The Hawke’s Bay DHB report

Written By: - Date published: 4:52 pm, March 17th, 2008 - 34 comments
Categories: health - Tags:

storminacup.jpgThe report into the Hawke’s Bay DHB is out and, like everything to do with DHBs, it makes boring reading.

That tireless muck-raker, Tony Ryall, won’t like it but the report reveals no corruption just sloppy work by DHB board member Peter Hausmann and the DHB Board.

Hausmann worked for Healthcare NZ on a tender for providing health services for the DHB before he was appointed to the Board. The Board accepted Healthcare NZ’s tender after he was appointed to the Board. Hausmann did not immediately make his conflict of interest known but neither did he participate in the Board’s discussion of the contract. The Board’s Chairman knew of the conflict of interest but also failed to immediately bring it to the Board’s attention.

Conflicts of interest are a fact of life in DHBs. Nearly everyone capable of competently being a board member is already involved in the healthcare sector and could stand to benefit from a board’s decisions. Where conflicts of interest exist, conduct must be transparent and above question.

The report found there was no impropriety in the Board’s decision to award the contract to Healthcare NZ but circumstances were such that a reasonable person might have thought there was some impropriety. It is on this ground that the Board and Hausmann failed. Not corruption but a bad look due to bad conflict of interest management.

So, this storm in a tea-cup over the technicalities of a DHB contracting process can now be laid to rest but a more important point is raised. Once again, DHB boards have been found to lack competence at a basic level and the smell, if not the fact, of impropriety is again associated with them. We have to ask whether the DHB model really produces good results: to the outsider it seems nothing more than an unweildy sop to democracy and local control that fails because no-one knows who their board members are.

34 comments on “The Hawke’s Bay DHB report ”

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  1. higherstandard 1
    17 March 2008 at 5:10 pm

    Intersting to note that

    The Panel has not reviewed:
    (a) the handling of the Community Services Initiative after the whistleblower
    became involved, and the events after the Wellcare contract was signed.
    The Panel considers that these events in 2006 (after 20 January for the
    Community Services Initiative and 3 March for Wellcare) are not sufficiently
    material, relative to the other matters we have reviewed. This was already
    an extensive and time-consuming review and we considered that review of
    these matters was not justified; or

    (b) management’s conduct and performance, as that is not the focus of this
    review. In particular, the Panel has not conducted a detailed review of
    management’s conduct of the HBDHB’s procurement processes.

  2. ghostwhowalks 2
    17 March 2008 at 5:51 pm

    Well the same sort of things were apparent under National when the DHBs were known as CHE’s( there were other layers of bureacracy under national along with the possibility of cash registers in wards but lets not go there)

    Remmeber the Chairman of the Wellington CHE who was also appointed to head the Waikato CHE. And lo and behold Waikato bought a fancy ( but ultimately useless) computer system, the same as Wellington but against the advice of the Waikato managemnt.
    The whiff of corruption was evident in this deal

  3. Inventory2 3
    17 March 2008 at 6:38 pm

    If that is the case Steve, why was there such a marked difference between the first and second draft reports, and the final one, only after lawyers for Hausmann, Healthcare NZ and Clarke, and Crown Law became involved. I think judgement should be reserved until the draft reports are made public, as they inevitably will be, despite Cunliffe’s best attempts to suppress them. The Minister will then have to explain who the review team got it so wrong before lawyers for interested parties pointed out the errors of their ways!

  4. BeShakey 4
    17 March 2008 at 6:49 pm

    Inventory2 – I’m interested to know – how did you get a copy of the draft report? Or are you just basing your information on that paragon of unbiased health sector reporting Tony Ryall?
    How often are draft reports made available to the public after a final version has been released? I wouldn’t hold out much hope of it ever being released, and don’t bother looking to the Official Information Act, the Ombudsman has already ruled (prior to this whole mess) that draft reports don’t have to be released.

  5. Santi 5
    17 March 2008 at 6:50 pm

    How do you dare even to suggest Annette King has some responsibility here? She’s a Labour minister, hence hollier than thou, whiter than white (well, lets make an exception in the case of Benson-Pope).

    The truth of the matter is her husband is up to his eyeballs in all this, and the findings, so far, show King didn’t demonstrate good judgment at all.

    Lind is far from being proven guilty, but the stench of corruption follows him. Caesar’s wife (husband) …..

