Te Waihanga recommends big changes in health infrastructure

A new report recommends big changes in the way that public health infrastructure gets managed.

The Health Infrastructure Review, from the New Zealand Infrastructure Commission, Te Waihanga comes in response to the 2020 Health and Disability System Review, which found our public hospital estate has been extensively underfunded over the past 15-20 years.

“Years of under-investment in hospitals and other public health facilities across New Zealand mean that many are no longer fit-for-purpose, making it difficult to introduce the new models of care that Government intends,” said Blake Lepper, GM Infrastructure Delivery at Te Waihanga.

Mr Lepper said that the newly set-up agency, Health New Zealand, will be one of the largest infrastructure agencies in the state sector. The agency is one of the results of Government’s recent health reforms – which have been designed to address the need for national, rather than regional planning for services and resources, including capital. The Te Waihanga review looks at how they’ll need to set themselves up to efficiently deliver on this role with infrastructure.

“This is an unprecedented opportunity to deliver a step change in the way plan and deliver our health infrastructure to ensure we have a cost effective and efficient network of assets. The way the system’s worked to date has led to a focus on short-term operations rather than long-term delivery, and poor asset management.”

Much of New Zealand’s public hospital estate is near or at the end of its design life. And to lift it to a level that’s fit-for-purpose, an unprecedented programme of health infrastructure investment over the next decade is necessary. This was estimated at around $14 billion in 2018, and is likely to be significantly more today.

Over the last year, Te Waihanga has worked alongside Treasury and the Ministry of Health to recommend how Health NZ could improve the way health infrastructure was planned, delivered, and maintained based on learnings from the health infrastructure systems in Victoria and New South Wales – which were restructured in response to similar issues.

Over the past decade, those Australian states have made a significant investment in infrastructure capability, developing centres of expertise in health infrastructure governance and decision-making.

“We need to do that here,” Mr Lepper said. “We need a strong focus on making good infrastructure decisions – so we’re more efficient and effective in the way we build and maintain these critical assets. What we’re learned from Australia is that our Health NZ decision-makers should put much more focus on infrastructure than has happened previously.

“There needs to be better planning and prioritising at a national level – so we invest where the need is greatest. And we need to factor long-term costs such as maintenance and depreciation when we build new. We also need to look at getting better value from what we have – including better maintenance assessment and schedules.”

Mr Lepper said that, as with other areas of infrastructure, Health NZ needs to signal its projects some years out – so that construction businesses can plan ahead and ensure they have the necessary workforce and materials to carry out this work. This is something that is particularly highlighted with our current shortages of construction workers and materials.

While the review looked at health infrastructure, its recommendations could equally be appropriate for other government agencies with extensive portfolios of ageing infrastructure.