New Zealand Blood Service Statement of Intent: 1 July 2009 - 30 June 2012

New Zealand Blood Service
Statement of Intent
1 July 2009 – 30 June 2012
NZBS National Office

71 Great South Road
Epsom 1051
Private Bag 92 071
Victoria Street West
AUCKLAND 1142
NZBS STATEMENT OF INTENT 1 JULY 2009 – 30 JUNE 2012
TABLE OF CONTENTS
PART I ........................................................................................................................1
1. INTRODUCTION ...............................................................................................1
2. BUSINESS AND OPERATING ENVIRONMENT..............................................2

2.1 STATEMENT OF PURPOSE AND VALUES ............................................................................................. 2
2.2 STATUTORY OBLIGATIONS AND MINISTER OF HEALTH’S EXPECTATIONS.................................... 2
2.3 KEY RELATIONSHIPS .............................................................................................................................. 3
2.4 GOVERNANCE .......................................................................................................................................... 3
2.5 ORGANISATIONAL STRUCTURE ............................................................................................................ 4
2.6 ORGANISATION OPERATIONS ............................................................................................................... 5
4. SOI PERIOD OPERATING INTENTIONS AND MEASURES.........................10
5. CAPABILITY AND ISSUE MANAGEMENT....................................................16
PART II .....................................................................................................................23
6. FINANCIAL PLAN ..........................................................................................23

6.1 OVERVIEW OF FINANCIAL PLAN.......................................................................................................... 23
6.2 KEY ASSUMPTIONS ............................................................................................................................... 23
6.3 FORECAST FINANCIAL STATEMENTS................................................................................................. 28
7. FORECAST STATEMENT OF SERVICE PERFORMANCE 1 July 2009 to

30 June 2010 ..................................................................................................31
8. REPORTING ...................................................................................................37
8.1 FORMAL REPORTS ................................................................................................................................ 37
8.2 INFORMAL REPORTS............................................................................................................................. 37
8.3 INFORMATION FOR MINISTERS............................................................................................................ 38
1. RESTRICTIONS..............................................................................................38
10. OTHER............................................................................................................39
APPENDIX I – Abridged Statement of Accounting Policies.................................40
GLOSSARY ..............................................................................................................43
NEW ZEALAND BLOOD SERVICE

PART I
1. INTRODUCTION
This Statement of Intent (SOI) has been prepared in accordance with part 4 of the Crown
Entities Act 2004. It sets out how the New Zealand Blood Service (NZBS) will organise
itself and judiciously deploy resources (in line with the 22 December 2008 Enduring
Letter of Expectation from the Minister’s of Health and Finance to ensure value for
money) to support the New Zealand healthcare sector. This SOI informs Parliament and
the New Zealand public about the organisation, the issues it faces and its response to
these, specifying the objectives and performance measures for the period 1 July 2009 to
30 June 2010 and, in general terms, for the subsequent two years.
NZBS is a Crown entity established under the New Zealand Public Health and Disability
Act 2000. Its primary purpose and core activity is the safe, timely, high quality and
efficient provision of blood and blood services to clinicians for the people of New
Zealand. In addition to this, NZBS provides related services including matching of
patients and donors prior to organ/tissue transplantation and the provision of tissue
banking (skin and bone) and stem cell services.
NZBS is a Crown agent for the purposes of the Crown Entities Act 2004. Pursuant to
section 7 of the Crown Entities Act 2004, NZBS is required to give effect to Government
policy when directed by the responsible Minister, the Minister of Health. This SOI has
been prepared taking into account the Minister’s 15 April 2009 Letter of Expectations for
2009/10.
The SOI is structured in two parts. Sections 2 to 5 of Part I of the document discuss the
structure, purpose and objectives of NZBS. Part I, section 3 presents the organisation’s
Strategic Goals which focus activities to support achievement of NZBS’s single
organisational outcome – delivery of a safe blood service for New Zealanders. Part II
(sections 6 to 10) presents the Forecast Financial Statements and Forecast Statement of
Service Performance (SSP) which NZBS will report on in its Annual Report for 2009/10.
Anne Urlwin Prof Kathryn Crosier Fiona Ritsma

Chairman Board Member Chief Executive
25 June 2009
NEW ZEALAND BLOOD SERVICE Page 1

2. BUSINESS AND OPERATING ENVIRONMENT

2.1 Statement of Purpose and Values
Statement of Purpose
The New Zealand Blood Service exists to support the healthcare community through the
provision of safe, appropriate blood and tissue products and related services, in an equitable,
timely and cost-effective manner. This is only possible as a result of the generosity of voluntary
blood donors and the commitment and dedication of our staff.
Values
Safety is our Cornerstone is an overarching umbrella to everything that NZBS does,

cementing the four key Values of:
• Striving for Excellence (Te Eke ki te Panekiretanga)

• Teamwork (Te Mahi Ngātahi)
• Integrity and Respect (Te Pono me te Whakaute)
• Open Communication (Te Whakawhitiwhiti Whakaaro i runga i te Māhorahora)
2.2 Statutory Obligations and Minister of Health’s Expectations

The core functions of NZBS are specified in section 55 of the New Zealand Public Health
and Disability Act 2000 (NZPHD Act) and the Gazette Notices to that legislation.
The key function of NZBS identified in the establishment Gazette Notice is:
To manage the donation, collection, processing, and supply of blood, controlled

human substances, and related or incidental matters, in accordance with its
annual plan and any [Ministerial] directions given under section 65 [of the NZPHD
Act].
NZBS is guided by the requirements contained in the New Zealand Health Strategy.
In particular:
• NZBS provides blood and blood services to healthcare providers, thus

contributing to the good health and well-being of all New Zealanders throughout
their lives.
• NZBS delivers timely and equitable access to blood and blood services to all
New Zealanders regardless of ability to pay.
• NZBS maintains a high level of public confidence.
• NZBS involves consumers through liaison with hospitals and recipient groups.
• NZBS recognises the special relationship between Maori and the Crown under
the Treaty of Waitangi.
• As a national entity NZBS seeks community involvement on key issues through
consultative processes.

NZBS is committed to continued organisation awareness of, and where appropriate taking
actions to contribute to:
• the New Zealand Health Strategy (December 2000).

• the New Zealand Disability Strategy (April 2001).
• recognition of the Government’s requirements in regard to the Treaty of Waitangi.
This SOI reflects the expectations of its owner, the Crown, as documented in the
Minister of Health’s Letter of Expectations for 2009/10. NZBS will work with the Ministry
of Health (MOH) to ensure that each expectation is appropriately progressed.
2.3 Key Relationships

NZBS has relationships with a number of different stakeholder groups (other than the
Minister of Health). Key relationships exist between NZBS and:
• Donors
• DHBs and their patients
• Private hospitals
• Other users of blood products and services
• Ministry of Health
• Patient advocate groups (e.g. Haemophilia Foundation of NZ and Immune
Deficiencies Foundation of NZ)
• National Haemophilia Management Group (NHMG)
• NZBS employees
The expectations of these stakeholders are assessed by a variety of means including

regular contact (through routine service delivery and associated activities), focus group
meetings, surveys and documented requests and requirements.
NZBS can be considered the custodian of more than 125,000 voluntary New Zealand
blood donors’ “gift of life”. We take this responsibility and the relationship with our
donors very seriously; therefore in achieving our organisational goals and objectives, we
are mindful of the requirement to protect this taonga through both NZBS internal
activities and providing support to the prescribers of blood and blood products to ensure
appropriate and cost-effective utilisation.
2.4 Governance
NZBS is governed by a Board appointed by the Minister of Health. NZBS forecasts and
reports on performance to the Responsible Minister through the Sector Accountability
and Funding Directorate of the MOH.
The NZBS Board performs the roles and responsibilities of a Crown Entity board as
defined in the Crown Entities Act 2004.

2.5 Organisational Structure

Board and Executive Management
NZBS BOARD
Anne Urlwin (Chair)
Kathryn Crosier
Susan Johnstone
Tania Kingi
David Wright
CHIEF EXECUTIVE
Fiona Ritsma
JOHN DR PETER DON SUE OLIVE RAY

HARRISON FLANAGAN MIKKELSEN JENSEN UTIERA SCOTT
Chief National National National National National
Financial Medical Manager Manager Manager Donor Manager
Officer Director Operations Human Services Technical
Resources Services
MEREDITH
SMITH
National Manager
Quality &
Regulatory
Systems
Management Team
Reporting to the NZBS Executive Team are key national specialist roles, each covering a
core functional area within the NZBS sphere of activities, along with the senior clinical
and operational roles. The key national specialist roles include: National Manager
Logistics; National Manager Marketing; National Manager Information Services;
Regional Area Managers; and Transfusion Medicine Specialists.
NZBS Staff
Eighty eight percent of NZBS staff can be classified as “front-line” (i.e. staff whose role is
directly related to the provision of NZBS products and services including maintenance of
GMP compliance.) Front-line excludes Executive, National and Area Managers and staff
employed in functions such as: Finance; Human Resources; Payroll; Information
Services and Marketing. The chart on the following page shows the composition of
NZBS staff by operational area.

NZBS Staff by Operational Area
Blood Bank
Donor Services
13% 3% 17%
Laboratory
16% Logistics
3% Manufacturing
5% 43%
National
Clinical
Note: “National” refers to national roles e.g. National Management, Finance,

Information Services, Human Resources and Payroll staff, Operational
Support Officers and Training and Development Co-ordinators. This
centralised national structure is the most efficient management model and
facilitates effective control and co-ordination of the national blood service.
2.6 Organisation Operations

New Zealand Blood Service Sites and Functions
Collection, Accreditation, Processing and Blood Bank

Auckland
Tauranga Collection and Blood Bank
Hamilton
Collection, Processing and Blood Bank

Napier
Palmerston
North Collection only
Nelson Wellington
Note: Mobile collections are made in most major cities
Christchurch and towns across the country.
Dunedin
Nelso
Marlboro
NZBS was established in 1998 to integrate the former hospital based blood services into
a single national organisation. NZBS maintains four major collection hubs (Auckland,
Hamilton, Wellington and Christchurch) supported by two collection co-ordinating centres
(Palmerston North and Dunedin) and regional static collection sites in Tauranga, Napier
and Nelson. Regular mobile collections are also made in a number of towns and regions
across New Zealand. Donor Services staff are responsible for recruiting donors and
carrying out all blood collection activities.
Technical Services staff are responsible for the testing and manufacture of blood and
blood products including donation accreditation testing which is carried out at two sites
(Auckland and Christchurch). These sites are set up to support each other in the event
of equipment failure or other interruption of service including civil defence or other
emergencies. Blood donation processing occurs at the accreditation testing sites and
also at centres in Hamilton and Wellington. NZBS directly manages the hospital Blood
Banks for six major (tertiary) DHBs.