  6. ghostwhowalks 6
    17 March 2008 at 6:51 pm

    Link to the Health Waikato CHE computer system $9 million waste

    “…versus the quiet expiration of the $9 million Waikato Health project, where the chief executive resigned when contract was awarded, and the deputy chairman and group manager of audit and finance have resigned after the failure. In May 2000 legal action against the remaining Waikato Health directors was being mooted.”
    http://www.cosc.canterbury.ac.nz/tony.dale/papers/incis.html

    And from NZ Herald

    Four sacked for buying $11m ‘custard’ system
    12:00AM Wednesday May 03, 2000

    By QUENTIN CLARKSON

    HAMILTON – Health Waikato has scrapped its $11.4 million computer and a third of its board has been sacked for buying a system which was never switched on after 16 months of testing.

    Health Minister Annette King yesterday dumped Margaret Evans, David Wickham and Shane Solomon for buying the controversial American computer Shared Medical Systems (SMS).

    At a press conference yesterday afternoon, she added director Carrie Hobson to the hit list after receiving further information.

    She said new board appointments would be made.

    Ms Evans said she had “no idea” why she was fired. All directors had decided last week to dump SMS after it had “turned to custard.”

    She said she had signed the SMS contract in December because she was “closest to the board office.”

    Only Ian Glennie remains as an original director, and he could not be contacted.

    The only other SMS buyer, Wellington’s Capital Health, announced yesterday that it was also ditching some aspects of its $26 million system.

    Purchase of the two systems was the brainchild of Jack Jenkins, former chairman of both Health Waikato and Capital Coast. He was not available for comment.

    http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=135882

  7. ghostwhowalks 7
    17 March 2008 at 6:58 pm

    An inquiry by the Audit Office could only say this

    Slap on the wrist for Capital Coast Health
    12:00AM Saturday October 09, 1999

    By Michael Foreman

    The Audit Office has criticised Wellington-based Capital Coast Health for signing a $26 million computer system contract without the hospital board’s formal approval.

    The health provider’s IT adviser, computer firm EDS, is also singled out for providing a limited list of potential suppliers.

    But the report finds no conflict of interest in former Capital Coast chief executive Dr Leo Mercer’s role in the purchase of the Shared Medical Systems software despite his part-time consultancy work for the company in the United States.

    Dr Mercer joined Capital Coast after the supplier had been selected but was involved in early presentations and in the final stages of negotiating the contract.

    Signed a contract without approval from board.????

    Chief Executive of CCH had worked for supplier.

    All this happened in 1999

  8. Inventory2 8
    17 March 2008 at 7:40 pm

    Sheesh ghost – you even thread-jack on your own side!!!

  9. burt 9
    17 March 2008 at 8:23 pm

    Nothing to see here move on, Peter Hausmann was simply be rewarded for all the hard work he did on the RFP before he (cough cough) tendered for the contract.

    Annette King’s husband being employed by Hausmann is nothing to see – move on.

    The standard has covered all the important points and this report exonerates Hausmann, King & Lind. If anything King was only guilty of trying to help people. Nothing to see – move on.

  10. r0b 10
    17 March 2008 at 10:17 pm

    Nothing to see here move on

    There’s plenty to see here Burt. The Board seems to have been incompetent, and that has worrying implications. Much as I dread the thought of further “restructuring” of Health, I think Steve put his finger right on it in the original post: “Once again, DHB boards have been found to lack competence at a basic level and the smell, if not the fact, of impropriety is again associated with them. We have to ask whether the DHB model really produces good results…”.

    I know you wanted a good juicy scandal to play with Burt, sorry ’bout that, but the issue here is people’s health care, and how we get it right.

  11. burt 11
    17 March 2008 at 11:20 pm

    The issue associated with the poor governance (which this thread is about) is indeed people’s health care. And $50m contracts awarded to people who worked on RFP documents and were appointed by a minister, employed a ministers husband and… did nothing seriously wrong! – it’s the board’s fault… well yes the board did have the problematic govt appointee to deal with, hospital pass from the health minister.

    Yes it was supposed to be about people’s healthcare, how good was Healthcare going to be in that roll? Who knows it was never really tendered properly was it. Other RFP recipients didn’t get to work on the RFP and they complained of a lack of time to respond. So the way I see it, if the board is guilty of stuffing this up, so is Hausmann, so is King and so is Lind for his sordid switch camp act during all of this.

  12. burt 12
    17 March 2008 at 11:34 pm

    Steve Pierson

    The report into the Hawke’s Bay DHB is out and, like everything to do with DHBs, it makes boring reading.

