The appointment of a Crown monitor coincided, somewhat awkwardly, with Sharon Shea’s departure. Photo: Bay of Plenty DHB

Correspondence reveals a tense exchange over a Crown monitor’s appointment. David Williams reports

Ten days before her resignation in December last year, Bay of Plenty district health board chair Sharon Shea received a seemingly innocuous text message.

Ministry of Health deputy chief executive Robyn Shearer, the deputy director general of DHB performance and support, said she wanted to chat about “board chair replacement for bop DHB”.

The conversation was about much more, however, and the timing couldn’t be worse.

Last September, Health Minister Andrew Little announced Shea would co-chair the Māori Health Authority and be a board member of Health NZ – the key bodies in what has been described as the industry’s biggest ever shake-up.

So, as she prepared to leave the board she had led for more than 18 months for prominent, national positions, the Ministry dropped a bombshell – it intended to appoint a Crown monitor to the Bay of Plenty DHB.

“Can we catch up briefly tomorrow morning?” Shea asked Shearer, in a text in the evening of December 6. “I need more details about the ‘Crown Monitor’.”

Crown monitors report directly to the Health Minister, currently Andrew Little, flanked by Associate Minister Peeni Henare. Photo: RNZ/Samuel Rillstone

It had been a tumultuous few years for Bay of Plenty, what with the 2017 Edgecumbe floods, Whakaari/White Island’s deadly eruption in 2019, and, of course, the pandemic – which hit about the same time as Shea was made interim board chair. (She was confirmed in the role last April.)

An in-confidence briefing to Little, written by Ministry of Health’s Shearer and her associate, Jess Smaling, sought the Minister’s approval to appoint Ken Whelan – a former chief executive of Northland and Capital and Coast DHBs – as Crown monitor to Bay of Plenty DHB.

The briefing, accompanied with a draft letter of appointment, was released to Newsroom under the Official Information Act. It is dated December 6.

Bay of Plenty’s issues were numerous – “financial performance, acute demand, workforce retention and management, and some key areas of service delivery, such as colonoscopy services”.

The DHB also needed “strong leadership”, to ensure its Covid-19 preparedness was “robust and ready”.

Since its first deficit in 2017/18, the DHB’s finances had steadily increased in magnitude to a planned $30.8 million deficit in 2021/22, up from $18.2 million. (Critics of health funding say “deficit” is shorthand for underfunding.)

Should things continue on the same track, the DHB would be at risk of breaching its $50 million overdraft limit by February of this year.

The Ministry’s “impression” of the DHB was it was struggling with increasing demand “without a visible plan that will lead to improvement”, its operations weren’t integrated into the wider regional clinical networks, it wasn’t satisfactorily managing colonoscopy waiting lists, had “significant surgical capacity constraints”, and performs poorly in primary and community care in indicators like “amenable mortality and ambulatory sensitive hospitalisations”.

The DHB had been non-compliant with “planned care expectations” for almost three years.

An increasing number of people had been waiting more than four months for their first specialist assessment and treatment. (According to a later email, 1241 people, or 17 percent of patients, were waiting for an assessment – an increase of 509 people since July 2021, while the over-four-month waiting list for treatment was 1010 patients, or 26 percent.)

There was a significant shortage of workers, especially nurses. Early last year, after a request from the DHB’s chief executive, the Ministry’s clinical team visited so DHB staff could get counselling “in recognition that there were high levels of stress and anxiety”, and to help nurses cover rosters.

Whelan’s appointment wasn’t the only step. The ministry also wanted to establish a programme of “intensive support’ to fix clinical issues.

Little agreed to the recommendation on December 12. But soon after the briefing was sent to the Minister, Shearer was briefing outgoing board chair Shea.

“The Minister is yet to appoint ken as Crown monitor …but it should happen in the next week,” Shearer texted on December 7.

Shea responded she was happy to “invite Ken in” without a formal appointment.

“I’m taking this very seriously and it’s welcomed.”

Urgent call for details

Crown monitor appointments are reserved for poorly performing DHBs who, it is deemed by the Ministry, are in need of outside help, sometimes because of a leadership transition.

Think Waikato and Counties Manakau in 2018, Canterbury in 2019, or Southern in 2020. (The Health Ministry and Canterbury DHB have been at loggerheads for years, a situation that deepened two years ago, leading to an unprecedented exodus of executives, including chief executive David Meates.)

Crown monitors observe and advise the board, and have access to all information provided to board members. They also report directly to the Minister on the board’s performance, as well as clinical and service issues.

Shea and Chandler were briefed on December 8. That night, Shea, who uses a private email address, wrote to Whelan: “As per our korero, you can see why this has all come as a bit ‘out of the blue’ for us.”)

In the last Ministry of Health performance review, about six weeks earlier, no serious red flags had been raised, Chandler had said.

(Whelan wanted to discuss this with Shearer. The DHB didn’t see there was a problem, he wrote, “which may not be helped by messaging”.)

The next morning Shea asked the Ministry’s to provide details of its concerns “and supporting data”.

Shearer didn’t share the view the DHB was blindsided. She wrote to Chandler and Shea on Friday morning, December 10.

“We have been made aware, both directly by your DHB and via regular reporting, of a range of challenges facing your DHB for some time, including workforce recruitment and retention issues, and the impacts this is having on areas such as acute demand/emergency department, and specialty areas such as colonoscopy services”.

An “intensive desktop review” of Bay of Plenty’s Covid-19 resurgence plan, found “significant challenges with workforce vacancies and recent staff resignations”, which was of “significant concern”.

Shea responded she was disappointed the DHB was not given more time to manage its challenges without a formal appointment.