A comprehensive range of diagnostic testing and support services is also provided to

DHBs and other health sector customers across New Zealand. NZBS operates the only
tissue typing service in New Zealand from the centralised national laboratory in
Auckland. This laboratory provides key testing and assessment services to DHBs
undertaking organ and haematopoietic stem cell transplantation. New Zealand’s only
Skin Bank is sited at the Auckland national laboratory and NZBS Bone Banks are
located in Auckland, Hamilton, Palmerston North, Wellington, Christchurch and Dunedin.
Operationally, blood is collected either as whole blood (which is then separated into its
component parts) or as individual components (plasma or platelets) via a process called
apheresis. The diagram below outlines the process for providing fresh and fractionated
blood products to the DHBs.
Flow of Blood Products to DHBs
Apheresis Donation Whole Blood Donation
Leucodepletion
Whole Blood
Plasma Platelets Red Blood Cells
DHBs
CSL Melbourne Fractionated Products
Clinical Service
The NZBS Clinical Team have a key role in ensuring that the right product is provided to
the right patient at the right time. The clinical role within NZBS impacts on all areas in
the “vein to vein” blood service1 from selection of donors to provision of advice and
support for management of patients with complex clinical problems. A comprehensive
twenty four hour national clinical advisory service is available to all hospitals.
A clinical oversight programme2 enables NZBS to discharge its statutory responsibility

for maintenance of effective blood banking and cross-matching systems in the DHB
Blood Banks not operated by NZBS. The programme has been endorsed by
International Accreditation New Zealand (IANZ) and is complementary to IANZ
accreditation of the DHB’s Blood Bank(s). Active participation in the NZBS Clinical
Oversight Programme enables the DHB managed Blood Banks to maintain IANZ
Accreditation.
1
see definition in Glossary
2
see also: 24 pg 12
A national haemovigilance programme3 examines and reports annually on the frequency

and causes of adverse events, to help health professionals understand the risks
associated with blood transfusions and assist development of improved systems for
delivery of blood products to patients.
Quality, Safety and Compliance – “Safety is our Cornerstone”
The NZBS Quality Systems function provides a service to all areas of the organisation,
particularly with respect to regulatory compliance, and supports the DHB sector via the
Clinical Oversight Programme (see above). Quality Systems-related strategic objectives
are primarily determined by regulatory requirements and the needs of NZBS customers.
The key external stakeholders with whom the Quality Systems function currently
interacts are: Medsafe (the regulatory arm of the MOH); International Accreditation New
Zealand (IANZ); American Society for Histocompatibility and Immunogenetics (ASHI);
the Australian Therapeutic Goods Administration (TGA); and DHB Blood Banks.
3
see also: 23 pg 12, 50 pg 35
3. OUTCOMES AND STRATEGIC GOALS

NZBS activities contribute to achievement of the government’s goal that all New
Zealanders lead longer, healthier and more independent lives. This will be attained
through achieving the supporting goals of:
(a) [a] health system [that] is adaptive, innovative and continually improving; and
(b) service delivery that is better, sooner and more convenient.
As an essential service provider to the DHBs, who are directly responsible for improving
health outcomes for the populations they serve, NZBS also contributes to the Ministry of
Health’s priority outcomes as defined in their 2009-12 Statement of Intent.
NZBS operations align or make direct contributions to three of the seven priority
outcomes identified by the Ministry of Health (note that outcome numbering and order
used below is for reference purposes in this document only):
1. Every dollar is spent in the best way to improve health outcomes

2. Leadership and planning are clear, effective and co-ordinated
3. Workforce supply meets service demand
NZBS also contributes through its Strategic Goal 1 (supply of products and services to
the DHBs) to the remaining Ministry of Health priority outcomes:
4. Faster access to high quality hospital services

5. Systems and services are more patient-centred
6. Whānau Ora: Māori families are supported to achieve their maximum health and
wellbeing
7. More services delivered locally in the community and in primary care
NZBS’ overall contribution to the government’s goals and Ministry of Health’s priority
outcomes is accomplished through achievement of its own enduring outcome:
New Zealand Blood Service Outcome
The healthcare community is supported by the New Zealand Blood Service’s provision of
safe, appropriate blood and tissue products and related services in an equitable, timely,
and cost-effective manner.
Achievement of this outcome through delivery of products and services to external

customers is critically dependent upon NZBS’ internal capability. For this reason the
NZBS Strategic Goals (presented on the following pages) are separated into two
categories based on whether their primary outputs are externally or internally focused.
Strategic Goals which generate outputs primarily to external parties are “Externally
Focused Strategic Goals”. These goals relate to: provision of NZBS products and
services4; NZBS’ relationship with DHBs as a service provider5 (assisting the sector to
improve population and individual health outcomes); and maintenance of a donor
population capable of providing the raw material to support manufacture of blood
products needed in New Zealand6. Specific measures for achievement of these
Externally Focused Strategic Goals over the period of this SOI are included in section 7,
the Forecast Statement of Service Performance (SSP).
4
see also: 8 pg 9, 15 & 18 pg 10, 19 pg 11, 39 pg 20, 46 pg 31
5
see also: 10 pg 9, 26 pg 13, 33 pg 16, 51 pg 36
6
Strategic Goals which serve primarily to enhance internal capability are “Internally
Focused Strategic Goals”. Achievement of these goals will maintain or build capacity
and capability within NZBS to enable the organisation to deliver key deliverables
(products and services) to the DHBs as efficiently and cost-effectively as possible.
Overarching success measures for these goals are outlined in section 4 of this
document, in the Operating Intentions7.
EXTERNALLY FOCUSED STRATEGIC GOALS
GOAL 1: NZBS provides its products and services effectively, efficiently and safely
within available resources8
GOAL 2: NZBS maintains a donor population capable of supporting ongoing blood

product demand in New Zealand9
GOAL 3: NZBS - DHB relationships are mutually supportive and productive10
Note: Refer to the SSP for specific 2009/10 and medium term measures in respect of
these goals.
INTERNALLY FOCUSED STRATEGIC GOALS
GOAL 4: Effective systems ensure maintenance of NZBS regulatory compliance11
GOAL 5: NZBS maintains an appropriate business model that is cost-effective and

meets the ongoing blood service needs of New Zealand12
GOAL 6: NZBS systems are aligned with international “best practice” in respect of
safety, IT and product development initiatives (as appropriate for New
Zealand)13
GOAL 7: NZBS has a sustainable, competent and engaged workforce14
Note: With the exception of Goal 4: maintenance of regulatory compliance

(i.e. maintenance of accreditation and licences which are essential to
achievement of external product and service outputs) medium term measures
related to achievement of these internally focused strategic goals are presented
on the following pages comprising section 4 - Operational Intentions and
Measures for SOI Period – rather than in the SSP.
7
see page 10
8
Relates to government goals (a) & (b) and MOH priority outcomes 1, 4, 5, 6 & 7 on page 8 - see also: 4 pg 8,
15 & 18
pg 10, 19 pg 11, 39 pg 20, 46 pg 31
9
Relates to government goal (b) on page 8 - see also: 6 pg 8, 21 pg 11, 34 pg 16, 48 pg 35
10
Relates to MOH priority outcomes 1& 2 on page 8 - see also: 5 pg 8, 26 pg 13, 33 pg 16, 51 pg 36
11
see also: 27 pg 13, 42 pg 21
12
Relates to MOH priority outcomes 1& 2 on page 8 - see also: 44 pg 22
13
Relates to government goals (a) & (b) on page 8 - see also: 30 pg 14, 36 pg 17
14
Relates to MOH priority outcome 3 on page 8 - see also: 31 pg 15, 40 pg 20, 41 pg 21
4. OPERATING INTENTIONS AND MEASURES FOR

SOI PERIOD
The following section presents how NZBS intends to perform its functions and conduct
its operations in order to achieve the Strategic Goals presented in section 3.
EXTERNALLY FOCUSED STRATEGIC GOALS

(2009/10 and medium term performance measures presented in section 7 – the SSP.)
GOAL 1. NZBS provides its products and services effectively, efficiently and
safely within available resources15.
All NZBS activities are focused on ensuring certainty of supply of safe blood and
tissue products and services to the healthcare community at all times. This will
always be the enduring and primary goal for the organisation. NZBS aims to
achieve 100% of demand for its products and services on a 24 hour per day,
7 day per week basis, every year.
An NZBS and DHB supply chain; including the nation-wide electronic Blood
Management System (Progesa), capable of supporting delivery of blood, blood
products and components to where they are needed, when they are needed, is
vital to NZBS achieving its desired outcome and will be carefully maintained.
During the period of this SOI, the blood management system Progesa will be
upgraded to the web-based e-Progesa16. This will ensure ongoing vendor
support for this critical software package (used to manage the supply chain of
product from the donor, through production and warehousing to transfusion to a
patient) and provide system resilience to meet future needs.
NZBS has been successful in maintaining financial sustainability during a period

of significant change in product mix and volumes17. The organisation has a
strong culture of cost containment (e.g. leveraging savings through consumable
procurement contracts; reviewing and where possible altering processes to
deliver cost savings etc). The gift status of every voluntary donation is respected
with minimisation of product expiry and maximisation of utilisation for each
donation a high priority. Experience and expertise in planning and management
of operations will continue to be critical to ongoing achievement of this Strategic
Goal by NZBS, especially in the current global economic environment.
Careful management of collection strategies (including the capability and location

of collection and manufacturing sites)18, ongoing efficiency gains in stock
management and other operational areas along with increased revenue
associated with greater prescribing of key products and services have all
contributed to positive financial performance.
Elements of unpredictability are ever present in the operation of blood services

which need to respond to external prescribers demand. NZBS has mitigations in
place to manage its known risks. In the event of an adverse business impact
outside of NZBS’ control it would look to draw on the positive working
relationships it has with key stakeholders such as the MOH and DHBs to ensure
financial and operational sustainability is maintained.
15
Relates to government goals (a) & (b) and MOH priority outcomes 1, 4, 5, 6 & 7 on page 8 - see also: 4 pg 8, 8 pg 9,
18
pg 10, 19 pg 11, 39 pg 20, 46 pg 31
16
see also: 22 pg 12, 43 pg 22, 49 pg 35
17
see also: 25 pg 13, 38 pg 18
18
see also: 8 pg 9, 15 pg 10, 19 pg 11, 39 pg 20, 46 pg 31
Achievement of this strategic goal will be measured by meeting fresh,

fractionated and other product and service output targets (which may need to be
flexed up or down in response to demand patterns throughout the year) as
reported in section 7 of this document, the SSP19. Achievement will also be
measured by meeting budget each year20 whilst continuing to implement required
internal initiatives to ensure safety and surety of supply.
GOAL 2. NZBS maintains a donor population capable of supporting ongoing

blood product demand in New Zealand21.
After several years of declining donor numbers, NZBS will maintain its number of
active donors (people who have donated more than once in the last 24 months)
at the 2008/09 level of 130,000, growing to 132,000 by 2011/12. Based on
current forecast demand these donor numbers are expected to be capable of
supporting continued delivery of self-sufficiency (where NZBS collections and
manufacturing activities effectively meet blood product demand within New
Zealand).
NZBS will continue to develop donor recruitment and retention strategies
(including maximising use of the electronic Donor Relationship Management
system and a number of targeted initiatives to improve engagement with Maori,
Pacific and other ethnic groups) in order to maintain sufficient voluntary donors
to replace retiring or deferred donors. This will help to ensure the donor
population better reflects New Zealand’s changing ethnicity mix and will assist
NZBS to meet changing demand for products.
The graph below shows the sustained, gradual trend of an aging donor
population in New Zealand. This is most clearly seen by the reducing numbers of
donors below 20 years of age and the increasing numbers of donors in the 20-39
and 60+ age groups.
Donors by Year and Age Group for 2005- 2008
40.00%
35.00%
30.00%
25.00%
Percentage of 2005
20.00%
Total Donors 2006
15.00%
10.00% 2007
5.00% 2008
0.00%
<20 20-39 40-59 60+
Donor Age
During the period of this SOI NZBS will continue to enhance its focus on youth
donor recruitment to address the ageing donor population and ensure sustainable
donor support into the future.
Achievement of this strategic goal over the SOI period will be measured by
achieving annual donor population target numbers and will also be demonstrated
by meeting targeted whole blood and apheresis collection volumes which would
be impossible without having sufficient active donors to meet supply
requirements. Specific measures will be reported in section 7 of this document,
the SSP.
19
see also: 4 pg 8, 8 pg 9, 15 & 18 pg 10, 39 pg 20, 46 pg 31
20
see also: 45 pg 31
21
Relates to government goal (b) on page 8 - see also: 6 pg 8, 9 pg 9, 34 & 35 pg 16, 48 pg 35
GOAL 3. NZBS - DHB relationships are mutually supportive and productive
Activities related to NZBS’ achievement of this strategic goal also contribute

directly to supporting the Ministry of Health outcomes of “every dollar [being]
spent in the best way to improve health outcomes” and “leadership and planning
[being] clear, effective and co-ordinated”.
NZBS Product Utilisation Reporting for DHBs22

