The Ministry of Health had laid down the rules for Health NZ and was supposed to be the guardian of the system,” said PM Christopher Luxon.
“The ministry should not be able to avoid this,” he added.
Prime Minister Christopher Luxon told Mike Hosking that an annual report in October had revealed a significant monthly loss. Hosking inquired why no action had been taken until July. Luxon chuckled and explained that they had only taken over in December.
“Come on, Mike… We assumed office at the end of November, and we have been working to address the issues,” Luxon said.
Hosking pointed out that if he had taken over in October and learned about a $130 million monthly loss, he would have immediately fired the responsible parties. “You’ve had 7 months to fix this place up,” Hosking stated. “You’re moving too slowly.”
Health Minister Shane Reti appointed Professor Lester Levy, the board’s chair, as commissioner for a 12-month term. The board had been left with only one member after two resigned, and the rest declined to serve another term.
Professor Lester Levy, who was the chair of the Health NZ board, has now been named commissioner.
Health NZ was established by the previous Labour government in 2022 by merging the country’s 20 district health boards to create a more cohesive health system, similar to the UK’s National Health Service.
Health Minister Dr Shane Reti expressed serious concerns about oversight and overspending of approximately $130 million per month. He attributed the mismanagement of health reforms to the previous government, resulting in a highly centralized operational model, inadequate oversight of financial and non-financial performance, and fragmented administrative data systems.
As commissioner, Levy will be tasked with strengthening governance and management to achieve financial balance and identify ways to save $1.4 billion.
Luxon proposed restructuring parts of the health system to eliminate bureaucratic layers and potentially save costs. He highlighted that there could be “up to 14 layers of management” between the chief executive and patients in Health NZ.
Labour’s health spokesperson Ayesha Verrall refuted claims of overspending, citing underfunding in the 2024 Budget as the root cause of the issue.