In the wake of Shearer’s email, the board held a special meeting to “prioritise action”. On Sunday, December 12 – the day Little approved Whelan’s appointment – Shea wrote to Shearer the board is “very open to working collaboratively”, and invited Health Ministry representatives to visit before Christmas, to “do a deep dive” to see “how we can collectively get there”.

“Right, let’s get cracking,” the email concludes. “Where to from here?”

“We’ll have to agree to disagree.” – Sharon Shea

On Monday, December 13th, just after 9am, Little’s office sent the signed briefing and appointment letter to the Ministry. Shea was sent a copy minutes later.

The decision wasn’t taken lightly, Shearer told her.

“Whilst we accept the willingness of the board and executive team to work proactively there are risks that exist with a change of governance arrangements and urgency with covid 19 health system preparedness.”

At 2pm, Shearer emailed several of her colleagues, including chief medical officer Andrew Connolly, chief nursing officer Lorraine Hetaraka, and chief allied health professions officer Martin Chadwick.

The current board chair and chief executive “are feeling very anxious” about the “surprise” appointment. Shearer said she explained to Shea that in different times the Ministry would have met the board about Whelan’s appointment – “but with the timing and urgency on preparedness this has not been possible.”

“We need to get them to the point of accepting this is a positive thing,” Shearer wrote.

Connolly chips in: “I would ease Sharon’s anxieties by noting the obvious – her leaving means the DHB loses a strong governance person and given the challenges faced, wise to put in a CM.”

That night, just before 7pm, Shea emails Shearer to say “we’ll have to agree to disagree”.

“Our full board is of the view that the Ministry has failed to apply a no-surprises approach to this matter. In our view, the process the Ministry has used to appoint a Crown Monitor was the antithesis of partnership and mutual collaboration. Therefore it was not tika.”

Also, the preferred “mechanism” of Crown monitor wouldn’t have been the DHB’s choice. “We believe we could have rapidly agreed an alternative partnered mechanism that achieved the same result.”

Issues needing urgent attention had been “openly disclosed”. Shea’s role as chair would end at close of business the following day – her replacement would be her deputy, Bev Edlin.

“I think we’ve both had our say on this matter Robyn,” Shea emails. “So, let’s move on and get the mahi done to protect and support the Bay of Plenty whanau and community.”

Three minutes after it was received, Shearer forwarded the email to Director-General of Health, Ashley Bloomfield. “Just keeping you in the loop Ashley,” Shearer wrote.

The next day, Shea emailed a letter to Little requesting the appointment of “an independent advisor or monitor”. The stated preference was for an “independent advisor (such as Mr Ken Whelan)”

The final choice is the Minister’s, the letter says – “We welcome your guidance.”

Of course, Whelan had already been appointed.

In his December 15 thank-you letter to Shea for her work as board chair, Minister Little agreed with her key factors about the “strong support” required”. “Many of the things you have noted are justification for appointing a Crown Monitor to the DHB.”

Little said he appreciated her concerns over the appointment process, and the Ministry acknowledged it could have “occurred in a more collaborative way”.

“Equally, I acknowledge the urgency with which they have acted to ensure a Crown Monitor is in place to support the DHB’s work regarding COVID-19 preparedness prior to the Christmas holiday period.”

The Minister looked forward to working with Shea in her new roles.

What have we learned?

An outgoing DHB chair, who was leaving for national roles, railed hard on behalf of her board against a Crown monitor’s appointment, claiming surprise at the move despite evidence of prolonged poor performance.

In Bay of Plenty’s defence, chief executive Chandler said the Ministry – which acknowledged it could have acted more collaboratively – raised no serious red flags in its performance review six weeks before the appointment was discussed.

Whelan’s role wasn’t publicly announced by the Minister and the Bay of Plenty DHB’s press release, on December 15, noting Shea’s departure and Edlin’s confirmation, didn’t mention it.

That allowed Shea to resign without a thorough public examination of the board’s poor performance.

Asked for comment, Ian Powell, a former executive director of the Association of Salaried Medical Specialists, says the Crown monitor’s appointment was not a good look for the outgoing chair. Trying to avoid such an appointment suggests an attempt to “duck accountability and avoid bad optics”.

Little says via email Crown health monitors have no decision-making role “and their appointment is not usually announced”.

That might be Little’s policy, but as Newsroom pointed out to his office, his predecessor David Clark announced the appointment of Lester Levy as Crown monitor to Canterbury DHB in 2019, and, the previous year, Beehive press statements disclosed Whelan’s appointments to Waikato DHB and Counties Manukau.

Smaling, the Ministry’s associate deputy director-general, says decisions are at the Minister’s discretion, following advice from the Ministry.

Newsroom asked Shea why the Crown monitor appointment should come as a surprise, and whether she believed it was warranted. We also wanted to know if she believed the appointment would be seen as a blemish on her record as chair.

Shea, who consulted the Health Ministry on her written response, said the documents we’ve requested outline “robust discussion” about communication and the appointment process, and the fact the board wanted to “explore options”.

“In September 2021, I advised the Minister of Health that I wanted to resign due to my twin appointments to the Māori Health Authority and Health New Zealand. It was pretty clear that both important appointments would require additional time and focus. The formal process was concluded with the appointment of the new chair, Dr Bev Edlin in December 2021. I wholeheartedly supported Bev’s appointment.”

From her comments, it’s clear Shea is focused on the future.

“Both the MHA and HNZ boards have a lot of valuable work to do and are busy establishing the entities and setting up the transitional arrangements. This solid foundation will support the move from transition to transformation. As you will know, we have a lot of mahi to do and we are progressing this at pace.”

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

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