Using information from the electronic blood management system Progesa, NZBS
provides DHB clinicians and management with monthly clinical product utilisation
data to assist the DHBs to maximise utilisation of product and minimise expiry.
This is supplemented with two to three clinical audit reports each year based on
work carried out by the NZBS clinical team (Transfusion Nurse and Medical
Specialists) working in partnership with DHB clinical staff.
Performance in this area will be measured by the timely distribution of product

utilisation reports to DHBs. NZBS will consult with DHBs on their ongoing
requirements, and these reports may be modified if required to assist the process
of actively managing product use and ensuring that patients receive the
appropriate product and dose at the right time.
Management of DHB Blood Bank Stock Levels
NZBS will continue to work closely with DHBs to ensure that blood product stock
levels (and hence DHB expenditure) are appropriate to most efficiently support
anticipated clinical demand and minimise product expiry. Regular reports will be
provided to DHBs to facilitate this.
Haemovigilance Reporting23
An annual national haemovigilance report is published each year to inform
stakeholders. This report, monitoring and reporting adverse events and
reactions, can help to improve the overall safety of transfusion and assess the
impact of any changes in practice as they are implemented.
Performance in this area will be measured by the timely production of the annual
haemovigilance report which will be used by both NZBS and the DHBs to monitor
and minimise adverse transfusion events – tracking trend changes and together
ensuring appropriate, clinically safe and efficacious product utilisation.
Clinical Oversight of DHB Blood Banks24
NZBS will continue to work closely with DHB managed Blood Banks and Hospital
Transfusion Committees to provide guidance and clinical oversight, ensuring that
appropriate quality systems and processes are used in the provision of blood
components and products to patients.
NZBS clinical oversight of DHB Blood Banks is an IANZ accreditation

requirement. The measure of performance in this area is a minimum of one
clinical visit to each participating DHB each year, including timely production of a
report outlining any corrective actions and/or recommendations for improvement
required. This will assist the DHBs to maintain IANZ accreditation of their
respective Blood Banks.
22
see also: 16 pg 10, 43 pg 22, 49 pg 35
23
see also: 3 pg 7, 50 pg 35
24
see also: 2 pg 6
Management of transition from Biostate to Recombinant Factor VIII25

Through representation on the NHMG NZBS will support the sector in the second
of three years of managed transition from plasma-derived Biostate to
recombinant product for the treatment of haemophilia.
Performance in this area will be measured by evidence of effective engagement

with the NHMG on the transition of people with haemophilia to recombinant
product; thus ensuring achievement of the budgeted levels of Biostate utilisation
in the 2009/10 and 2010/11 years.
Planning and Communication26
NZBS will continue to communicate with DHBs via DHBNZ and the Lead DHB
CEO. This will include an annual price engagement process in time for DHBs to
budget for price changes in their District Annual Plans, identification and
implementation of reporting improvements and any other mutually beneficial
activities/projects to improve product utilisation and/or deliver financial savings to
the sector.
Key activities in respect of achieving this strategic goal will be reported in section
7 of this document, the SSP, in respect of:
• NZBS Product Utilisation Reporting for DHBs
• Haemovigilance Reporting
• Planning and Communication
INTERNALLY FOCUSED STRATEGIC GOALS

(Medium term performance measures are presented in the following section on “SOI
Operational Intentions and Measures”.)
GOAL 4. Effective systems ensure maintenance of NZBS regulatory

compliance27
To demonstrate achievement of high standards and assure public confidence in

the nations blood supply, NZBS will ensure that regulatory accreditation and
compliance requirements are maintained at all times.
All NZBS collection and manufacturing sites will at all times retain Manufacturing
Licenses. The six licensed sites are audited annually by Medsafe against the
Code of Good Manufacturing Practice (GMP).
All NZBS diagnostic laboratories, including six hospital Blood Banks, will at all
times retain IANZ accreditation. Laboratories are audited by IANZ each year
against International Standard ISO 15189 – “Medical Laboratories – Particular
requirements for quality and competence”.
The national Tissue Typing laboratory will retain ASHI (American Society for
Histocompatibility and Immunogenetics) accreditation. The laboratory
undertakes a monitored self-assessment on an annual basis with a formal
inspection and external audit every two years with the next external audit
scheduled for 2010.
25
see also: 17 pg 10, 38 pg 18
26
27
see also:11 pg 9, 42 pg 21
NZBS is working closely with the clinical haematology service at Auckland City
Hospital to achieve FACT (Foundation for the Accreditation of Cellular Therapy)
accreditation. Increasingly this is a requirement for participation in international
clinical trials in haematology and bone marrow transplantation.
Specific measures in respect of maintenance of Medsafe licences, IANZ and

ASHI accreditation (as appropriate) at all NZBS sites will be reported in section 7
of this document, the SSP.
GOAL 5. NZBS maintains an appropriate business model that is cost-effective

and meets the ongoing blood service needs of New Zealand.
The blood service environment is influenced by many external factors and as

such, regular assessment of the validity of the underlying business model is
appropriate. Any alteration to principles such as self-sufficiency (which ensures
New Zealand’s direct control over surety of supply for blood and blood products,
to meet clinical demand and match prescribing patterns) would be likely to
change strategic goals and objectives, significantly impacting on the operations
and business model of the organisation. Whilst the 2008 joint MOH and NZBS
Financial Sustainability Project found self-sufficiency to be financially cost-
effective for the New Zealand health sector; it is appropriate that this and other
operating principles are regularly reviewed.
Value for money and engagement with key stakeholders will always be major
considerations when reviewing principles/assumptions underpinning the NZBS
business model. The contract for fractionation services (currently with Australian
based CSL Bioplasma) expires in 2011 and NZBS will ensure that it has reviewed
and confirmed its business model prior to commencing the process for confirming
any new contract28.
Achievement of this ongoing strategic goal will be measured by NZBS managing

its operational costs within its revenue levels, and without recourse to its owner
for equity injection. Regular assessment of self-sufficiency and other
fundamental business model principles underpinning the NZBS operational
framework will also be undertaken. As activities associated with achieving this
goal are internal to NZBS they will not be reported in the SSP with the exception
of value for money reporting29 as requested in the Minister of Health’s 2009/10
Letter of Expectations. NZBS activities in respect of maintaining an appropriate
business model support achievement of the Ministry of Health priority outcomes 1
and 2 as presented on page 8 of this document.
GOAL 6. NZBS systems are aligned with international “best practice” in

respect of safety, IT and product development initiatives (as
appropriate for New Zealand)30
Changes in international practice are monitored and, where appropriate, internal

projects are identified, prioritised and implementations managed within available
resources. For example, by the end of 2009 Platelet Additive Solution (PAS) will
start being used by NZBS with consequent efficiency gains through plasma,
which is currently being used for storing platelets, being released for fractionation
into clinical products.
NZBS utilises the 2008 Council of Europe Guide to the preparation, use and
quality assurance of blood components – 14th edition (“The Guide”) as its
external reference standard. The Guide is reviewed on an annual basis by an
28
see also: 37 pg 18
29
see also: 47 pg 35
30
Relates to government goals (a) & (b) on page 8 - see also: 36 pg 17
expert internationally constituted committee. By undertaking its own regular

review of this internationally recognised Guide, NZBS will assure relevance and
appropriate alignment of New Zealand blood safety standards with standards
applied in European countries and Australia.
NZBS implements the Council of Europe guidelines (as appropriate to the New
Zealand situation) related to the testing and manufacture of blood and blood
components. Maintenance of systems and processes is a necessary component
of achieving this. NZBS currently uses equipment and has in place operating
policies that ensure the New Zealand blood supply remains as safe as possible
and comparable to safety levels in other developed countries. Regular
monitoring of international developments in standards and technology since the
inception of NZBS has prompted numerous advancements in this country and it
is intended that this process will be ongoing.
Success measures will be specific to each project initiated and, as such projects
are internal to NZBS, measures are not reported in the SSP.
GOAL 7. NZBS has a sustainable, competent and engaged workforce.
NZBS policies, programmes and practices will meet legislative requirements,

promote the seven key elements of a “Good Employer” and meet good faith and
employment contract obligations in line with government expectations31. Human
resources strategy aligns with the NZBS vision and values; developing quality
leaders, attracting, optimising and retaining top talent to achieve strategic
objectives.
Training and development of staff is of paramount importance as NZBS can not

easily import the specialist skills it requires to operate at the high standards
necessary in a safety dependent and highly regulated business environment32.
Informed by a comprehensive Training Needs Analysis, the 2008 NZBS Learning
and Development Plan defines staff development objectives over the three year
period of this SOI and beyond. Leadership development (with a focus on
operational managers and clinical staff), technical training and ongoing
professional development will be the key areas for training investment during the
period of this SOI. International collaboration, at both a clinical and management
level ensures that New Zealand’s transfusion service and blood safety standards
continue to be contemporary and cost-effective.
NZBS recognises the importance of listening to staff and understanding what
they see as important in order to enhance engagement, participation,
productivity, reduce staff turnover, and achieve strategic and operational
objectives. Employee commitment will be measured in each year of this SOI
through a workforce engagement survey (enabling benchmarking year on year by
identifying the percentage of staff in each of three defined engagement
categories).
Achievement against this strategic objective will be measured by an improvement
in the staff workplace engagement profile of the organisation (using the JRA and
Associates engagement level tool). NZBS aims to improve workplace
engagement from 28.3% in 2008 (compared to the Health Services and Central
Government benchmark of 21.7%) and reduce turn-over from 18.5% in 2007/08
to 12% by July 2012. As activities associated with achieving this objective are
internal to NZBS they will not be reported in the SSP.
31
see definition of “Good Employer” in Glossary, 40 pg 20, 41 pg 21 – see also MOH priority outcome 3 on page 8
32
see also: 40 pg 20, 41 pg 21

5. CAPABILITY AND ISSUE MANAGEMENT

To achieve the Strategic Goals outlined in previous sections of this document NZBS must maintain or enhance its organisational capability and operate
effective systems to identify and manage any issues that may arise as external or internal business needs/conditions alter. Current organisational
capability and some of the issues presently identified in key business areas are discussed in the table below along with presentation of management
activities planned or currently active:
Business Area Current Status Management Activities

