Mike Hunter stands across the street from Hayward College, in Dunedin. He says the entire block could be redeveloped as a site for the new hospital. Photo: Stephen Jaquiery

Dunedin Hospital surgeon Mike Hunter has his eye on a possible spot for a new hospital, and it will mean the University of Otago relinquishing two halls of residence.

It’s the block between Frederick and Hanover Sts occupied by the university and the hospital, the other side of the state highway from the main clinical campus.

It includes the Hayward and Cumberland halls of residence, the hospital’s Fraser building, and, "dare I say it", the physiotherapy pool, Mr Hunter says.

It’s speculative, of course, but the land swap idea revealed in the Otago Daily Times today has lent some impetus and practical vision to the rather nebulous project.

The hope is to build Dunedin Hospital into a precinct that draws together the city’s strengths — health and education — with modern hospital planning.

The hospital could be tied to the university campus with landscaping.

An official risk assessment released by the Ministry of Health describes the existing site as "constrained [and] hemmed in", and says a greenfield option might be considered.

It will be tricky, but not impossible, to rebuild right next to the busy working hospital.

Another option is Wakari Hospital, but that would be a blow to Dunedin’s reputation as a health research and training centre.

Mr Hunter cautions against fixating on a particular site or idea, as he wants the process to play out properly to find the best solution for Dunedin and the South.

Mr Hunter, who has had leadership roles in the hospital and played a prominent role in the 2010 neurosurgery campaign, wants to have a say on the new hospital.

So far, that has not been easy.

Doctors had just four days’ notice of the first meeting of an advisory group early last week, making it impossible for many of them to rearrange patient clinics.

The unsettling and unworkable haste, after years of delay and dilapidation, frustrates the hospital veteran, who is an intensive care specialist and general surgeon.

"For something that we have been banging on that we’ve needed for a decade or more.

"We’re told that it won’t be done until the early 2020s, yet suddenly there’s a massive rush to have a meeting.

"I don’t know quite what to make of it yet.

"We’ve said ‘you can’t conduct it like this if you want us to engage’."

In a response to the ODT, the Southern District Health Board cited "ambitious timeframes" for giving doctors only four days’ notice of the meeting.

The project finally jolted into life early this year and involves senior Wellington officials alongside DHB staff and consultants.

Entities including a clinical leadership group and service-level advisory groups have been set up.

Consultants from four firms are at the Dunedin Hospital campus perusing architectural, design, and medical options.

A long-list of options will be presented in December as the next step in the Treasury approval process overseen by the Ministry of Health and an appointed group called the Southern Partnership Group.

While it is drawn out — a new hospital might be commissioned about 2025 — there is urgency to meet deadlines in the complicated approval process.

The SDHB is working with Treasury on a future financial model.

It’s likely to include consideration of millions of dollars in capital charges the board will pay after the build.

In the next three years, it also has to clear a $30million deficit.

A recent rebuild report warned the DHB faces yet more funding difficulties because its population is ageing but not growing much.It’s a lot of space to clear in a balance sheet that has to absorb double-figure percentage increases in demand for older people’s services.

Mr Hunter: "They’re not going to, are they, find that sort of money.

"It’s a pretty grim outlook."

But he is more worried about getting through the next few years in a crumbling building.

"You just wonder ... is it really going to last?" Mr Hunter says of the crisis-prone clinical services building.

"It has been left so late by people who should have known better.

"We are at real clinical risk of total failure of some of these buildings, and certainly ongoing inadequate systems that are determined by facility design.

"No-one can find a space in Dunedin Hospital so we stick to this completely chaotic process."

Site options are short because the SDHB’s predecessor entities sold off land and buildings, including the spot Mr Hunter hopes will be put up for the swap.

It was a blunder selling the former nurses’ and maternity homes, now the residential halls, Mr Hunter says.

"We’ve had the absolute short-termism at its best here."

Several people spoken to for this feature are angered by poor decision-making going back 30 years that they say resulted in a ruinous maintenance schedule and strategic asset sales.

Mr Hunter fears those same financial pressures will affect the new build.

"If you build something that’s too small because you’re concerned about the capital costs, you will inevitably pay for it dearly with staffing costs if patient flow doesn’t work.

"Labour costs over 20 years dwarf the financial costs of the capital."

He says that happened to Southland Hospital, which is straining just 12 years after its rebuild.

Mr Hunter is a pragmatist and says changes are needed to Dunedin medical care.

But he warns against lofty projections of cutting demand through shunting care to the community.

• Thing were more straightforward back in the 1970s when the ward block was built.

Through what was reportedly a gentleman’s agreement, the university chipped in a sizeable capital contribution.

But nothing has changed in respect of the tension between the two big Dunedin institutions, which have always jostled, at times rebuking one another with charges of free-loading.

A rebuild report released in July was seen by some observers as the ministry’s shot across the bow at the medical school and the university on behalf of SDHB.