    That tireless muck-raker, Tony Ryall, won’t like it but the report reveals no corruption just sloppy work by DHB board member Peter Hausmann and the DHB Board.

    If this were a National party deed you would be all over it. ghostwhowalks reminds us that it was not acceptable that National whitewashed it in 1999, and as we know National doing it makes it no more valid for Labour it’s unacceptable for Labour to do the same.

    Your support of this, referring to it as boring show how little concern you have for the process as long as your desired outcome is achieved. That you can call this a storm in a tea-cup shows you have zero principals, you will profit well from your association with Labour.

  13. burt 13
    17 March 2008 at 11:37 pm

    Steve Pierson

    hint: storms in tea-cup’s don’t require enduring press gagging orders.

  14. Aj 14
    17 March 2008 at 11:52 pm

    The former board members are putting up so many smokescreens its hard to see the tea cups

  15. r0b 15
    18 March 2008 at 12:05 am

    hint: storms in tea-cup’s don’t require enduring press gagging orders.

    Burt, are you referring to the legal confidentiality requested by the sacked board themselves? That hardly seems like evidence of a government coverup!

  16. Inventory2 16
    18 March 2008 at 7:55 am

    No rOb, I think burt is referring to the gagging order applied for by the DG of Health and Hausmann’s lawyers to prevent the damning first draft ever seeing the light of day. But as Labour is finding out, you can’t suppress free speech, and parliamentary privilege is a very powerful form of light.

  17. James Kearney 17
    18 March 2008 at 8:05 am

    Inv2- the first draft was challenged because it was factually incorrect. As a matter of natural justice Peter Hausmann has a right to challenge that to defend his reputation.

    Now I’m no fan of Hausmann’s- but are you really suggesting a factually incorrect report about him should be published? That seems cruel and unnecessary.

    Tony Ryall’s readings of the leaked draft report in Parliament aren’t a ‘form of light’, all he’s doing is muddying the waters for political gain.

  18. higherstandard 18
    18 March 2008 at 8:31 am

    I repeat !!

    The Panel has not reviewed:
    (a) the handling of the Community Services Initiative after the whistleblower
    became involved, and the events after the Wellcare contract was signed.
    The Panel considers that these events in 2006 (after 20 January for the
    Community Services Initiative and 3 March for Wellcare) are not sufficiently
    material, relative to the other matters we have reviewed. This was already
    an extensive and time-consuming review and we considered that review of
    these matters was not justified; or

    (b) management’s conduct and performance, as that is not the focus of this
    review. In particular, the Panel has not conducted a detailed review of
    management’s conduct of the HBDHB’s procurement processes.

    It is also worth noting that Hausmann would never have been dragged through the mud if AK had taken advice and never put him on the HBDHB or indeed if he’d had the sense to turn down the appointment.

  19. burt 19
    18 March 2008 at 8:48 am

    James Kearney

    Inv2- the first draft was challenged because it was factually incorrect.

    Great, we know this because ??? Let me guess – because he was appointed by a Labour minister against the boards wishes and therefore because Labour=Good Hausmann=Good and the rest of the board=Bad.

    Peter Hausmann has a right to challenge that to defend his reputation.

    Well I agree with you here, but what’s wrong with doing that in court ? Seems to me that if all is above board then there is no reason to suppress “incorrect” (read: damming) information. Surely if it’s incorrect then a new inquiry is required. Perhaps a formal inquiry with terms wide enough to get to the bottom of this.

    Now I’m no fan of Hausmann’s- but are you really suggesting a factually incorrect report about him should be published? That seems cruel and unnecessary.

    Ha ha, instead we produce a heavily doctored report that is factually incorrect about the rest of the board – the ones not appointed by King and the ones that didn’t subvert the tender process on a $50m contract. Yep – you sure understand natural justice from a Labour perspective.

    Shame on you for joining in the spin to protect the people who appear to have put their own self interest ahead of the health care needs of the people that are supposedly serving.

  20. rjs131 20
    18 March 2008 at 8:55 am

    I am sure this will end public disquiet in the Hawkes Bay, and will lead to massive landslide victories for Barker and Fairbrother in the elections…

  21. James Kearney 21
    18 March 2008 at 8:57 am

    I doubt it rjs131. The National-leaning councils and the right-wing media are doing their bit to whip up misinformation and protect the sacked DHB members.

  22. r0b 22
    18 March 2008 at 10:05 am

    Ha ha, instead we produce a heavily doctored report that is factually incorrect about the rest of the board

    That’s quite an accusation Burt. I know that you have a powerful partisan need to see the world in that way, but wanting something badly doesn’t make it true.