DHB Relationships, NZBS is a provider of essential products and services to The relationship that exists between NZBS and the Lead
Revenue/Funding33 the New Zealand health sector and recovers its costs of DHB CEO is well maintained and provides an effective
operation from revenue obtained on a fee for service channel of communication for ongoing planning and
basis from its customers. issue resolution for both NZBS and DHBs.
An effective relationship with its primary customers, theNZBS has incorporated financial policy setting, internal
DHBs, is vital to NZBS operations. The DHB CEOs have efficiencies and anticipated volume growth for specific
identified a Lead DHB CEO for the NZBS relationship products and services into the financial forecasts.NZBS
which simplifies communication between both parties. plans to share with the DHBs, annual, realised net
NZBS acknowledges the sector expectation of working financial gains that it may achieve due to optimal product
within an FFT price increase to fund “business as usual” mix demand, improved fractionation yields and cost
and NZBS controlled activities. efficiencies, in accordance with NZBS policy and subject
to agreement with the Ministers of Health and Finance.
Blood Collection / The existing database of approximately 130,000 active Donor recruitment and retention continues to be a major
Donor Management34 donors is sufficient to meet current and projected focus for NZBS and there are a number of new and
collection requirements. The current population of ongoing initiatives to support optimal utilisation of the
donors in New Zealand is aging. donor database and, in particular, recruit youth donors to
Demand for plasma products in New Zealand in the last address the generally 35
aging demographic of New
year has shown considerable volatility. Analysis Zealand blood donors .
demonstrates that plasmapheresis is the most cost- NZBS is increasing its engagement with Maori and
effective mechanism to collect plasma required, Pacific populations through a number of targeted
additional to that recovered from whole blood collected to initiatives including encouraging support for both blood
supply red cells. NZBS must therefore focus on effective donation and the New Zealand Bone Marrow Donor
management of plasmapheresis donors to match Registry (NZBMDR) for which NZBS (working in
donation numbers with plasma requirements. Whilst partnership with the Leukaemia and Blood Foundation)
plasma is the driver for collections in New Zealand it is carries out both recruitment and tissue typing services for
33
34
35
see also: 21 pg 11


vital that NZBS also ensures it maintains capability to potential donors.
meet demand for red blood cells and platelets. Since 2006/07 regular use of a computer survey system
Recent changes in the Council of Europe Guide permit (Touch-Poll) has enabled NZBS to assess donor views
an increase in the volume of plasma collected during on selected issues and facilitate improvements in
each plasmapheresis donation which has improved the service.
overall efficiency of NZBS plasma collection operations. In 2007 NZBS launched the Start a Fan Club internet
based promotional campaign in response to donors’
feedback that they want to know more about how their
donated blood is used to save lives. New recipient
stories keep the site fresh and this continues to be
popular with donors. (See www.startafanclub.co.nz)
Implementation of the recommendations of the
Behavioural Donor Deferral Criteria Review conducted in
2007/08 occurred in early 2009.
Blood and Tissue Processing, NZBS maintains full capability to process, test and NZBS will continue to manage introduction of new
Testing and Accreditation36 accredit all collected blood in a manner consistent with standards and/or technologies to ensure alignment with
accepted international standards (Council of Europe). international best practice and to make such
modifications as are necessary to acknowledge the
The Human Tissue Act 2008 included regulation of the specific requirements in New Zealand.
therapeutic use of cells and tissues. NZBS is active in
this area being the predominant supplier of human bone An annual review of international blood safety is carried
and sole supplier of human skin to DHBs and private out to monitor and inform maintenance of testing
healthcare providers. standards.
NZBS will commence implementation of platelet additive
solution (PAS) in 2009/10. This reduces the volume of
plasma used to store platelet concentrates, liberating
additional plasma for fractionation from within current
collection levels.
PAS is also an additional safety measure as it is
recognised internationally to reduce the risk of adverse
reactions in recipients, especially Transfusion Related
Acute Lung Injury (TRALI) which can occur following
transfusion of plasma containing blood products.
36


Plasma Fractionation37 NZBS contracts with a third party fractionator to ensure NZBS and its predecessors have had a long standing
fractionated products of required specifications, prepared relationship with Australian based CSL Bioplasma who is
from New Zealand plasma, are available when clinically responsive to the changing needs of NZBS. Key staff at
required. This contract is scheduled to expire in 2011. NZBS and CSL work together to manage production of
fractionated products by altering the amount or timing of
Unlike a standard manufacturing environment, the plasma fractionation to most effectively meet product
protein composition of raw plasma entering each requirements at all times. CSL also keep NZBS informed
fractionation process is determined by the individual of variations in yield due to changes in manufacturing
donors contributing to it. This introduces an unknown processes or protein composition of plasma.
human variable into the production model. This adds
further complexity and risk to forecasting exact yield andWith the current CSL contract expiring in 2011, NZBS
hence the amount of manufactured product ultimately commenced in 2008/09 a review of its plasma
derived from each pool of plasma fractionated. fractionation requirements and the potential for an
Variations in product yield have significant impacts upon alternative fractionation partner. This is a substantial
per unit costs of production and inventory levels. piece of work which will be ongoing into 2009/10. NZBS
will be keeping key stakeholders including the MOH
As is the case for all blood services, fractionation fees updated on developments with this major contract.
are a major cost for NZBS with relatively small
percentage changes impacting significantly on overall
business costs.
Product Mix and Volume38 Like blood services all over the world, NZBS is Working in partnership with DHB clinicians, NZBS plays
vulnerable to unexpected or unmanaged changes in the an active role in product management activities to ensure
mix or volume of products utilised by its customers during appropriate utilisation of blood and blood products.
the year. Even small changes in mix, volume or
fractionation yield have the potential to affect revenue Some issues in respect of key products and brief
and result in significant over or under recovery of discussion of their management are presented below:
operating costs.
Clinical appropriateness of various treatment
options/products is the key driver to utilisation alongside
cost and efficiency considerations.
37
see also: 28 pg 14
38
see also: 17 pg 10, 25 pg 13


Biostate Biostate
Volumes are based on the final 2 years of a 3 year The NHMG continues to play a critical role in managing
transition plan from plasma-derived Biostate to the transition from Biostate to agreed levels of
recombinant product, as agreed with the National recombinant product over the 3 year transition period.
Heamophilia Management Group (NHMG).
Arrangements are in place with CSL Bioplasma for the
sale of surplus Biostate, to ensure that the donor’s gift is
maximised and to provide a financial return for product
not able to be used in New Zealand.
Immunoglobulin products Immunoglobulin products
Consistent with blood services around the world, NZBS works closely with DHBs to manage use of
immunoglobulin continues to be the primary product intravenous immunoglobulin (Intragam P) in New
driver for blood collection in New Zealand. Zealand. Investigation in partnership with the prescribing
clinicians is ongoing as NZBS attempts to establish the
NZBS clinical audit data indicates that the prescribing of reason for changes in utilisation of this product which is
intravenous immunoglobulin in New Zealand is largely the driver for collections activity.
consistent with published international guidelines.
Based on this recent change in demand and contrary to
Use of intravenous immunoglobulin products had until international growth trends, NZBS planning assumes that
2008/09 been growing at 8% per annum. However, that in the next 3-5 years New Zealand’s use of
growth has now plateaued. immunoglobulin will grow at the reduced rate of 1% per
annum. This rate of growth is much lower than that seen
At the time of writing there is no known reason for this
in other countries (for example growth in Australia is
change in utilisation, which is not currently being seen in
approximately 13% per annum). This plan is based on
any other country. The potential volatility around use of
the reduced plasma collection volumes; however these
this product in New Zealand makes planning and
will be adjusted up or down if there is a sustained change
forecasting particularly challenging.
in demand for this product. It is, important to understand
that there is a 6 – 12 month lead time from a change in
donor collection activity (which can not be easily “turned
on and off”) to provision of finished product.


Facilities39 NZBS has four major blood collection and processing A comprehensive review of collection strategies and all
sites located in Hamilton, Auckland, Christchurch and facilities will be completed by the end of 2009 to ensure
Wellington supported by two collection co-ordinating continuation of the most cost-effective and efficient
centres (Dunedin and Palmerston North) and regional methods of collection as New Zealand’s blood service
static collection sites in Tauranga, Napier and Nelson. requirements change.
Blood donation accreditation testing is undertaken at the
sites in Auckland and Christchurch. The tissue typing
and red cell reference laboratories are located in
Auckland.
Regular internal and external audit of how facilities are
meeting current GMP requirements and organisational
needs is undertaken.
Labour Costs40 Labour costs are the largest single cost in running the Recognising the significant impact that DHB employment
blood service. Over recent years clinical staff numbers relations practices and collective agreement negotiations
have increased in response to higher collection and have on the organisation, NZBS actively participates in
processing requirements; however with the planned sector forums whenever possible and seeks to keep
reduction in plasma collection requirements frontline FTEabreast of employment relations matters in the wider
numbers will be reduced in 2009/10. It is planned that DHB health sector. NZBS is required under the NZPHD
this reduction will be achieved through attrition. There Act to consult with the Director-General of Health on its
has not been, and there are no plans for, increased bargaining strategy prior to commencing any Collective
“back-office” non-clinical FTE. Agreement negotiations and settlement with staff on
Individual Employment Agreements. This bargaining
Operating in the same labour market, NZBS needs to be strategy also needs to be consistent with the
consistent with health sector collectives that have been Government’s 20 February 2009 published expectations
negotiated by the DHBs. for pay and employment conditions in the State Sector.
For some employee groups NZBS is directly linked as
part of sector wide Multi Employer Collective
Agreements.
39
40
see also: 14 pg 9, 31 pg 15, 41 pg 21


Being a “Good Employer”41 Consistent with government expectations and to achieve To ensure it has a staff sufficient in both number and
its Strategic Goal 7, NZBS needs to be a “Good skills to provide its specialist, essential services, NZBS
Employer”. places considerable emphasis on creating a work
environment capable of attracting and retaining skilled
NZBS operates in a small sector niche; therefore employees. Learning and Development initiatives and
retaining key staff with specialised skills will always be a attention to succession planning also mitigate against the
primary focus. risks inherent in loss of key personnel and ensure best
utilisation of financial resources in respect of labour costs
It is critical to the organisation that it can attract and An NZBS Recruitment strategy and refreshed recruitment
retain skilled, committed employees to ensure that the on brand will be developed by the end of 2009 to help attract
going viability and safety standards of the blood supply to and retain key talent.
the country are not compromised. Training to develop NZBS has an integrated Learning and Development
and maintain specialised transfusion medicine skills is an framework informed by a comprehensive Training Needs
ongoing requirement. NZBS has reviewed its recruitment Analysis to support appropriate development of the skills
policies to be certain that they uphold best practice and and talent necessary to maximise employee potential
are non discriminatory. and provide essential blood services.
Training is provided to staff on recruitment practices to As part of NZBS being an employer of choice, Human
ensure that the organisation’s obligations as an equal Resources policies, practices and programmes have
opportunity employer are met. been developed or reviewed to ensure legislative
requirements are met and that there is alignment with the
seven key elements of being a “Good Employer”.
Regulatory compliance and All NZBS manufacturing sites are GMP compliant and NZBS works closely and successfully with
Quality Systems hold licences to manufacture blood components. NZBS regulators/auditors to ensure that all manufacturing
management42 diagnostic laboratories, including 6 hospital Blood Banks, centres retain required licences to manufacture blood
are IANZ accredited. The National Tissue Typing components, and all diagnostic laboratories hold
laboratory is accredited by ASHI. Maintaining appropriate accreditation at all times.
registration and appropriate licences is part of “business
as usual” with continuous quality improvement
fundamental to the organisation at all levels.
The establishment of the Australia and New Zealand
Therapeutics Products Agency (ANZTPA) to replace
Medsafe was put on hold by the previous government.
41
see also: 14 pg 9, 31 pg 15, 40 pg 20
42


Work done in 2006/07 identified significant workload and
fiscal implications associated with establishment of a joint
Trans-Tasman regulator and this will need to be
addressed should the initiative be reactivated.
Information Service Initiatives NZBS has established IT systems that promote efficiency Ongoing hardware and software upgrades are planned
and Usage Reporting43 in business processes and support maintenance of GMP throughout the 3 years of this SOI to ensure that the
(most notably through the national blood management electronic systems supporting NZBS operations are
system, Progesa which is also utilised in each of the robust and effective.
DHBs to support their blood bank activities). A focus for 2009/10 is progressing planning and initial
stages of a major upgrade of the electronic blood
Detailed monthly product utilisation/demand
management system (in both NZBS and the DHBs).
management reports are generated for DHBs to enable
Upgrade is required to ensure that this essential system
them to better understand and manage their use of blood
is vendor supported and capable of maintaining safety
products.
(primarily through ensuring reliable donation/product
information and traceability is available) and enhancing
functionality and performance. This project, which will
conform to the Ministry of Health guidelines on IT
investment will extend through to 2010/11.
Activity Based Costing The NZBS activity-based costing model is currently Review of the current costing model is taking place in
Model44 under review and the model, with any revisions, will be response to changing business drivers.
used to inform the 2010/11 DHB contracts.
Current assumptions around cost allocation to specific
Whilst the overall pool of NZBS costs will not alter, a products will be tested, and potential realignment of cost
change in the cost allocation methodology across drivers will be considered. This review has the potential
different product categories would alter product margins to alter individual product costs and hence sale prices.
and inventory valuations which, combined with revenue
being based on both volume and mix of sales, may result
in the forecast financial results changing.
43
see also: 16 pg 10, 22 pg 12, 49 pg 35
44
see also: 12 pg 9