It took aim at the Dunedin medical establishment and the medical school’s perceived reliance on the hospital to prop up high-end research.

While the Dunedin medical community is divided on the future of medical services, the sense of alarm, indignation, and bruised ego has subsided since that report.

The medical school’s leadership is now engaged in rebuild meetings, and the tone of its public statements has changed from that of early August, when dean Prof Barry Taylor and health sciences pro-vice-chancellor Prof Peter Crampton took the unusual step of speaking publicly in a cautious but determined defence of the medical school.

It helps that one of the top consultants, Dr Tom Love, is known to many.

As well as working for Sapere Research Group, Dr Love is an honorary senior research fellow in Otago University’s primary health care and general practice department in Wellington.

There is excitement at the medical school that the university’s chief operating officer, Stephen Willis, has a background in hospital redevelopment in Australia.

• The vision and voice of local decision-makers can conflict with that of partnership groups, the Government’s controversial new way of running hospital builds.

The ministry, rather than the DHB, is project manager, and works alongside the appointed "partnership" governance group.

In Greymouth, the ministry/partnership group got offside with local doctors when it emerged the size and budget of the new hospital would be less than expected.

In early 2014, hospital staff took the unusual step of penning an open letter to the West Coast to warn the community.

After much delay, construction is under way and the $77.8million facility will be completed in 2018.

In Christchurch, there was tension between Canterbury District Health Board and the ministry/partnership group.

An Office of the Auditor-general audit of the acute services building project says the partnership model had produced "mixed results".

"The roles and responsibilities of the main partners were unclear and not well documented.

"We found confusion about who is accountable for the project," the audit said.

Legally the ministry was in charge, but the partnership group made decisions.

It was unclear what would happen if those two disagreed over something, the report said.

The DHB’s role was not clear, the report said, and staff talked about having "two masters", the ministry and the DHB.

Canterbury District Health Board elected member Jo Kane is blunt in her criticism of the "huge powers" of the "central command and control" model.

"We [the DHB] are not making the decisions, yet we are accountable.

"This is of course what Wellington wants, that control and command model.

"The community should be very worried about these groups," Mrs Kane says.

Canterbury and West Coast DHB chief executive David Meates told the ODT the DHB had a "battle" with the ministry over the Grey Base Hospital rebuild.

"What we’ve got with Grey, we had a battle to get it right back to where it was, but [we have]."

"We’ve had to be really ... it’s made it complex. But we’ve been really clear about what we need, and we’ve stayed true to that, and that’s caused a bit more noise and challenges along the way," Mr Meates says.

Hospital build financing and the 7% charge on Crown capital is a big source of angst in the sector.

Mrs Kane spoke strongly against the "absolutely crazy" system of capital charges, and says the DHB should have been able to borrow at market rates.

The charge depends on a DHB’s net equity, and the Treasury declined to estimate what Southern would pay in capital charges after a build of at least $300 million.

The board has no money of its own to put in, and boards are not allowed to borrow privately.

Clearly, there is a tendency — some would say a need — for provincial DHB leaders and confident executives to stand up to Wellington bureaucracy in these projects.

But Southern DHB has no equivalent of Mrs Kane, because its board was sacked, and it is looking for a chief executive.

In 2014, then board member Richard Thomson urged openness about the strings attached to a rebuild in the form of capital charges.

It seemed "almost impossible" for the financially struggling board to find up to $30 million extra per year.

When contacted recently, Mr Thomson, now a partnership group member, says the charges are "a reality".

"There’s nothing hidden or unusual about it. It’s a reality that it will be a cost that the board will have to face."

The board’s appointed commissioner, Kathy Grant, says the interests of the DHB and the community are "absolutely" represented in the partnership structure.

There were a lot of unknowns, about the budget and the design, but there is a process to work through, she says.

"The assurance that we have been given is that the [financial] model is developed in such a way that it can accommodate a range of options.

"There hasn’t been any clear decision-making about what it is that is being rebuilt, and what the flow through consequence in relation to the ward block might be."

She was confident the financial challenge could be met.

"I have already articulated the thinking that we have shared with our staff that in 2019-2020 the DHB needs to be balancing its books and that is our present direction of travel."

A senior ministry manager, Michael Hundleby, director of critical projects, told the ODT the DHB would have "huge involvement".

Mr Hundleby defends the partnership group model, pointing out that the Christchurch audit was in the context of post-earthquake redevelopment.

"The partnership group has delivered excellent results."

Mr Hundleby said the partnership model had been improved, and "people are very clear" about their respective roles in the southern rebuild.

"As you go through these things there are always things you can learn."

The Southern Partnership Group was being "very transparent", and was making meeting minutes and various reports publicly available.

"A lot of work when we move to the sharp end of this will involve consumers to make sure what is designed ... is going to work for the population down there," Mr Hundleby said.

eileen.goodwin@odt.co.nz