Few tears shed at axing of HBL

Under the new health minister, Jonathan Coleman, the government is preparing to axe Health Benefits Limited (HBL), a crown agency set up only four years ago.

Ashok Shankar, the PSA’s national organiser for district health boards, says HBL’s brief was to save around $700 million health dollars over five years from the health budget through sharing and centralising such things as finance and procurement and IT.

“As long as members’ jobs and careers were protected and services weren’t sucked out of the regions, the concept made sense. For example, we saw no merit in 20 DHBs buying the same thing from different suppliers or at different prices depending on volume.”

But while the concept made sense, leaked documents showed widespread discontent with HBL and its relationship with DHBs. Chief finance officers expressed a lack of confidence to the government, and a senior DHB manager likened HBL to a “Ponzi scheme”.

A member who used to work in a DHB finance team said the finance, procurement and supply chain projects was one of the worst processes she’s ever come across.

“We got letters saying our jobs were to be disestablished, then it would get extended and we’d get another letter. This went on for two years. There has been so much uncertainty, stress and fear, and a lot of people have left.

“Yet even I could have told HBL that their finance project wasn’t going to work. But they didn’t consider our opinion was important. Now you hear they’ve spent $100 million on it and it probably won’t go ahead.”

Ashok says the finance, procurement and supply chain was the flagship programme. “Basically, it’s fallen over. The whole thing has been very distressing and harmful for staff who, for two years, didn’t know if they had a job or not. The DHBs have lost very capable staff as a result.”

Procurement is the only part to have been salvaged. It will be taken over by Health Alliance which will be responsible for bulk purchasing of hospital equipment.

Another of HBL’s projects was to require all DHBs to order hospital food from a single supplier. This came under intense criticism, including from dieticians. While the scheme was to offer huge savings, it’s been substantially revised so that DHBs can choose whether or not to opt in.   

Ashok says the government has plans to create a new structure within DHBs that will continue the programme to save health dollars through shared and centralised services.

“We are not yet clear how this will look but it would seem better that DHBs are responsible for achieving these savings rather than having them imposed by an external organisation.”


This article is from the December 2014 issue of the PSA Journal. You can read back issues of the Journal by clicking here.