PART II
6. FINANCIAL PLAN
6.1 Overview of Financial Plan
The 2009/10 Financial Plan has been based on the 2008/09 forecast, incorporating actual
results to 31 March 2009, which includes a reduction in growth for Intragam P demand to
1% each year as well as incorporating the planned reduction in Biostate volumes as agreed
with by the NHMG over the SOI forecast period.
The financial forecast has been prepared as required by the Crown Entities Act 2004 for
disclosure in this SOI and may not be appropriate for any other purpose. If NZBS becomes
aware that there are changes to the assumptions detailed below, which may impact the
stated financial position, this SOI will be amended accordingly under section 148 of the
Crown Entities Act 2004.
The NZBS Board has agreed the financial forecast at the date of signing of this SOI.
6.2 Key Assumptions

The following assumptions are key elements underpinning the financial forecasts for
2009/10 through to 2011/12:
Assumption Comment / Risk

1. Forecast Annual price increases are Given the deteriorating global economy the
aligned with the sector’s Future Funding MOH has advised there is a risk that the
Track % (FFT%) as advised by the MOH, FFT figures in the two outer years may
details are: change.
• 3.12% in 2009/10
• 2.60% in 2010/11
• 2.60% in 2011/12
2. Collection volumes for 2009/10 are 2008/09 YTD (end March) annualised
estimated to be: volumes were:
• 147,000 for whole blood donations Collection Method 2008/09
• 14,600 for plasmapheresis donations
Whole Blood 149,500
• 6,000 for plateletpheresis donations
Plasmapheresis 24,000
The forecast for the out years is as follows: Plateletpheresis 6,300
Collection Method 2010/11 2011/12

Whole Blood 147,000 147,000 Note: Collection volumes are sensitive to
product demand assumptions. Plasma
Plasmapheresis 12,000 12,600 collection volumes have been reduced from
the 2008/09 target in direct response to the
Plateletpheresis 6,000 6,000
projected demand for Intragam P (see
assumption 5) and the introduction of
Platelet Additive Solution (see 3 below).
3. Platelet Additive Solution (PAS) will be Plasmapheresis collection targets have
implemented for platelets recovered from been phased on the assumption that fewer
whole blood collections by 31 December collections will be required after the
2009 and for apheresis platelets by 30 June implementation of PAS.
2010. PAS liberates plasma previously

used to suspend platelets, for fractionation, For 2009/10 the phasing is as follows:
thus reducing plasmapheresis collection
requirements further. • 7,900 plasmapheresis collections
between 1 July 2009 and
31 December 2009
• 6,750 plasmapheresis collections
between 1 January 2010 and
30 June 2010
4. Red Cells, the major product within the Sales volumes are totally dependent on
Fresh Product sales category is assumed to health sector demand. Collection volumes
have stable utilisation of 129,000 each of will be flexed as required to meet demand.
the 3 years of this SOI
5. Intragam P sales will increase at 1% per There has been a reduction from the prior
annum. Intragam P assumption trend of 8% growth
per annum. This growth path had been
Intragam P sales volume assumptions are: consistent over the last six years. However
in 2008/09 growth in Intragam P utilisation
Year Intragam P Sales Volumes has plateaued. The reason for this is not yet
(200mL equivalent) understood.
2009/10 19,200 International growth in use of these products
is approximately 13% per annum.
2010/11 19,400
Should utilisation increase OR decrease
2011/12 19,600 from this planned 1% growth path, collection
targets will be adjusted to ensure demand is
met and product expiry is minimised.
(Note: Intragam P has a 2 year shelf-life
which enables stock management to
mitigate risks associated with either high
inventory or meeting demand).
6. Biostate volumes are based on decreasing Biostate utilisation will need to continue to
requirements as identified by the NHMG be carefully managed to the budgeted
and outlined below: volumes by the NHMG and Haemophilia
Treaters.
Year Biostate Sales Volumes
(250 IU equivalent) Any variance to these volumes will impact
on NZBS’ forecast financial performance.
2009/10 15,000
2010/11 12,000
2011/12 12,000
7. It is assumed that only Biostate and NZBS has a developed stock management
Albumex products will have surplus process to minimise product expiry and
production volumes. maximise product utilisation, however; if
stocks of other fractionated product exceed
demand and there is a limited or absent
market for sale of surplus product then a
revision of Net Realisable Value (NRV)
provisioning would be required.


8. No patients will be switched by their clinical Switch of all patients to recombinant
treaters from plasma-derived Factor IX Factor IX would represent a revenue loss of
product to recombinant product over the $3.3M per annum with a consequential
forecast period; however discussion negative cost structure impact on NZBS.
continues to take place with the NHMG on
this issue.
9. New Zealand will remain self-sufficient for The principle of self-sufficiency is regularly
all major blood products including reviewed as outlined in discussion of NZBS
Intragam P. Strategic Goal 5.
There will be financial implications for NZBS
and the wider sector if self-sufficiency is not
maintained.
10. Current fractionation yields are maintained Changes in the yield of fractionated product
over the period of the SOI. obtained from a volume of plasma will
impact either adversely (in the case of
reduced yield) or favourably (in the case of
improved yield) on NZBS’ forecast financial
position.
11. Plasma Fractionation costs in 2009/10 and The CSL Manufacturing Agreement is priced
2010/11 will increase in accordance with in Australian dollars so there is an exposure
the increase as provided for in the CSL to movements in exchange rate. Refer to the
Manufacturing Agreement. foreign exchange assumption 16 below.
The assumed increase in 2011/12 is based The decision about future fractionation
on CPI; however this is dependent on a arrangements for New Zealand will be made
decision about the future fractionator for in 2009/10; therefore the assumption for
New Zealand. Negotiation/renegotiation of fractionation fees in the third year of this SOI
a contract is required prior to 1 July 2011. may change.
12. Establishment level FTEs incorporated in As an essential service provider NZBS must
the financial forecasts are: adapt quickly to changes in demand and/or
safety requirements. Staffing levels are
Year Establishment Level therefore subject to increases or decreases
FTEs in response to business requirements,
2007/08 461.00 particularly changes in demand for products.
Collection staff numbers may need to be
2008/09 464.56 flexed to ensure efficiency is maximised as
NZBS manages changes in demand for
2009/10 457.75 Intragam P.
2010/11 457.75 In 2008/09 new clinical nursing positions
were established to mitigate risks
2011/12 457.75
associated with national maintenance of
staff competencies.
13. The majority of NZBS staff will continue to Staff costs make up approximately 34% of
be employed on collective employee NZBS costs. Most collectives have built into
agreements (either Multi-Employer them an annual increase and merit step
Collective Agreements (MECAs) or Single- increases which have a significant impact on
Employer Collective Agreements). NZBS’ overall annual cost increases.
Assumptions regarding employee cost Settlements in relation to Collective
increases have taken into account the Agreement negotiations have a direct flow
Government’s Expectations for Pay and on effect to costs associated with staff
Employment Conditions in the State Sector working under Individual Employment
published on 20 February 2009 and direct Agreements.


consultation with the Ministry of Health.
Best estimates in respect of possible future
settlements have been included in financial
forecasts, projected out over the next three
years.
14. Plasmapheresis, Plateletpheresis and Forecast collection volumes are subject to
whole blood consumable costs will reflect change in response to alterations in demand
forecasted collection requirements. for products, variation in production yields
and/or collection / processing methods.
Consumable costs (based on current
contracts, or expected CPI increases) and Further staffing and consumable reductions
employee costs (FTE’s required) are in turn would be considered in the event that
based on meeting the projected collection collection volume requirements decrease for
volume targets for 2009/10 and subsequent a sustained period of time.
years. Likewise, if collection volume levels are
required to increase significantly beyond
those forecast; an increase in staffing and
consumables may be required to collect and
process additional volumes.
Note: Many NZBS consumables purchased
from international markets are subject to
foreign exchange fluctuations. Suppliers are
signalling if the current global situation
continues there will be potentially significant
price increases when contracts are due for
renewal. These potential additional costs
have not been factored into the financial
forecast.
15. Changes to regulatory costs will only With the Government decision in 2007 to put
include: establishment of ANZTPA on hold, this SOI
a) Cost of removal and disposal of blood is based on existing Medsafe and other
irradiator in Auckland, (a National NZBS regulatory costs.
Radiation Laboratory regulatory (Note: The Auckland irradiator was not able
requirement) to be removed in 2008/09 as indicated in
b) Costs associated with initiatives to that year’s NZBS Statement of Intent.)
achieve compliance with the Public
Records Act 2005.
16. Foreign exchange rates over the forecast NZBS has exposure to foreign exchange
period of this SOI have been assumed as: fluctuations, primarily the Australian dollar
through its plasma fractionation contract
with CSL Bioplasma
Year AUD$ Euro€ US$ Based on 2009/10 settings a 1 cent
2009/10 0.79 0.44 0.56 movement in the exchange rate increases or
2010/11 0.80 0.46 0.60 reduces fractionation costs by approximately
$200k.
2011/12 0.81 0.46 0.60
NZBS manages this risk via foreign
exchange forward contracts in accordance
with NZBS Treasury Management policy
settings.


17. As a demand-driven service provider to the The policy is currently under development
health sector, NZBS will share with the and finalisation will include consultation with
DHBs, annual, realised net financial gains the Ministers of Health and Finance, Ministry
that it may achieve due to optimal product of Health and the DHBs.
mix demand, improving yields and cost
efficiencies, in accordance with NZBS
policy and as agreed with the Ministers of
Health and Finance.
18. The Capital Charge, paid to the MOH, is
based on the forecast closing equity
position and has been assumed at the
current 8% pa over the forecast period.
19. The quantum of capital expenditure will be Safety requirements and the capital
tightly managed, but may require flexing intensive nature of the blood service
year-on-year in response to clinical operations means that a smooth capital
requirements. spend year-on-year is not a realistic
achievement.
20. Interest rates on borrowings over the period These rates are based on a recently
of this SOI have been based off the renegotiated funding facility put in place with
projected 90 day bill rate and are assumed Westpac New Zealand Limited.
to be:
The level of available funds under the new
facility has been set to ensure forecast
Year Interest Rate funding needs can be easily accommodated
2009/10 3.4 % without need for facility renegotiation. The
term of the new facility covers the majority of
2010/11 3.9%
the forecast period. The facility is operated
2011/12 4.4% in accordance with the approval terms of the
Ministers’ of Finance and Health.
Based on the forecast level of debt, NZBS
exposure to any interest rate movement is
minimal in the context of the overall NZBS
cost structure.
21. Timing of product extraction during The exact timing of fractionation and
fractionation of plasma pools will not result extraction of product from plasma pools by
in “pooling gains” or “losses” which straddle CSL can affect the year end reported result
balance date. if fractionation of a pool straddles the
30 June balance date.
22. There will be no financial impact on the NZBS would follow the process outlined in
forecast financial performance as a result of 2005 by the MOH to secure additional
any plasma pool incident (e.g. loss of a pool funding to off-set financial losses that are
of plasma through contamination or unable to be managed by NZBS.
manufacturing problem).