    “heavily doctored” – the panel’s head said that after hearing further submissions the review panel felt its initial findings were quite simply wrong.

    “factually incorrect about the rest of the board” – have you a single shred of evidence there Burt? The Board seems to have been so incompetent that the DHB management team were threatening to resign en masse. No wonder they are requesting that many details of the enquiry remain confidential.

  23. Inventory2 23
    18 March 2008 at 10:52 am

    If the review team’s first findings were wrong – who’s to say they’ve got it right this time, after submissions from Hausmann’s legal team – who DO have a conflict of interest!!

    As I’ve said on my own blog (commenting about Armstrong’s article in the Herald:

    “What Armstrong overlooks is that the review team made the only finding it was able to make. And that the review team made excatly the finding that it was INTENDED to make, due to the narrow terms of reference under which it was commissioned.”

  24. Tane 24
    18 March 2008 at 10:54 am

    IV2, with all due respect (and I mean that, I actually think you’re a decent chap) your blog repeats gossip from that munter Whaleoil as if it were fact.

  25. insider 25
    18 March 2008 at 11:11 am

    I found it interesting that Hausmann was willing to pre-emptively put out a media release last week saying he was exonerated yet will not front till later in the week.

  26. Steve Pierson 26
    18 March 2008 at 11:35 am

    insider. both hausmann and some anonymous leaker preempted the report, as did Tony Ryall in the House – big deal. who cares?

    hoenstly, i can’t see what is interesting to anyone about the side issues of what is already a boring issue: how conflicts of interst were managed in some contract process nearly three years ago.

  27. infused 27
    18 March 2008 at 11:48 am

    About as interesting as the whole deal you made about keys wage drop.

  28. burt 28
    18 March 2008 at 7:47 pm

    rOb

    Burt. I know that you have a powerful partisan need to see the world in that way

    Ahh rOb, I’m saying the inquiry seems to be compromised and I suggest a full formal inquiry. Perhaps you could explain what part of wanting full disclosure makes me partisan?

    Unlike you who seems to be quite happy with the current state of partisan play. A bit like the PCA investigations into Louise Nicolas complaints, surely the internal inquiries were sufficient eh….

    Don’t be a fool rOb, nothing is to be gained by sweeping this under the rug – except protection of your precious Labour party… which I guess in your eyes is in the publics best interest.

  29. burt 29
    18 March 2008 at 8:24 pm

    rOb

    From hansard;

    “Hon Tony Ryall: Does the Minister not realise that what the public want to know is not what is in the report but what is not in the report and why, because, just like the Ingram report, this report is yet another Labour diversion from the murky dealings of its own cronies; and is that not the reason why the Auditor-General should provide a full and independent inquiry into this matter?’

    “Hon DAVID CUNLIFFE: The member should be very careful what he wishes for, because I imagine that some of my colleagues will be interested to talk about other things that are not in that report, and that member will look like he is clutching at rather crooked straws.’

    So who is Cunliffe protecting? Clearly from his answer he knows there is some things that are being hidden to protect people other than King, Lind & Hausmann. This is simply not good enough, it’s not OK for a minister to knowingly cover peoples asses when you are talking about millions of dollars of public money.

  30. r0b 30
    18 March 2008 at 10:25 pm

    Perhaps you could explain what part of wanting full disclosure makes me partisan?

    I think it’s the part where you say “ha, instead we produce a heavily doctored report that is factually incorrect about the rest of the board”.

    That’s quite an accusation Burt. Have you a single shred of evidence?

  31. burt 31
    18 March 2008 at 10:46 pm

    rOb

    Perhaps ‘factually incorrect about the rest of the board’ was getting a bit carried away. However I have as much faith in this inquiry as I had in the Ingham inquiry. It’s all about the terms isn’t it, keep them narrow and restricted and you get just the answers you want.

    Hence the need for the AG to get involved. I wouldn’t give a toss if the entire x-board ended up charged with a corrupt practice, fraud or misfeasance in public office. The point is that Cunliffe himself has suggested that there is more to this and peoples asses are being covered. I don’t care who’s they are – expose them.

  32. r0b 32
    18 March 2008 at 10:56 pm

    Perhaps ‘factually incorrect about the rest of the board’ was getting a bit carried away.

    Perhaps it was.

    However I have as much faith in this inquiry as I had in the Ingham inquiry.

    Well, that’s entirely your prerogative Burt.