against annual Statement of Intent benchmarks;
• one of only nine DHBs delivering surgical services at or greater than agreed levels; and so forth.

In fact, at this point, it is not at all clear that financial performance has improved in the period of Commissioner Anderson’s oversight. The forces driving health expenditures turn out to be not so malleable after all. Official HBDHB financials have not been released for the fiscal year ending June 2008!

Morover, having removed the Board, Cunliffe then proceeded to move (i.e., relax) the fiscal goalposts for the new Commissioner’s team – allocating more revenue to HBDHB and authorizing a $6.5 million deficit to be budgeted for the current 2008/09 financial year (he had insisted on the DHB budgeting for zero deficit in the year he was chastising the elected Board).

Perhaps today Cunliffe would agree with Kay McKelvie, who quit yesterday as chair of Waitemata DHB, the nation’s largest, saying: “Health boards are stuck between a rock and hard place. You have the choice of being fiscally responsible and disappointing people, or overspending and giving patients the kind of care they reasonably expect.”

One can only conclude that Cunliffe’s financial critique was an ungrounded smokescreen for a political act. What really bugged him?

3. Insubordination

Clearly, Cunliffe did not like his policies and decisions publicly criticised, especially by “provincial elites” (read: presumed National Party loyalists). He accused the Board — Kevin Atkinson in particular — of conducting PR efforts to discredit his (i.e. Labour’s) health policies, and of conspiring with National’s local MPs.

However, the evidence establishes that Cunliffe, for his part, would release his decisions to the media before his official communications reached the Board, with the result that Atkinson and others were approached on the blind by media for comment. On the other hand, if media attending open Health Board meetings reported comments made in the conduct of business, this was viewed as orchestrated efforts to embarrass the Government.

Sorry, even if the worst of Cunliffe’s complaints were true, elected health boards – in Hawke’s Bay or anywhere else in NZ – do not exist to be muzzled by the Health Minister.

In a way, from a public interest perspective, this is the most offensive of all Cunliffe’s “grievances” against the elected Board, as it strikes at the very purpose of having elected boards in the first place. That purpose is to provide a responsive vehicle for bringing local perspectives and concerns, including an on-the-ground reality check, to bear on the delivery of health services. Muzzle the health boards and you’ve eliminated any local accountability.

So, case closed. Cunliffe loses. As does Clarke. Hands down.

You’re invited to challenge my assessment … it’s just one man’s verdict after all. But I suggest you read the affidavits and legal briefs first! We’ll be posting the key documents on the BayBuzz website shortly.

In another article, I’ll go into the implications of this episode for the future. For most of us, that’s the issue that matters most now.

Tom Belford