6.3 Forecast Financial Statements
Forecast Statement of Financial Performance

Budget Forecast Forecast Forecast Forecast
FY 09 FY 09 FY 10 FY 11 FY 12
$000 $000 % $000 % $000 % $000 %
Revenue
Revenue from supplying Blood Products * 80,318 76,587 82.93% 77,817 82.63% 79,845 82.34% 83,012 82.04%
Revenue from supplying Services 14,237 14,588 15.80% 15,329 16.28% 15,996 16.50% 16,668 16.47%
Revenue from Overseas Sales 931 963 1.04% 881 0.94% 966 1.00% 1,327 1.31%
Interest Income 1 210 0.23% 148 0.16% 153 0.16% 177 0.17%
Other Income 7 7 0.01% 7 0.01% 7 0.01% 7 0.01%
95,493 92,354 100.00% 94,180 100.00% 96,967 100.00% 101,189 100.00%
Expenditure
Costs of Production and Goods Sold ** 40,708 34,805 37.69% 35,280 37.46% 36,825 37.98% 39,018 38.56%
Employee Benefit Expense 30,888 30,532 33.06% 32,601 34.62% 32,823 33.85% 33,606 33.21%
Depreciation and Amortisation 3,217 3,204 3.47% 3,650 3.88% 4,135 4.26% 4,678 4.62%
Other Operating Expenses 18,385 17,481 18.93% 18,628 19.78% 19,463 20.07% 20,112 19.88%
Finance Costs 613 363 0.39% 247 0.26% 252 0.26% 256 0.25%
Capital Charge 1,580 2,570 2.78% 2,229 2.37% 2,270 2.34% 2,350 2.32%
Revaluation of Derivative Financial Instruments
95,392 88,954 96.32% 92,635 98.36% 95,767 98.76% 100,019 98.84%
Net Surplus / (deficit) for the Year 101 3,400 3.68% 1,545 1.64% 1,200 1.24% 1,170 1.16%
Other Comprehensive Income - - - - -
Total Comprehensive Income 101 3,400 3.68% 1,545 1.64% 1,200 1.27% 1,170 1.24%
Surplus Attributable to NZ Blood Service 101 3,400 3.68% 1,545 1.64% 1,200 1.27% 1,170 1.24%
Total comprehensive Income Attributable to NZ Blood Service 101 3,400 3.68% 1,545 1.64% 1,200 1.27% 1,170 1.24%
Forecast Statement of Changes in Equity

FY 09 FY 09 FY 10 FY 11 FY 12
$000 $000 $000 $000 $000
Opening Equity balance 19,754 20,863 24,263 25,808 27,008
Total comprehensive Income Attributable to NZ Blood Service 101 3,400 1,545 1,200 1,170
Total recognised income / expense for the year ended 30 June 101 3,400 1,545 1,200 1,170
Contribution from owner - - - - -
Closing Equity balance 19,855 24,263 25,808 27,008 28,178
Forecast changes in Equity over the forecast period

(a) Crown Equity
Opening Balance 15,717 15,717 15,717 15,717 15,717
Total Comprehenive Income for year - - - - -
Closing balance 15,717 15,717 15,717 15,717 15,717
(b) Retained Earnings

Opening Balance 4,037 5,146 8,546 10,039 11,184
Total Comprehenive Income for year 101 3,400 1,545 1,200 1,170
Closing balance 4,139 8,546 10,039 11,184 12,263
Closing Equity Balance 19,855 24,263 25,756 26,901 27,980
Please note:
* the revenue from supplying Blood products is a net figure adjusted for any sector rebate
calculated as payable to the District Health Boards – Financial assumption 17 refers.
** for ease of reporting, the expense category “costs of production and goods sold” is an
aggregated category made up of a number of related but independent expenditures
including changes in inventory.

Forecast Statement of Financial Position

FY 09 FY 09 FY 10 FY 11 FY 12
$000 $000 $000 $000 $000
Equity
Crown Equity 15,717 15,717 15,717 15,717 15,717
Retained Earnings/(Losses) 4,139 8,546 10,091 11,291 12,461
Total Equity 19,855 24,263 25,808 27,008 28,178

Equity % 47.8% 53.8% 52.9% 53.0% 53.6%
Represented by:
Assets
Current Assets
Cash and Cash Equivalents 21 3,203 3,519 5,112 5,538
Trade and Other Receivables 13,657 10,891 11,978 12,411 12,936
Inventories 19,197 21,092 22,461 21,818 22,056
Total Current Assets 32,876 35,187 37,958 39,341 40,529
Non Current Assets

Property, Plant and Equipment 7,725 9,143 9,940 9,986 10,636
Intangible Assets 973 783 930 1,633 1,393
Total Non Current Assets 8,698 9,927 10,870 11,619 12,029
Total Assets 41,574 45,113 48,828 50,960 52,559
Liabilities
Current Liabilities
Trade and Other Payables 4,828 5,223 5,390 5,514 5,628
Provisions * 4,225 5,532 7,329 8,219 8,504
Employee Benefit Liabilities 3,967 3,836 4,124 4,149 4,277
Total Current Liabilities 13,021 14,591 16,843 17,882 18,410
Non Current Liabilities

Employee Benefit Liabilities 1,318 790 813 818 837
Provisions - 799 884 977 1,077
Term Borrowings 7,380 4,671 4,480 4,276 4,057
Total Non Current Liabilities 8,698 6,260 6,177 6,070 5,971
Total Liabilities 21,718 20,851 23,020 23,952 24,381
Net Assets 19,855 24,263 25,808 27,008 28,178
Please note:
* the current liabilities - provisions figure includes any sector rebate calculated as payable
to the District Health Boards – Financial assumption 17 refers.

Forecast Statement of Cash Flows

FY 09 FY 09 FY 10 FY 11 FY 12
$000 $000 $000 $000 $000
Cash Flows from Operating Activities
Cash was provided from:
Receipts from Blood Products and Services Revenue 106,795 106,562 109,091 113,761 118,573
Interest Received 1 210 148 153 177
106,796 106,771 109,239 113,914 118,749
Cash was disbursed to:

Payments to Employees 30,606 30,333 32,291 32,792 33,459
Payments to Suppliers 66,300 63,764 61,793 62,387 66,347
Distributions to Primary Stakeholders 2,300 4,000 4,800
Interest Paid 660 358 210 203 205
Capital Charge Paid 1,615 2,497 2,251 2,268 2,342
Net GST Payable to IRD 5,996 4,889 5,294 5,584 5,863
105,177 101,841 104,139 107,233 113,017
Net Cash Flow from Operating Activities 1,619 4,931 5,100 6,681 5,732
Cash Flows from Investing Activities

Proceeds from the sale of Property, Plant & Equipment

Acquisition of Property, Plant & Equipment (2,811) (2,586) (3,927) (3,398) (4,293)
Acquisition of Intangible Assets (689) (714) (667) (1,486) (795)
(3,500) (3,300) (4,594) (4,884) (5,088)
Net Cash Flow from Investing Activities (3,500) (3,300) (4,594) (4,884) (5,088)
Cash Flow from Financing Activities

Advances from Term Borrowings 1,850
1,850

Repayment of Term Borrowings (178) (191) (204) (219)
(178) (191) (204) (219)
Net Cash Flow from Financing Activities 1,850 (178) (191) (204) (219)
Net increase/(Decrease) in Cash and Cash Equivalents (31) 1,453 316 1,593 425
Cash and Cash Equivalents at the beginning of the year 52 1,750 3,203 3,519 5,112
Cash and Cash Equivalents at the end of the year 21 3,203 3,519 5,112 5,538
Reconciliation of Surplus with Net Cash Flow from Operating Activities

FY 09 FY 09 FY 10 FY 11 FY 12
$000 $000 $000 $000 $000
Surplus/(Deficit) post Distributions 101 3,400 1,545 1,200 1,170
Add Back Non Cash Items:

Depreciation & Amortisation 3,217 3,204 3,650 4,135 4,678
Changes in Premises Reinstatement Provision - (61) 85 93 100
Movement in Working Capital:

(Increase)/ Decrease in receivables (633) 407 (1,062) (408) (500)
( Increase) / Decrease in Prepayments (25) (25) (25) (25) (25)
(Increase) / Decrease in Inventories (1,371) (2,797) (1,369) 643 (238)
Increase / (Decrease) in Trade Creditors & Other Payables 69 71 67 62 63
Increase / (Decrease) in Other Payables (39) (2,302) 101 62 51
Increase / (Decrease) in General Accruals 17 2,834 1,797 890 285
Increase / (Decrease) in Employee Entitlements 283 199 311 31 147
Net Cash Inflow/(Outflow) from Operating Activities 1,619 4,931 5,100 6,681 5,732

7. FORECAST STATEMENT OF SERVICE

PERFORMANCE 1 JULY 2009 TO 30 JUNE 2010
The New Zealand Blood Service has one overall output, comprising three parts, associated
with achievement of the outcome below:
New Zealand Blood Service Outcome
The healthcare community is supported by the New Zealand Blood Service’s provision of
safe, appropriate blood and tissue products and related services in an equitable, timely, and
cost-effective manner.
Value 2009/10
OUTPUT $
(excl GST)
Provision of a safe and effective blood service for all New Zealanders
Surplus of
through supply and delivery of:
$1.5M45
• Fresh Blood Components;
• Fractionated Blood Products; and
• Other products and related services.
The following table details the service performance measures for 2009/10 that will be
reported against in the NZBS Annual Report. Where possible input/output measures and
standards for key products and Strategic Goals have also been included for the remaining
two years of this SOI (2010/11-12).
Strategic Objective Output / Measure Standard

1. NZBS provides its functions 1.1 Deliverable/Quantity
effectively, efficiently and NZBS will ensure that safe blood, blood Demand for products and
safely within available products and services are supplied to services is met at all
resources46 meet demand 24 hours per day, 7 days times
per week.
Note: Total annual input/output estimates for key

products and services in 2009/10 are:
• Changing clinical demand
during 2009/10 may result
1.1.1 Raw Material Inputs:
in the need to adjust
collection and production • Total Whole Blood donations to be • Total input is collected
activity causing variations collected in 2009/10 as required by 30 June
from the stated o 147,000 collections 2010
deliverables.
45
see also: 20 pg 11
46

Whole Blood Donations

149,500
147,000 147,000 147,000
150,000
145,000
140,000
Donations Collected
135,000
130,000
125,000
120,000
115,000
110,000
105,000
100,000
2008/09 2009/10 2010/11 2011/12
YTD (end M arch) Fo recast Fo recast Fo recast
A nnualised Co llectio ns Co llectio ns Co llectio ns
Co llectio ns
Year
• Total Plateletpheresis donations to be • Total input is collected

collected in 2009/10 as required by 30 June
o 6,000 collections 2010
Plateletpheresis Donations
6,300 6,000 6,000 6,000

7,000
Donations Collected
6,000
5,000
4,000
3,000
2,000
1,000
0
2008/09 2009/10 2010/11 20011/12
A nnualised Co llectio ns Co llectio ns Co llections
Co llectio ns
Year
• Total Plasmapheresis donations to be • Total input is collected

collected in 2009/10 as required by 30 June
o 7,900 collections between 1 July 2010
2009 to 31 December 2009
o 6,700 collections between 1 January
2010 to 30 June 2010

Plasmapheresis Donations
35,000
30,000 24,000
Donations Collected
25,000
20,000 14,600
12,000 12,600
15,000
10,000
5,000
0
2008/09 2009/10 2010/11 2011/12
A nnualised Co llectio ns Co llectio ns Co llectio ns
Co llectio ns
Year
1.1.2 Fresh Blood Component Outputs:

