DHBs haven’t had to report to the Health Ministry about national reserves of PPE since 2016. David Williams reports

On Tuesday, health sector reviewer Heather Simpson made her pitch for a more centralised system, a move away from what she calls a “confusing monolith”. Covid-19 only reinforced that need, she said.

Yesterday, with the release of the Auditor-General’s investigation into the management of personal protective equipment (PPE), the public were given a shining example of why a less tangled system would work better.

The report’s two big themes have been thoroughly reported on already – PPE wasn’t getting to frontline workers at the height of the pandemic, and the official guidance on its availability and use was confusing.

Perhaps the most alarming points raised by Auditor-General John Ryan are about national reserve supplies, some of which are held by the ministry and some by the country’s 20 district health boards (DHBs). (Simpson’s report argues the boards should be cut to between eight and 12 boards within five years.)

It’s basic stuff. To have an effective national reserve it’s necessary to know how much PPE is in it, where it is and what state it’s in, at what point more is needed and where to get it quickly, and the best way of distributing it.

However, the Ministry’s oversight of the reserve had “fallen away over the years”, Ryan’s report says. DHBs haven’t had to report to the Health Ministry about PPE stock levels in the national reserve, including expired and expiring stock, since 2016.

“This meant that, when the ministry started to mobilise its emergency response, it did not know whether or how DHBs were fulfilling their responsibilities to maintain national reserve supplies,” the Auditor-General’s report said.

How much PPE should the reserve contain, ideally? The ministry couldn’t say.

It surveyed DHBs about PPE stock levels in February. It took two months to get a clearer picture – but even then it was opaque, as there was no centralised system for counting it, and DHBs had no consistent way of reporting stock levels. The Ministry’s stock on hand information, therefore, is described as “an estimate”.

Some DHBs kept their national reserves separate, not rotating it into their own operational supply to keep it current, so some stock had expired. A significant amount, it transpired. Because of reporting inconsistencies, however, the ministry couldn’t say exactly how much.

“Fourteen DHBs informed the Ministry that they were holding either expired national reserve mask stock or no national reserve mask stock,” the Auditor-General’s report said.

Problems with N95 masks led to a recall, after which 5000 masks were deemed unfit for use.

The Auditor-General’s report said reconciling stock was “difficult” – made harder by the fact that, because of the pandemic, there are multiple new domestic and international suppliers, and three different distributors.

A key recommendation from the Auditor-General’s report is the ministry implement a centralised system for regular public reporting on the PPE national reserve, with periodic stocktakes. The ministry has said it will also review “optimal stock levels”.

A national reserve was conceived 15 years ago, when DHBs were given $6.3 million to purchase supplies. But extra funding from the ministry stopped in 2013. After that, reserves had to be managed within existing budgets.

How much equipment was needed was based on a 2005 population model, which has not been updated. The national population has increased 19 percent since then, and population densities within DHB areas have changed.

The ministry told the Auditor-General PPE reserves were being kept for hospital use only. That’s despite the national reserve supplies policy saying it “may be appropriate” for non-hospital organisations to get PPE from the reserve, and the Crown Funding Agreement specifying DHBs were also funded to buy PPE for “the primary and community health sectors, and first responders”.

It wasn’t clear if all DHBs understood how far their portion of the national reserve was meant to stretch beyond hospital staff.

On March 31, DHBs were ordered by the ministry to distribute PPE to all publicly funded health and disability providers. Delays in getting PPE to community-based providers were apparent in early April, Ryan’s report said, a situation that was fixed by the end of the month.

However, DHBs gave differing responses to PPE requests. One nationwide disability support service was told by DHBs it wouldn’t get any.

The Auditor-General’s report says: “We consider it important to note that DHBs were being asked to do something during a national crisis that had not been planned for and that they had not done before.”

The ministry responded appropriately by setting up a new centralised system for prioritising, allocating and distributing PPE, the report said. In hindsight, however, it should have had that in place already.

Despite the ministry’s public reassurances it was distributing supplies to DHBs from the national reserve, some got none in the first wave.

Canterbury DHB missed out and was forced to place its own order, based on an estimated need for one million masks a day. If demand matched its original estimates, it would have run out in two weeks.

There was a real risk, Ryan’s report said, that DHBs would compete with each other to get PPE supplies, perhaps even outbidding each other on price. Considering the huge amount of equipment needed, the DHBs might also have encountered cashflow problems. (Surgical masks going last year for between four and eight cents each, rose to 90 cents to $1 on the international market.)

Cabinet set up a $500 million contingency fund on March 16, to cover the immediate costs of the public health response to Covid-19. A month later, $200 million of that fund was earmarked to pay for PPE orders.

Canterbury’s DHB put strict clamps on PPE distribution. Photo: David Williams

Covid-19 provided an extraordinary stress test for the health system, particularly because of the speed of transmission, compared to influenza, and the higher number of people who become seriously ill and require hospital treatment. Demand for PPE increased when it was realised an infected person could be asymptomatic and transmit it.

Basing PPE reserves on influenza was reasonable, the Auditor-General said. But there were multiple failures.

Fundamentally, the ministry didn’t do its job of monitoring and forecasting use of the PPE national reserve, as well as prioritising and allocating supplies when needed.

There was no operational plan, and supply chain risks and vulnerabilities weren’t identified. Indeed, the ministry was left “trying to plan as the pandemic was unfolding”.

DHBs were required to prepare health emergency plans, but the ministry didn’t even check if they’d been published, or were up-to-date.

The pandemic has put the spotlight on the country’s semi-devolved health and disability system, which involves complex and often inconsistent arrangements. Ryan’s report shows what can happen when cuts are made because of a perception DHBs are overly bureaucratic, and report too much, when they should be trusted, with little oversight, to get on with the jobs.

All this lends weight to Heather Simpson’s call for a more centralised health system. She said on Tuesday: “To meet the challenges of the future our population health focus has to be stronger, our preparedness for emergencies greater, and our system has to be much better integrated with clear lines of accountability and decision rights.”

After the PPE debacle, it would be hard to find a midwife, rest home worker or home carer that would disagree.

David Williams is Newsroom's environment editor, South Island correspondent and investigative writer.

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