Recently the Minister of Health re-appointed Lester Levy as Crown Monitor.
Here is an extract from the letter of appointment to Levy:
Dr Michael Gousmett has researched Lester Levy for a group of health professionals. He has written the article below summarising Levy’s previous history with the Health system. And makes a final conclusion.
Before you read Michael Gousmett’ s analysis, I have a few comments.
1. All three Auckland DHBs have returned to significant deficits since Levy led “restructuring”. If he argues that there was now not sufficient funding for these DHB’s then the same case must be made for CDHB.
2. The CDHB dealt with a decade of NZs largest earthquake disasters, the 8th largest mass shooting in the world (outside wars) and the largest capital building program in NZ health. These challenges were often discounted by MOH.
3. Through all this CDHB continued to deliver on all its targets and dealt with the impacts of three years delay in Christchurch Hospital build (MOH managed), outsourcing / outplaying 10 operating theatres per day (Monday to Friday), the impacts on the mental well-being of its community (post-earthquakes – despite MOH arguing that there were no mental health issues for over 5 years), reductions to funding levels despite having the fastest growing population in NZ for many years and at least 5 external reviews that all came to the same conclusion that CDHB was the among most effective and efficient DHB in NZ in spite of all the disasters.
4. I have added information which has become available since Michael produced this report and it appears in red below.
So, with these facts in mind read this report by Michael Gousmett:
The Role of a Crown monitor at the CDHB
Dr Michael Gousmett michaelgousmettphd@gmail.com 1 March 2021
Because of the dire financial predicament facing the Canterbury District Health Board, on 14 June 2019 former Minister of Health Dr David Clark appointed Dr Lester Levy as Crown monitor of the Board, with that appointment being renewed by Minister Little on the 24th of February 2021.[1] At the time of writing, that reappointment has yet to be gazetted.
What then is a Crown monitor, and what role does such an appointee play? The ability for a Minister of Health to appoint a Crown monitor is found in section 30 of the New Zealand Public Health and Disability Act 2000:
[1] Cate Broughton, “Crown Monitor to continue at troubled DHB” The Press, 25 February 2021 at 8.
The key issue is that the appointment is made “for the purpose of assisting in improving the performance of a DHB,” with the functions of the Crown monitor being to observe, assist the Board in understanding Government’s wishes and policies, and to advise the Minister on what he or she is observing.
The Government media release of 14 June 2019 noted that Dr Levy would “bring his considerable experience to the Board table, to strengthen performance and planning, and maintain direct communication with the Government.”[1] The media release also reported that Dr Levy, who had previously chaired Auckland, Counties Manuka and Waitemata DHB’s, was “an experienced director and health executive and [at the time] was chair of Auckland Transport and the Health Research Council.” Dr Levy certainly has impressive credentials, as further described in the media release. His academic qualifications were listed as an MBA and Bachelor of Medicine and Bachelor of Surgery, but no details of his alma mater were provided.
The New Zealand Gazette provides details of his various Government appointments:
- 5/6/2009 – 4/6/2012 Appointed as member and chair, Waitemata DHB.
- 6/12/2010 – 5/12/2013 Appointed as chair and member, Auckland DHB
- 5/6/2012 – 4/6/2015 Reappointed as member and chair, Waitemata DHB
- 6/12/2013 – 4/12/2016 Reappointed as member and chair, Auckland DHB
- 5/6/2015 – 4/6/2018 Reappointed as member and chair, Waitemata DHB
- 1/1/2016 Appointed as member and chair, Health Research Council
- 5/12/2016 – 4/12/2019 Reappointed as member and chair, Auckland DHB
- 5//12/2016 – 4/12/2019 Appointed as member and chair, Counties Manukau DHB
- 18/12/2017 Appointed as member, Ministerial Advisory Group for Health
- Dr Levy resigned from all three DHB’s effective 24 January 2018.
While Dr Levy’s role encompassed more than solely financial deficits, this is a key reason as to why he has been appointed as the CDHB’s Crown monitor. The question then becomes how are the three northern DHB’s performing after his January 2018 resignation? One would expect that Dr Levy would have a left a legacy of well-performing Boards, having contributed to turning their deficits around but, by 2019, all three DHB’s were again in deficit.
What then was Dr Levy’s contribution, if the fundamental reason for his appointments was to turn those DHB’s around, and what does this mean for the CDHB, given that on top of the 2020 deficit of $178 million, [the CDHB deficit includes $178 m deficit plus $65m holidays act increase in provision (Page 49 of annual report). The Holidays Act provision has impacted on every DHB and public sector entity due to interpretations of application of the holidays act going back 11 years.] a forecast deficit for 2021 of $200 million [plus Holiday’s Act provision] has been made? The following summarises the financial performance of the three northern DHB’s before, during and after Dr Levy’s appointments as chair:
[1] Hon Dr David Clark, “Crown Monitor appointed to support Canterbury DHB” Media release (14 June 2019) at www.beehive.govt.nz.
| Financial performance of DHB’s under Dr Levy’s chairmanship | |||
| Surplus/Deficit in $’000 (before comprehensive income) | |||
| Years ended 30 June xxxx | |||
| Terms: | 5/6/09 – 4/6/18 | 6/12/10 – 4/12/19 | 5/12/16 – 4/12/19 |
| Year | Waitemata | Auckland | Counties Manukau |
| Group | Group | Parent & Group | |
| 2008 | 4,639 | ||
| 2009 | -6,997 | 306 | |
| 2010 | -7,924 | 195 | |
| 2011 | 4,305 | 337 | |
| 2012 | 4,820 | 736 | |
| 2013 | 6,835 | -17 | |
| 2014 | 3,534 | 252 | |
| 2015 | 3,018 | 153 | 3,017 |
| 2016 | 2,957 | 2,830 | 2,870 |
| 2017 | 3,292 | 2,980 | -12,940 |
| 2018 | -14,785 | 1,160 | -22,223 |
| 2019 | -126,289 | -232,366 | -152,819 |
| 2020 | N/A | N/A | N/A |
| Dr Levy resigned all appointments effective 24 January 2018 |
Why, after Dr Levy had resigned, were these DHB’s reporting operating deficits?
