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Can Health NZ fix the under-funding of health services in South Auckland? (Photo: Tina Tiller)
Can Health NZ fix the under-funding of health services in South Auckland? (Photo: Tina Tiller)

PoliticsSeptember 9, 2020

South Auckland’s DHB and the $300m funding hole

Can Health NZ fix the under-funding of health services in South Auckland? (Photo: Tina Tiller)
Can Health NZ fix the under-funding of health services in South Auckland? (Photo: Tina Tiller)

Counties Manukau DHB, home to Middlemore Hospital, may have missed out on $300 million in funding over the last decade, according to documents released to The Spinoff.

This article has been updated to include a response from Statistics New Zealand.

“It’s like a resort, compared to Middlemore.”

This isn’t a review on Trivago. Rather it’s a comparison being made by Fitz, a Māngere resident, who’s been battling kidney disease for 16 years and spent much of his adult life bouncing between Auckland hospital and South Auckland’s main hospital, just up the road from his home.

He goes on.

“If I compare Middlemore to Auckland, the services are totally different. It’s really nice in there. There’s more care [at Auckland]. The beds are more comfortable. The food is different, you get a higher level of food, plus snacks in between meals. When I stayed at Middlemore, I don’t think there were enough nurses or the nurses seemed over-worked. Middlemore doesn’t even have tea bags or milk for patients, you have to ask the nurse to get it for you.”

The quality of food might seem like a minor consideration, but as human rights lawyer and disability advocate Dr Huhana Hickey says, it’s symptomatic of a wider divide between the Counties Manukau District Health Board (CMDHB) and other health boards. Hickey has multiple sclerosis, is wheelchair bound, and regularly accesses CMDHB’s services. 

“It’s just compounding and getting worse. The staff are so busy, they are unable to meet the needs of anybody. The hospital is old, it’s outdated and it’s not fit-for-purpose. I don’t feel safe there. Every time I have an infection or something, I get very nervous, and I just don’t want to go back. It never used to be like that. It’s not the frontline staff. It’s a management and funding issue and it’s around the decisions of our DHB – it’s that that scares me.”

From left: Dr Huhana Hickey and Māngere resident Fitz. (Photo: RNZ/Justin Latif)

And as documents released to The Spinoff under the Official Information Act show, the apparent lack of funding at CMDHB is being driven by undercounting over successive censuses.

In one email, sent on May 21 of this year, Counties Manukau Health’s director of population health Dr Gary Jackson outlines his concerns to DHB chief executive Margie Apa and the chief financial officer Margaret White:

Hi Margie and Margaret

The attached paper shows that the interim estimated resident population (ERP) being used for the 20/21 PBFF [population-based funding formula] undercounts the CM [Counties Manukau] population by 14,100 people. We are a significant outlier, driven particularly by an undercount in the Pacific population. If we roughly said $2,600 per person missed[sic] this amounts to $36.7m missed funding – this is not adjusting for the likely higher weighting for Pacific/deprivation that the missing people would likely attract. This is funding that CM should be receiving – or at least the deficit support expected.

There is no sign yet from Stats NZ of the final adjusted Census 2018 populations. There is not even a proposed date of release. I am deeply concerned that not only is CM going to be short-funded this year, that the short-funding might extend another year. 


In an interview, Jackson explained that over the last 10 years he believes the DHB could have missed out on at least $300 million in funding due to the way the Ministry of Health is undercounting Pasifika peoples. 

“The data going back to 2009 shows this being an issue,” he said. “When the Ministry of Health does its population-based funding formula per head, we’re missing between 10,000 to 15,000 people across that whole decade.” 

Jackson says his DHB knows the population counts are wrong, because health records and enrolment rates consistently show there are more people in South Auckland than is being calculated by Statistics New Zealand. 

“These aren’t imaginary people. These are people that we have NHI numbers for, people we have health records for, so we are treating these people. We know they are there, but they are not being recognised.”