• Total Red Cells to be produced in • Total output is
2009/10 produced as required
o 140,000 units by 30 June 2010
• Total Platelets to be produced in • Total output is
o 18,600 adult doses by 30 June 2010
• Total Plasma to be produced in 2009/10 • Total output is
o 20,500 units produced as required
by 30 June 2010
• Total Cryoprecipitate to be produced in • Total output is
o 2,800 units by 30 June 2010
• Total Plasma for fractionation produced • Total output is
in 2009/10 produced as required
o 43,700kgs by 30 June 2010
1.1.3 Fractionated Product Outputs:
• Total immunoglobulin product units to be • Total output is issued
issued in 2009/10 as required by 30 June
o 19,300 Intragam P and NextGen 2010
(200ml equivalent vials)
Total Immunoglobulin Product Use
19,700
19,800
19,500
19,600
Units Issued
19,300
19,400 19,200
19,200
19,000
18,800
2008/09 2009/10 2010/11 2011/12
Annualised
Year


• Total Biostate 250 IU equivalent vials to • Total output is issued
be issued in 2009/10 as required by 30 June
o 15,000 vials 2010
Plasma Derived Factor VIII 250 IU equivalent

Issues/Forecast Issues 2003 - 2011
35000
30000
250 IU eq. Issued

25000
20000
15000
10000
5000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011
Fo recast Fo recast Fo recast
Year
1.1.4 Other Products / Service Outputs:

• Total Tissue Typings associated with • Total output is provided
transplant patients/donors and disease as required by 30 June
studies to be carried out in 2009/10. 2010
o 7,500 typings
• Total number of antibody screens to be • Total output is provided
performed for patients awaiting organ as required by 30 June
transplant in 2009/10. 2010
o 7,000 patient samples screened
• Total number of femoral heads to be • Total output is issued
issued in 2009/10. as required by 30 June
o 540 femoral heads issued 2010
• Total number of patient blood groups • Total output is provided
and antibody screens to be performed in as required by 30 June
2009/10. 2010
o 143,500 patient samples screened
1.1.5 Therapeutic Service Outputs:

• Total number of plasma exchanges to be • Total output is provided
performed in 2009/10 as required by 30 June
o 400 exchanges 2010
• Total number of stem cell harvests to be • Total output is provided
performed in 2009/10 as required by 30 June
o 270 harvests 2010
• Total number of therapeutic • Total output provided
venesections to be performed in 2009/10 as required by 30 June
o 5,000 venesections 2010


1.1.6 Value for Money Reporting:47
• NZBS will produce quarterly reports
outlining initiatives to assure value for • Reports produced each
money is being delivered, in line with quarter
the expectations of the Minister of
Health.
2. NZBS maintains a donor 2.1 Deliverable/Quantity

population capable of NZBS will maintain during 2009/10, an Demand for blood and
supporting ongoing blood active donor population estimated at blood products in
product demand in New 130,000 that is capable of supporting 2009/10 is met at all
Zealand48 demand for blood and blood products in NZ. times by a donor
population of approx
130,000.
2010/11-12 Deliverable/Quantity
To support demand for blood and blood Demand for blood and
products in NZ, NZBS will maintain an blood products in
active donor population estimated at 2010/11 and 2011/12 will
130,000 in 2010-11 building by 2,000 to be met at all times by a
approximately 132,000 in 2011/12. donor populations of
approx 130,000 and
132,000 respectively in
each year.
3. NZBS – DHB relationships 3.1 Deliverable/Quantity
are mutually supportive and NZBS will prepare and share comprehensive Monthly product
productive monthly product utilisation reports utilisation reports are
individually with all DHBs49. provided individually to all
DHBs.
For the period of this SOI NZBS will prepare For the period of this SOI
and share comprehensive monthly product monthly product
utilisation reports with all DHBs. utilisation reports are
provided to all DHBs.
3.2 Deliverable/Quantity
To promote risk awareness and best A Haemovigilance Report
practice in transfusion NZBS will prepare for the 2009 calendar
and publish a Haemovigilance Report for the year is prepared and
2009 calendar year and will share this provided to all DHBs.
information with all DHBs50.
For each year of this SOI NZBS will promote For each year of this SOI
risk awareness and best practice in Haemovigilance Reports
transfusion by preparing and publishing a will be prepared and
Haemovigilance Report that it will share with provided to all DHBs.
all DHBs.
47
see also: 29 pg 14
48
49
see also: 16 pg 10, 22 pg 12, 43 pg 22
50
see also: 3 pg 7 23 pg 12


3.3 Deliverable/Quantity
NZBS will proactively engage with DHBs Demonstrating a mutually
through the Lead DHB CEO to agree pricing supportive and productive
for the 2010/11 year and will ensure that this relationship NZBS and
information is provided to DHBs in sufficient DHBs agree pricing for
time to inform preparation of organisations 2010/11 in time to inform
Annual Plans51. Annual Plans.
For each year of this SOI NZBS will actively Demonstrating mutually
engage with DHBs to agree pricing and will supportive and productive
provide pricing information in time to inform relationships NZBS and
NZBS and DHB planning activities. DHBs will agree pricing in
each year of this SOI in
time to inform
organisations Annual
Plans.
Please note that deliverables/quantities shown above in italics for 2010/11-12 will not be
reported on in the 2009/10 NZBS Annual Report.
51

8. REPORTING
8.1 Formal Reports
The following information will be made available by NZBS:
Statement of Intent
A Statement of Intent will be prepared and provided to the Minister of Health within the
timeframe required.
Annual Report
An Annual Report and audited financial statements will be prepared and provided to the
Minister of Health within timeframe required.
Quarterly Report
In addition to routine financials, NZBS will report quarterly to the MOH on its performance
against the performance measures in section 7of this Statement of Intent. The report will
be provided within four weeks following the end of each quarter.
Monthly Financial Reports
NZBS will report each month on its financial performance in delivery of its functions under
the NZPHD Act. Each report will be provided on or before the twentieth day of the following
month in a form set by the MOH.
In the event that there is a material variance from budget, on request from the MOH, NZBS
will supply such further information as may be appropriate, including the reason for the
variation. Revised year-end forecasts will be provided to the MOH on request.
8.2 Informal Reports

NZBS will provide the Minister through the MOH with information that enables monitoring of
its performance in delivery of its outputs. Ongoing dialogue and meetings between the
Minister of Health, MOH representatives and NZBS will support formal reporting.
In addition to the formal reports specified above, the NZBS Board will at any time:
• alert the Minister and the Ministry of Health to any material factors that could preclude
the achievement of any obligation or expectation set out in this SOI or in any Statement
of Owner’s Expectations issued by the Minister;
• consult with the MOH on issues having, or likely to have, substantial effects on
consumers, or the provision of blood products or services or on the ability of NZBS to
carry out its function under the Gazette notice of 2 July 1998 or to comply with these
terms and conditions. When the likelihood of such issues is foreseen by NZBS, or
where the issues come to the attention of NZBS, the consultation shall be as soon as is
reasonably practicable;
• inform the Minister or the Ministry of Health of any issue likely to be of significance to
the Minister or the Government.

8.3 Information for Ministers

NZBS will provide:
• the MOH with information that will enable it to prepare Ministerial briefings and draft
speech notes. Where practicable, the information provided will be in an agreed form
(and normally within 10 working days of request); and
• the MOH with information (in an agreed form) that will enable the relevant Minister to:
(i) respond to Parliamentary questions within 3 working days for written questions
and respond to oral Parliamentary questions the same day; and
(ii) process routine Ministerial correspondence within 10 working days, semi-urgent
correspondence (letters to Members of Parliament) within 7 working days and
urgent correspondence within 3 working days; and
(iii) process Select Committee inquiries within 10 working days in the case of a
standard questionnaire and within 5 working days in the case of supplementary
questions or such other timeframe as specified by the Select Committee.
1. RESTRICTIONS
Use of Money
NZBS acquisition of securities is regulated under section 161 of the Crown Entities Act
2004.
NZBS borrowing is regulated by section 162 of the Crown Entities Act 2004.
Retention of Crown Equity

In relation to delivery of its outputs NZBS may retain Crown Equity (surpluses), subject to
S165 of the Crown Entities Act 2004.
Guarantees and Indemnities

In accordance with section 163 of the Crown Entities Act 2004 NZBS may not, with or
without security, give a guarantee to or indemnify another person other than provided in
section 160 of the Crown Entities Act 2004.
Dealings with Land

NZBS has no land assets. However, should any land be acquired by NZBS over this period
then it will not dispose of any estate or interest in any land without first having consulted
with the Minister of Health and having obtained consent to do so, in accordance with
Clause 28, Schedule 6, of the NZPHD Act.
Acquisition of shares or interests in companies, trusts, and partnerships, etc

NZBS is restricted by section 100 of the Crown Entities Act 2004 from acquiring shares or
interests in companies, trusts, and partnerships, etc. It may only do so after giving notice to
the responsible Minister and in accordance with procedures and conditions in its SOI or as
specified by its Minister.

10. OTHER
Records
NZBS will continue to manage its records in accordance with all legislative and regulatory
requirements and good commercial practice.
NZBS adopts the generally accepted accounting principles and policies prescribed by the
Institute of Chartered Accountants, New Zealand. (Refer to Appendix I for the Abridged
Statement of Accounting Policies).

APPENDIX I – Abridged Statement of Accounting Policies
Reporting Entity
The New Zealand Blood Service (NZBS) is an authorised entity pursuant to section 92H of
the Health Act 1956, primarily responsible for the performance of functions in relation to
blood and controlled human substances in New Zealand.
The entity (New Zealand Blood Service) is a Crown Entity in terms of the Crown Entities Act
2004, and a Statutory Corporation under the New Zealand Public Health & Disability Act
2000.
NZBS is a not for profit organisation and its primary objective is to support the New Zealand
healthcare community through managing the collection, processing and supply of blood,
controlled human substances and related services. Accordingly, NZBS has designated
itself as a public benefit entity for the purposes of New Zealand equivalents to International
Financial Reporting Standards (NZ IFRS).
Basis of preparation
The financial statements of NZBS have been prepared in accordance with the requirements
of the Crown Entities Act 2004 and the New Zealand Public Health & Disability Act 2000.
These financial statements have been prepared in accordance with NZ GAAP. They comply
with NZ IFRS and other applicable Financial Reporting Standards, as appropriate for public
benefit entities.
The accounting policies set out below have been applied consistently to all periods
presented in these financial statements and in preparing an opening NZ IFRS statement of
financial position as at 1 July 2006 for the purposes of the transition to NZ IFRS.
The financial statements have been prepared on a historical cost basis, modified by the
revaluation of financial instruments (including derivative instruments).
The financial statements are presented in New Zealand dollars and all values are rounded
to the nearest thousand dollars ($’000). The functional currency of NZBS is New Zealand
dollars.
Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions are recognised in the Statement of
Financial Performance.
Standards and interpretation issued and not yet adopted

Standards, amendments and interpretations issued but not yet effective that have not been
early adopted, and which are relevant to the New Zealand Blood Service include:
NZ IAS 1 Presentation of Financial Statements (revised 2007) replaces NZ IAS 1
Presentation of Financial Statements (issued 2004) and is effective for reporting
periods beginning on or after 1 January 2009. The revised standard requires
information in financial statements to be aggregated on the basis of shared
characteristics and introduces a Statement of Comprehensive Income. The Statement
of Comprehensive Income will enable readers to analyse changes in equity resulting
from non-owner changes separately from transactions with owners. The revised
standard gives NZBS the option of presenting items of income and expense and
components of other comprehensive income either in a single Statement of
Comprehensive income with subtotals, or in two separate statements (a separate
income statement followed by a statement of comprehensive income). NZBS intends to
adopt this standard for the year ending 30 June 2010, and is yet to decide whether it
will prepare a single statement of comprehensive income or a separate income
statement followed by a statement of comprehensive income.