There appear to have been mixed reactions to Dr Levy’s appointments. On the resignation of Kay McKelvie in June 2009, who stated that “the Ministry of Health has returned to its practice of not giving Waitemata it fair share of taxpayers money,” Dr Levy – a “medical entrepreneur” – was appointed to chair the Waitemata DHB.[1] The Herald also reported that Dr Levy’s appointment marked “his return to public health, after more than 10 years as a private hospital entrepreneur [with Ascot Hospital which merged with Mercy Hospital] and a leadership specialist … [who] turned projected deficits into profits and took out private sector loans – a practice halted by the previous Labour-led Government – to begin a building programme that is still going on.” Health Minister Tony Ryall said, “Dr Levy brings to the Board his capacity to deal with the most complex challenges.”[2]
Health Minister Coleman, in commenting on Dr Levy’s appointment in 2016 across all three Auckland DHB’s, stated that “[Dr] Levy had a strong track record on improving health boards performances and closer working relationships.”[3]
Then, in 2017 in a surprise move, Dr Levy resigned all three DHB appointments.[1] The reason given by Dr Levy in an email to staff was that “he was resigning as he has reached the maximum period of service he could legally serve as chairman,” and would be leaving in January 2018 – his term would have expired in June 2018.[2] He had also been appointed to the Ministerial Advisory Group, formed by Minister of Health Dr David Clark.[3] Waitemata DHB chief executive Dale Bramley said “the DHB owed [Dr] levy a debt of gratitude.”[4] On 15 December 2017 the Waitemata DHB published a “Tribute to Dr Lester Levy” which, while echoing Bramley’s comments went further: “At the same time as a range of new facilities have come on line, the performance of the DHB has improved significantly to the point where it is often a national leader in terms of health outcomes and experience of care, plus health target and financial performance.”[5] On 24 January 2018, a “cross-DHB staff event [was held] in North Shore Hospital”[6] to acknowledge Dr Levy’s contribution.
Perhaps, however, all was not well than ends well. In April 2018, in a report by the New Zealand Herald, it appeared that there might have been disagreement between Levy and Minister Coleman over knowledge about the state of the buildings at Middlemore Hospital.[7] It appears that the sluggish machinery of bureaucracy may have been the culprit, but nevertheless one would have thought that a chair of a DHB, described as being “a powerful person in Auckland, and a controversial one,”[8] would have made sure that the Minister knew of the appalling state of Middlemore’s buildings.
In 2019, then chair of the CDHB, Dr John Wood, considered that Dr Levy’s appointment to the CDHB “will help improve their financial performance in turn helping the DHB to respond to its many challenges. Dr Levy’s passion, drive and will to make things happen have been integral to each of the new facilities that have lifted the volume and quality of healthcare provided to the Waitemata community.”[1] This is explained by CEO Bramley who had said that “[Dr] Levy has overseen significant developments across the [Waitemata] DHB in his almost nine years, including appointing 1,000 staff, opening a 24-hour emergency department at Waitakere Hospital, commissioning an Elective Surgery Centre at North Shore Hospital and expanding the children’s wing at Waitakere.”[2]
Whether the same warmth will be extended to Dr Levy at the end of this latest term at the CDHB remains to be seen. CDHB board member Jo Kane questions what Dr Levy has contributed, while Association of Salaried Medical Specialists executive director Sarah Dalton does not believe that Dr Levy is “a good fit [as] Levy’s adversarial style and views had been at odds with senior clinician’s lived reality.”[1] Former chief medical officer Sue Nightingale, one of the seven of eleven members of the executive management team who resigned virtually en-mass following the shock resignation of CEO David Meates, said that “the board and Levy’s adversarial approach [were] behind her decision to quit.”[1] Minister Little had been advised that Dr Levy was “actively involved in putting together a credible financial repositioning programme,” but passed the poisoned chalice on the “adversarial atmosphere” to new CEO, Peter Bramley.[2]
Meanwhile, Jo Kane continued to voice her opinion that she “did not support [the appointment of Dr Levy] as he had not brought any fresh ideas, or anything new to the table. In fact, since our senior management walked out our position has got worse.”[1] Board member Andy Dickerson considered the appointment to be “completely unnecessary.” [2] Only one board member Aaron Keown appears to be at least publicly in support of Dr Levy’s appointment, as he “valued Levy’s input because he saw things through a different lens.
Finally, the test must surely be, did Dr Levy’s past contributions result in a legacy of improved financial performance by the three northern DHB’s? As their 2020 financial reports will not be available until March 2021, we can only use the 2019 reports as the benchmark.
On that basis, the answer at this time would appear to be no.
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