Update from: The Transition Board for the new Otago/Southland PHO

To: Stakeholder groups

Update #: 05

Date: 18 March 2010

Introduction – This update summarises the discussions and decisions from the
Transition Board meeting on 15 and 16 March 2010 in Gore

Overall direction – The immediate focus for Transition Board during the period to
30 June 2010, is to ensure the orderly transition of contracts, staff and leases from
the nine existing PHOs in Otago/Southland to the new PHO. Ideally, this will occur
through an assignment process with each of the existing PHOs. The focus from July
2010 onwards will then be to evaluate the range of clinical programmes transferred
into the new PHO - against the future needs of the communities of Otago /
Southland and against the funding available from the new Southern DHB and other
funders. There is some uncertainty about the future funding levels available to the
new PHO for 2010/2011. This may impact on the number and range of health
service contracts, outside of capitation contracts with general practices, that the
new PHO can undertake in future. From July 2011, the new PHO will also evaluate
the future ongoing staffing needs of the new PHO.

New PHO legal structure and governance – The new PHO will be established as
a Charitable Trust. It will have a Board of nine Trustees nominated by Otago &
Southland Runaka, the community, nurses, medical practitioners and pharmacists.
Under the trust deed, there will be three very important advisory groups that will
provide expert advice to the Trust Board: the Clinical Governance Group, the Treaty
of Waitangi Advisory Group and the Community Advisory Group. We expect the
advisory groups to have a critical role in connecting the new PHO with its
communities and stakeholders

The Transition Board has determined, over time that the New PHO will become a
funder/facilitator of services rather than a service provider.

Office locations – The Transition Board has agreed that from 1 July 2010, three
regional offices will be appropriate for the initial operations of the new PHO:
Dunedin, Invercargill and Alexandra. The base location for coordination of the PHO’s
rural responsibilities, including rural programmes will be Alexandra. Ensuring that
the PHO provides effective services to rural communities will continue to have high
importance.

Transition of contracts – The Transition Board aims to transfer funder contracts

(between the DHBs and PHOs), contracts for health service delivery (between PHOs
and health service providers including general practices), staff employment
agreements and lease agreements through to the new PHO as 1 July 2010. We
believe that the most effective way of ensuring an orderly transfer of these
contracts will be through an assignment process, mutually agreed between the new

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PHO and each of the nine existing PHOs. We aim to execute a assignment deed with
each of the existing PHOs by 30 April 2010. If an individual PHO does not want to
proceed down the assignment route, then the alternative opportunity for
termination of the PHO agreement by their DHB will apply.

Working closely with the DHB – We want the new PHO to work closely with the
new Southern DHB – at clinical, senior management and governance levels, to
advocate for and ensure the best possible health outcomes for communities and
patients across Otago and Southland. As one example of this, I will now attend the
regular meetings of the executive management team of the OSDHBs. When
appointed, the CEO of the new PHO will attend these meetings instead.

Future work plan – We have divided up the task of establishing the new PHO into
two phases: the transition phase from March 2010 to June 2010 and the
development phase from July 2010 to June 2011. The active involvement of the
three advisory groups (Community, Clinical Governance and Treaty of Waitangi) will
be a critical part of the new PHO’s development.

Future meetings - The next meeting of the Transition Board will be in Balclutha
on Friday 16 April 2010. In addition, the stocktake subcommittee and the clinical
services subcommittee will meet before then.

Feedback – we hope that these updates are useful. We will try and let you know
about the work that we are doing, the decisions that we make and the help and
feedback that we need, on a regular basis. We are always interested to hear what
you think – whether it is positive or negative, as long as it is constructive! You are
welcome to contact me at any time (on behalf of the Board) as follows:

• Email – contact@powellconsulting.co.nz

• Office phone 03-4672082 or mobile 027-6228154

Conway Powell
Chair
Transition Board for Otago/Southland PHO
18 March 2010