The voluntary bonding scheme

February 24th, 2009 at 7:12 am by David Farrar

’s voluntary bonding scheme was made public yesterday, with this fact sheet. Key details for the health sector are:

  • Open to any doctor, nurse or midwive who has graduated since 2005
  • Doctors have to work in a hard to staff area for two years and then commit to a hard to staff speciality (which may move them to a different area)
  • Nurses need to work in a hard to staff speciality while midwives in a hard to staff location.
  • Hard to staff areas for Doctors are Southland, West Coast, Whanganui, Northland, Wairarapa, Lakes DHB, Tairawhiti DHB, Wairau Hospital, Whakatane Hospital and Thames Hospital
  • Hard to staff specialities for doctors are GP, General Surgeon, Internal Medicine, Psychiatry and Pathology and for nurses are Theatre, Intensive Care and Cardiothoracic
  • Doctors will get $15,873 gross or $10,000 net a year. Midwives $3,500 net and Nurses $2,833 net.

The NZ Herald editorial praises the scheme:

The use of voluntary bonding in many countries bears testimony to its effectiveness. It is timely that the Government has introduced a comprehensive scheme here, not just for doctors as it promised before the election, but also for nurses, midwives, teachers and veterinarians. …

During the latest junior doctors’ dispute, bonding was often mentioned as a means of stopping the drift to Australia. The National Party made it part of its election manifesto. Commendably, it has enacted its proposal quickly, adding cash incentives for those who do not need student loan writeoffs. Some may quibble at these extra payments but they are, in reality, compensation for compromised career paths. As such, the Government scheme should go some way to solving the country’s medical and educational staffing woes. Whether it is tailored sufficiently well to have the maximum impact is another matter.

It will be interesting to monitor how many people take it up

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11 Responses to “The voluntary bonding scheme”

  1. Scott (1,724 comments) says:

    Seems a very sensible idea to stop the brain drain overseas and as someone who lives near a ‘hard to staff’ hospital in a small town I think it has to be good news for our community.

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  2. Grizz (244 comments) says:

    Retention of medical graduates is a growing problem over the last 9 years. The last 2 rounds of junior doctor contract negotiations have resulted in strike action and at the centre of them was a large and unaddressed retention problem. Financially doctors have been able to earn far more money working overseas. Compounding this problem is that many simply drop out of the DHB workforce, and re-enter as locums who will on average earn more than twice as much doing the same job. The cost of locums was highlighted during the last doctor’s strike. The RDA submitted a claim to improve salaries for existing staff to help retain them. While costly, it was far less than the existing locum bill. As DHBs and the Labour Government did not have the foresight to notice this, we are still having to fund a large locum bill. Rather than address this snowballing problem, Labour continued to ignore it.

    Voluntary bonding may help improve recruitment and retention in provincial hospitals. However it is only part of the answer. Current DHB management need to improve their general respect for their medical staff. If you work in a hospital, junior doctors are looked upon as some sort of necessary evil. There is a culture of dictating down to them rather than working with them. This is an unhealthy cultural problem that Tony Ryall needs to correct. The three previous stooges in his job did not have the foresight to see this.

    Still of concern though is the large junior doctor shortage in Auckland where this bonding scheme will not apply. These DHBs suffer from high staff turnover which again arises from relatively poor pay management treating existing staff poorly. The DHBs response to staff shortages is to eliminate the positions. They want to replace doctors with Senior Nurses (who are paid more than Junior Doctors on an hourly rate basis) and technicians who as yet have not been trained. Without going into specifics, the end result is that this will do nothing to reduce waiting times in emergency departments and waiting times for elective surgery. In fact it suggests DHBs are quite happy at making the public wait.

    If anything, there is plenty of fat in hospital management. It would be better to cut jobs there first. It is funny that health reforms of the 1990s created a top heavy hospital management. Labour made some cosmetic changes to public health and hospital management, such as reintroducing DHBs, but when you scratch through the surface, nothing really changed. Jobs were retitled. More useless managers were added with no real improvements in health outcomes.

    I guess what I am trying to say is that while bonding may help retain frontline medical staff, it will achieve little without sorting out the fat and incompetence of Hospital Managers.

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  3. KiwiGreg (3,211 comments) says:

    It makes me laugh that the average student debt these folk have on graduation is about the price of the cars they will buy – doctors at $75k, nurses at $22k. Bring in sensible market pricing and user pays on tertiary education and this will soon sort itself out. Sensible employers will them step up and bond those grads they want. I actually got my degree on a 3 year bond to the state.

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  4. expat (4,048 comments) says:

    Grizz say “I guess what I am trying to say is that while bonding may help retain frontline medical staff, it will achieve little without sorting out the fat and incompetence of Hospital Managers.”

