The Waitaki District Council announced just before Easter it was entering into talks with Health NZ Te Whatu Ora around the possibility of transferring them ownership of Ōamaru Hospital.

The Waitaki App put some questions to Waitaki Mayor Gary Kircher for a more in-depth explanation around how that might look, and most importantly what it would mean for the people of North Otago.

Q. First of all, can you advise what has prompted the council to finally make the decision to look into transferring hospital ownership back to the Government?

There were several key points: 

• The financial cost of running the hospital with the current worldwide clinical shortages make it more difficult than ever to run the service.
• Following the $3.5m increase in the contract payment to the hospital last year, HNZ is not willing to put additional money into the hospital via its contract. 
• If the council doesn't put more ratepayer money into the hospital before the end of the financial year (June 30th), its directors will not be able to guarantee it as a "going concern".
• Health NZ has indicated that it is open to negotiating for the return of staff and services to the national health system.
• If district health boards (DHBs) were still in existence, I believe there would be less appetite for looking at the future ownership of the hospital. However, because the reforms removed regional DHBs, and Health NZ are treating all hospitals as part of a national system, we have greater assurance that our hospital will play a more highly valued role in that system.

Q. What would the requirements be from Health NZ, for that change of ownership decision to be made?

During initial discussions I have had with Margie Apa and Aroha Metcalfe from HNZ over the past week, they haven't set out HNZ's requirements. There are some issues around employment matters and repayment of Council's loan to the hospital will be a part of negotiations. However, we can't comment on those negotiations at this point, as it involves commercial sensitivity and other legal matters. What I am able to say is that we are committed to keeping the community updated on progress, when we are able to.

Q. What would the benefits be for the Waitaki District?

Potential benefits are:

• Better clinical support from other hospitals
• Improved outpatient services in Ōamaru
• Greater certainty for staff
• Reduced risk of ratepayer funds being required to keep the service running

Q. If Ōamaru Hospital is losing money and struggling to keep staff - what is going to make it an attractive option to Health NZ?

Having the hospital as part of the Health NZ system means some of the staffing issues can be remedied, especially cover for staff absenteeism being provided from other hospitals. There will also be greater consistency of systems and processes with the rest of the health system. Fundamentally, this is the business that HNZ is in. 

The challenges of our hospital are not dissimilar to the challenges they face every day with their own hospitals. After all, not many DHBs and their hospitals were able to be financially sustainable in the past, but successive governments still supported them.

Q. And what measures can be put in place to ensure it won't end up closing the hospital?

We will never have an iron-clad guarantee that a future government won't close the hospital sometime in the future, but I take a lot of reassurance from several facts;

• The new Dunedin Hospital is costing a huge amount of money to build it as large as is currently planned. It is being built with a certain number of beds and particular capacity for other services. That capacity relies on hospitals around the region to be in place, with their own beds and health services to look after people. If our hospital was to close, that would affect the current design of the new hospital - it would need to be built even larger and the cost would balloon even further than it already is.

• The current government has strong political support from rural areas, and they will not want to start closing rural hospitals. No government would want the response they would get from closing any rural hospital, especially where that need is as great as it is in Waitaki.

• The current Minister of Health, Dr Shane Reti, knows our area. He knows our hospital and he knows our community. In very recent times, he has been a locum GP in Kurow and Twizel, as well as other rural areas, so he understands the health needs of rural communities and he understands the needs of Waitaki.

Q. Can you explain how the funding currently works for the hospital, and how much financial input Health NZ already has?

The hospital’s services and operations are funded principally with the contract funding it gets from Health NZ. That is augmented by some ACC funding and some private fees, and the occasional bequest. 

Council has extended loans over recent years to the hospital to ensure it continues to operate and has provided some rent relief in the past for the same reason.

Q. What is the next step from here?

Two things are happening. A working group is being established to help with negotiations and a review is being commissioned to ensure all options for Waitaki's healthcare are looked at and understood.

Q. What input will the public get to have, if any, on the decision?

It is important that we know what our community wants. We have yet to decide on what that involvement looks like until some further steps are taken. There will be some legal obligations to consult that apply if certain routes are taken, such as disposing of a Council Controlled Organisation (which is the ownership model we have for the hospital.

Q. Are there any misunderstandings or misperceptions that you have come across in the public realm that you would like to clear up?

There are some very understandable concerns and fears that people hold for the future of the hospital, should it transition back to Health NZ, as well as more specific concerns about some of its particular services such as the Emergency Department. 

We are expecting further communication from Health NZ in the next few days which should go some way towards allaying at least some of those concerns.