5 Apr 2016

DHB's 15 year fight for $5m ends in nothing

6:06 am on 5 April 2016

The Southern District Health Board has decided to walk away from a 15-year dispute with a doctors' organisation without a resolution.

Dunedin Hospital.

Photo: RNZ

The dispute with South Link Health, which at its height was referred to the Serious Fraud Office, involved the spending of $5 million of public money across the South Island.

As recently as three weeks ago, Southern DHB's leaders told Parliament's health select committee it was still trying to negotiate to get the money back.

But the health board's chief executive Carole Heatly has told RNZ News she has ended the fight.

"We have explored lots of possibilities of moving forward with South Link Health, and we have decided that those possibilities are exhausted now, and we should draw a line under it.

"The most important thing is how we work together with its colleagues in primary health, and specifically how we work together with South Link Health."

The dispute was about what happened to the $5 million saved under a contract with South Link Health for laboratory services across the South Island, and whether it had permission to invest the money in new projects.

The acrimony peaked in 2014 when Green MP Kevin Hague revealed the DHB had legal advice that there was possible fraud involved, but had not acted on it.

As a result, the case was sent to forensic accountants and then to the Serious Fraud Office (SFO), which decided not to do a full investigation.

South Link Health's lawyer Frazer Barton said his client had not been officially notified by the DHB it was ending the dispute, but it was the right outcome.

All talks ceased about 18 months ago when the matter was sent to the SFO and there had been no official conversations since, he said.

The DHB's decision logically followed the SFO's finding, and it was great to see it over and done with, he said.

The case files have been massive and he was glad to be able to close them.

Even the amount in dispute was disputed.

The original amount paid was $5.3m, and the DHB believed with interest that had grown to about $13m and said it may be more.

Kevin Hague.

Kevin Hague. Photo: GREEN PARTY

Mr Hague, who has repeatedly raised the dispute at Parliament's health select committee, said he was disappointed with the DHB.

"In my view, it is close to a travesty.

"This is a case where money which should have been made available for health services to be administered by district health boards has not been, and in a situation in which the boards are so starved of cash, a bit extra would have gone a long way."

He would reluctantly let the matter go, but said he wanted to be Health Minister one day, and if he ever was he would steer health boards well away from South Link Health.

But Southern DHB's Carole Heatly said its relationship with South Link Health was strong, and she hoped it would grow even more now this dispute was out of the way.

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