Revenue
Revenue is measured at the fair value of consideration received. Revenue from the
provision of products is recognised at the time the risk and effective ownership transfers.
Revenue from the rendering of services is recognised as the services are provided. Interest
income is recognised using the effective interest method.
Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred.
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other
short-term highly liquid investments with original maturities of three months or less, and
bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the
Statement of Financial Position.
Trade and other receivables

Trade and other receivables are initially measured at fair value and subsequently measured
at amortised cost using the effective interest method, less any provision for impairment.
A provision for impairment of receivables is established when there is objective evidence
that NZBS will not be able to collect all amounts due according to the original terms of
receivables. The amount of the provision is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted using the effective
interest method.
Inventories
Inventories held for sale on a commercial basis are valued at the lower of cost and net
realisable value. The cost of purchased inventory is determined using the FIFO method.
The valuation includes allowance for slow moving items. Obsolete inventories are written
off.
Inventories held for use in the production of goods and services on a commercial basis are
valued at the lower of cost and net realisable value. The cost of purchased inventory is
determined using the FIFO method.
The write down from cost to net realisable value is recognised in the Statement of Financial
Performance.
Property, Plant and Equipment

Property, plant and equipment consists of operational assets which include plant and
equipment, computer hardware, motor vehicles, furniture and fittings / office equipment and
leasehold improvements.
Property, plant and equipment is shown at cost less accumulated depreciation and
impairment losses. The residual value and useful life of an asset is reviewed, and adjusted
if applicable, at each financial year end.
Intangible Assets - Software acquisition

Acquired computer software licenses are capitalised on the basis of the costs incurred to
acquire and bring to use the specific software. Costs associated with maintaining computer
software are recognised as an expense when incurred.
The carrying value of an intangible asset with a finite life is amortised on a straight-line
basis over its useful life. Amortisation begins when the asset is available for use and
ceases at the date that the asset is derecognised. The amortisation charge for each period
is recognised in the Statement of Financial Performance.

Equity
Equity is the Crown's interest in NZBS and is measured as the difference between total
assets and total liabilities. Equity is disaggregated and classified into a number of reserves.
The components of equity are:
• Crown Equity
• Retained earnings
• Fair value and hedging reserves
Goods and Services Tax (GST)

All items in the financial statements are stated exclusive of GST, except for receivables and
payables, which are stated on a GST inclusive basis. Where GST is not recoverable as
input tax then it is recognised as part of the related asset or expense.
The net amount of GST recoverable from, or payable to, the Inland Revenue Department
(IRD) is included as part of receivables or payables in the Statement of Financial Position.
The net GST paid to, or received from the IRD, including the GST relating to investing and
financing activities, is classified as an operating cash flow in the statement of cash flows.
Commitments and contingencies are disclosed exclusive of GST.
Taxation
NZBS is a Statutory Corporation under the New Zealand Public Health & Disability Act 2000
and is exempt from income tax under section CB3 of the Income Tax Act 1994.
Budget Figures
The budget figures are those approved by the Board of NZBS at the beginning of the year
as presented in the Statement of Intent. The budget figures have been prepared in
accordance with NZ GAAP and comply with NZ IFRS, using accounting policies that are
consistent with those adopted by the Board for the preparation of the financial statements.
Cost allocation
Direct costs are those costs directly attributable to the collection and processing of blood
products and delivering the associated services. Indirect costs are those costs which are
not directly related to the production of its products or services.
Critical accounting estimates and assumptions

In preparing these financial statements NZBS has made estimates and assumptions
concerning the future. These estimates and assumptions may differ from the subsequent
actual results. Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations or future events that are
believed to be reasonable under the circumstances. There are no material estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities that need disclosing.
Note: The above accounting policies are abbreviated. A full set of accounting
policies may be found in the 2008/09 New Zealand Blood Service Annual Report
available on the NZBS website www.nzblood.co.nz .

GLOSSARY
TERM DEFINITION
Accreditation Testing carried out on all blood donations involving two distinct processes:
Testing blood grouping and screening for infectious markers.
ANZTPA Australian New Zealand Therapeutic Products Authority.
Apheresis A procedure in which blood is temporarily withdrawn, one or more components

are selectively removed, and the remainder of the blood is re-infused into the
donor.
ASHI American Society for Histocompatibility and Immunogenetics. This is an
international society of professionals dedicated to advancing the science,
education and application of immunogenetics and immunology.
ASHI accreditation The ASHI accreditation program determines whether laboratory procedures
meet documented ASHI standards and requirements.
®
Biostate Biostate . Freeze dried, high purity, plasma-derived human Factor VIII
concentrate, manufactured by CSL. Manufactured using a process that
incorporates two specific viral inactivation steps (solvent detergent treatment
and dry heat).
Blood Consists of cellular components (red cells, white cells and platelets)
suspended in plasma.
Blood group Complex chemical substances found on or in the surface of red cells which
distinguish each blood group. The two more important blood group systems in
transfusion work are the ABO (blood types A, B O and AB) and Rh D (positive
or negative) systems.
Code of Good A set of standards that provide assurance that a manufacturer has a quality
Manufacturing system in place that meets the requirements for the product being made.
Practice
CSL / CSL is a company that develops, manufactures and markets pharmaceutical
CSL Biosplasma products of biological origin. CSL Bioplasma is based in Australia and
manufactures a range of products derived from fractionating human plasma.
Cross-match A term used when testing the patient’s serum against the donor’s red cells.
DHB District Health Board.
Donor A person who gives blood or tissues to be used in another person.
FACT Accreditation The Foundation for the Accreditation of Cellular Therapy (FACT) is a voluntary
professional programme involving setting of standards and accreditation of
bone marrow transplant facilities. This encompasses collection, processing
and clinical transplantation activities
Factor VIII Product used to treat certain types of haemophilia that can be either derived
from blood plasma or produced synthetically using recombinant DNA
technology.
Factor IX Used to treat haemophilia B (Christmas disease) which is caused by a
deficiency in blood clotting factor IX. Treatment product can be derived from
blood plasma or produced synthetically using recombinant DNA technology.
Fractionation Fractionation involves separating substances (e.g. proteins in the case of
plasma) by changing the conditions such as temperature or acidity.
Good Employer As defined by the Human Rights Commission in the published guidance from
the Equal Employment Opportunities Commissioner (June 2006).
GMP Good Manufacturing Practice. A prerequisite of licensing.

TERM DEFINITION
Haemophilia An hereditary deficiency of clotting factors in blood.

Haematopoietic Cells found in the bone marrow capable of the formation of all blood cell types.
Stem Cells
Immunoglobulins Proteins that combat infection.
Intragam P An immunoglobulin product manufactured from plasma and used to boost the
immune system of patients with immune deficiencies or in the treatment of a
range of diseases where the immune system is compromised.
Intravenous Within or administered into a vein.
IU In pharmacology an International Unit (abbreviated to IU) is a unit of
(International Unit) measurement for the amount of a substance producing a specified effect when
tested according to an internationally accepted biological procedure. There is
no equivalence among different substances.
MOH Ministry of Health
NHMG National Haemophilia Management Group.
NZBS New Zealand Blood Service.
NZ GAAP New Zealand Generally Accepted Accounting Practices.
NZIFRS New Zealand Equivalents to International Financial Reporting Standards.
PAS Platelet Additive Solution (see below).
Plasma Liquid portion of blood that contains proteins.
Plasmapheresis A procedure where blood is temporarily withdrawn, plasma is selectively
removed, and the remainder of the blood is re-infused into the donor.
Platelet Additive An additive solution used as a substitute for plasma when storing platelet
Solution concentrates.
Recombinant Products produced by inserting a human gene into an organism (e.g.
product bacterium) that produces the required human protein (e.g. Factor VIII).
Self-sufficiency A fundamental principle in the operation of NZBS, “self-sufficiency” involves
collection and manufacturing to meet all blood product demand in New
Zealand from blood and plasma collected solely in this country.
Serology The science of measurement and characterisation of antibodies and other
immunological substances in body fluids, particularly serum/plasma.
Serum The clear, straw coloured fluid portion of the blood that remains after
coagulation and removal of cellular blood components by centrifugation.
SSP Forecast Statement of Service Performance
TGA Therapeutic Goods Administration - Australian regulatory body assessing and
monitoring activities to ensure therapeutic goods are of acceptable standard.
TRALI Transfusion Related Acute Lung Injury (see below).
Transfusion Related Transfusion Related Acute Lung Injury (TRALI) is a complication of blood
Acute Lung Injury transfusion characterised by the acute onset of pulmonary oedema
(i.e. swelling and/or fluid accumulation in the lungs). This is now recognised to
be one of the most frequent severe complications of transfusion.
Vein to Vein Blood The responsibility for the full supply-chain of blood from blood donor selection
Service and collection of blood through management and testing to final administration
of blood products to patients.

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New Zealand Blood Service Statement of Intent: 1 July 2009 - 30 June 2012

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New Zealand Blood Service

NZBS National Office

2. BUSINESS AND OPERATING ENVIRONMENT..............................................2

4. SOI PERIOD OPERATING INTENTIONS AND MEASURES.........................10

5. CAPABILITY AND ISSUE MANAGEMENT....................................................16

6. FINANCIAL PLAN ..........................................................................................23

7. FORECAST STATEMENT OF SERVICE PERFORMANCE 1 July 2009 to

APPENDIX I – Abridged Statement of Accounting Policies.................................40

NEW ZEALAND BLOOD SERVICE

Anne Urlwin Prof Kathryn Crosier Fiona Ritsma

NEW ZEALAND BLOOD SERVICE Page 1

2. BUSINESS AND OPERATING ENVIRONMENT

Safety is our Cornerstone is an overarching umbrella to everything that NZBS does,

• Striving for Excellence (Te Eke ki te Panekiretanga)

2.2 Statutory Obligations and Minister of Health’s Expectations

To manage the donation, collection, processing, and supply of blood, controlled

• NZBS provides blood and blood services to healthcare providers, thus

NEW ZEALAND BLOOD SERVICE Page 2

• the New Zealand Health Strategy (December 2000).

2.3 Key Relationships

The expectations of these stakeholders are assessed by a variety of means including

NEW ZEALAND BLOOD SERVICE Page 3

2.5 Organisational Structure

JOHN DR PETER DON SUE OLIVE RAY

NEW ZEALAND BLOOD SERVICE Page 4

NZBS Staff by Operational Area

Note: “National” refers to national roles e.g. National Management, Finance,

2.6 Organisation Operations

Collection, Accreditation, Processing and Blood Bank

Collection, Processing and Blood Bank

NEW ZEALAND BLOOD SERVICE Page 5

A comprehensive range of diagnostic testing and support services is also provided to

Flow of Blood Products to DHBs

Apheresis Donation Whole Blood Donation

Plasma Platelets Red Blood Cells

CSL Melbourne Fractionated Products

A clinical oversight programme2 enables NZBS to discharge its statutory responsibility

A national haemovigilance programme3 examines and reports annually on the frequency

Quality, Safety and Compliance – “Safety is our Cornerstone”

3. OUTCOMES AND STRATEGIC GOALS

1. Every dollar is spent in the best way to improve health outcomes

4. Faster access to high quality hospital services

New Zealand Blood Service Outcome

Achievement of this outcome through delivery of products and services to external

EXTERNALLY FOCUSED STRATEGIC GOALS

GOAL 2: NZBS maintains a donor population capable of supporting ongoing blood

GOAL 3: NZBS - DHB relationships are mutually supportive and productive10

INTERNALLY FOCUSED STRATEGIC GOALS

GOAL 4: Effective systems ensure maintenance of NZBS regulatory compliance11

GOAL 5: NZBS maintains an appropriate business model that is cost-effective and

GOAL 7: NZBS has a sustainable, competent and engaged workforce14

Note: With the exception of Goal 4: maintenance of regulatory compliance

4. OPERATING INTENTIONS AND MEASURES FOR

EXTERNALLY FOCUSED STRATEGIC GOALS

NZBS has been successful in maintaining financial sustainability during a period

Careful management of collection strategies (including the capability and location

Elements of unpredictability are ever present in the operation of blood services