    AND THAT IS WHAT I HAVE HEARD IS SPADES.

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  5. kiwiboy (1 comment) says:

    No offence, but what an absolute CROCK! this policy is!

    This is a bloody insult actually, to all nurses registered pre 2005, who do not count according to minister ryall.

    What this says to me (having nursed last 20 years) is your not valued at all!

    [DPF: You misunderstand the policy. It is to get new graduates to work in hard to staff regions or specialities. It is not a pay rise for all nurses]

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  6. bharmer (686 comments) says:

    # KiwiGreg (109) Vote: Add rating 0 Subtract rating 3 Says:
    February 24th, 2009 at 9:28 am

    “Bring in sensible market pricing and user pays on tertiary education and this will soon sort itself out. Sensible employers will them step up and bond those grads they want. I actually got my degree on a 3 year bond to the state.”

    I wonder what you mean by “sensible market pricing”? My guess is you believe that it should be cheaper. Well, in my opinion, if you charge to break even on the basis of actual costs, fees would go up, not down.

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  7. jackp (668 comments) says:

    “I guess what I am trying to say is that while bonding may help retain frontline medical staff, it will achieve little without sorting out the fat and incompetence of Hospital Managers”,
    Grizz, I think the managers feel they are untouchable. I had a customer telling me their friend had cancer and was dying, they took him to the hospital and the Bed Manager had just gone home. The nurses wouldn’t admit him because the bed manager had left. My customer was shocked. Finally a Nurse saved the day with common sense, got the bed and the person was admitted to the hospital. This is just tip of the iceberg when you get too many managers. New Zealand use to have the best medical care awhile ago. The hospitals use to have something like 5 managers. The basic problem with bureaucrats is when they hire a manager, then that manager will be there justifying their job. This is when stupidy and waste of taxpayers money starts to happen.

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  8. grumpyoldhori (2,412 comments) says:

    Does not go far enough, want medical training at taxpayer expense, prepare to be bonded, do not want to be bonded go offshore for training at your expense.
    But fully fund the degrees we need and make it that degrees that are not NEEDED the people taking them pay the full cost.
    Fully fund Medicine, science, engineering etc.

    I suggest charging for law, political science, arts etc.
    I dislike whining eighteen year olds who state they are owed a uni education at taxpayer expense, at eighteen what the hell have they done to be owed ?

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  9. Ratbiter (1,265 comments) says:

    I thought the idea of book-learnin’ folk subjecting themselves to be our property for a couple of years would sit well with the “Property rights” crowd!

    (IMHO, that the idea of the freedom to sell yourself into serfdom does not horrify the libertarians goes to show just what a comfortable little life libertarians (and everyone else in New Zealand) have enjoyed for the last several decades…)

    Perhaps if public hospitals in “hard to staff locations” were **adequately funded** for the job they are supposed to do, they could offer competitive remuneration and thereby attract Doctors, Nurses and Midwives to work for them? Isn’t that, you know, the way The Market works?

    (All hail The Market!)

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  10. Tauhei Notts (1,633 comments) says:

    It would appear that the scheme will not commence until 1st April 2010 when the top tax rate drops to 37%.
    Will the $15,873 for doctors be subject to ACC Earner premium like their wages are? Will the $15,873 be taxable income? What effect will the $15,873 have a prolific breeding doctors who are eligible for Working For Families? Will the $15,873 have any impact on Child Support liabilities? If the $15,873 will be taxable income shouldn’t it be increased to $18867 because 10% of that will go in Student Loan repayments and 37% of it will go in tax leaving the balance of $10,000 to come off the student loan?
    If the doctor has as many affairs as those blokes do at the Shortland Street Clinic the $15,873 will attract $4761.90 in Child Support, $2857.14 in Working For Families abatement, $5873 in tax, leaving just $2380.96 to reduce the Student Loan. Also, it could reduce any Tertiary Study Grant the young doctor’s adopted child might be entitled to.
    Hey, I’m just a provincial town bean counter and I can see the mess this could create. Please encourage those in charge to give this matter some thought.

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  11. wikiriwhis business (3,883 comments) says:

    Does not go far enough according to grumpy.

    “It is to get new graduates to work in hard to staff regions or specialities”

    This is great for nursing students to know and be an incentive for them to study because I know nursing is really hard and students are constantly stressed. I’ve never heard any nursing student say they enjoy there studies and that’s not a good indictment of studying something you want a career in!

    I also hope this initiative is a good message for Kiwi students who know there will be openings for them when they graduate.
    In reality, the academic won’t be the factor. It’ll be the hard physical work the tertiary institutions aren’t interested in preparing students for.

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