Funding to district health boards is based on Statistics New Zealand’s analysis of census data. However, South Aucklanders are being missed due to a combination of people not participating at census time and also the way Statistics New Zealand estimates household size, said Jackson.

“When they did the matching between all the government databases [including IRD and MSD data], and the census count, they didn’t want to over-count, so therefore they put a limit of no more than eight persons per house. But then you look at our Pasifika population, 25% are living in houses with eight or more people. So just the way the algorithm works, when you’re doing your data matching … it was wrong, particularly for Pasifika living in urban areas.”

A Stats NZ spokesperson has clarified that census counts of the population are not impacted by household size.

“For the 2018 Census, the method that was used to try and determine households of good statistical quality for administrative records used a model that did not perform well for households with more than eight people. This impacts households and families data, but not counts of the population.”

The Ministry of Health uses population projections produced by Stats NZ in its population based funding formula.

In June, the government announced $211.4 million for capital works to increase the outpatient capacity at the Manukau Health Park, including new radiology, breast screening and renal dialysis facilities. Jackson said it’s going to take roughly 250 full-time employees to run those services but currently, the money isn’t there to hire the staff needed to run these facilities at their full capacity.

“The reason we need to build it is because our population is growing and ageing, so we need to supply more services, but in terms of making the operational funding work, you’ve got to get the funding for your population to service that,” he said.

“It’s incredibly frustrating – we’re a DHB which is dealing with the largest number of Pasifika people, the second-largest number of Māori people, the highest number of people living in the most deprived areas, and yet we’re the DHB that’s getting penalised by the population count. We do a reasonable job at being efficient at allocating money, but we’re going to be running a $30 million deficit this year, which is essentially this [missing] money.”

Documents also show that CMDHB has the largest potential undercount of its population of any DHB in the country, whereas every other DHB, other than the Gisborne-based Tairāwhiti, are in fact being overcounted – meaning these DHBs are potentially receiving more funding than correlates to their population size. 

However, a Ministry of Health spokesperson said the primary healthcare organisation (PHO) and health utilisation counts may not accurately reflect the population that is eligible for publicly funded health services through its population-based funding formula (PBFF). 

“The Ministry of Health uses official population estimates from Statistics New Zealand to calculate population shares for the PBFF, rather than enrolment data or other administrative datasets. The two datasets in question, the Estimated Resident Population from Statistics New Zealand and the Health Service Utilisation calculated by Counties Manukau DHB, cannot be compared directly as they have different definitions underlying each of them. PHO enrolment counts are also likely to differ from the estimated resident population as people move between DHBs during the year and may not have updated PHO enrolment details.”

According to reports released to The Spinoff, CMDHB’s population health team says its use of health utilisation rates and PHO enrolment data is a robust way to measure population, as it relies on multiple sources of data to correlate findings. 

From left: Social policy analyst Ronji Tanielu and Auckland councillor Fa’anana Efeso Collins (Photo: RNZ/Auckland Council).

Senior social policy analyst Ronji Tanielu at The Salvation Army has also seen the analysis done by CMDHB’s population health team and believes it confirms what many already believed. 

“The undercount of CMDHB is not surprising given the general problems around Census 2018 and our own encounter with population estimate issues in State of the Nation 2020 [a Salvation Army report], where the provisional and then revised census numbers affected our conclusions.

“The Pacific undercount in CMDHB is pretty shocking, especially given the concentrated population and other risk factors in the Counties Manukau area. Overall, the undercounts point to some pretty big gaps in the associated funding that is meant to come to these communities and probably confirms the long-held suspicions.

Auckland councillor Fa’anana Efeso Collins says South Aucklanders can’t let this issue be ignored. 

“It’s a real concern. I’m not surprised. However, it’s not something that has been highlighted well because perhaps we’re scared of people saying, ‘here goes South Auckland again playing the victim,’ when in fact this is true victimisation. There’s way too much emphasis on shovel-ready projects. But the question has to be what does transformation look like? We’re $300 million behind over 10 years, so we’ve got to be more ambitious and we’ve got to speak up.”

Keep going!