Southern District Health Board lost many ''good long-standing'' finance staff because of uncertainty over their jobs, board member Richard Thomson said.
Health Minister Dr Jonathan Coleman yesterday announced HBL will be wound up. Health boards will now be responsible for the cost-savings projects, and Dr Coleman expects work started by HBL to continue.
However, the sector is unclear what it will mean, including whether Dunedin Hospital's kitchen could still be reduced.
Mr Thomson, who was unaware of the move until contacted, said boards should have more say and flexibility, but he did not know what would happen.
He said board members sympathised when a delegation of kitchen workers demanded answers at a meeting this year, and could be told virtually nothing because the board was not controlling the process.
''The uncertainty for them was almost as bad as the reality of knowing. They didn't know what was happening. I think the board was pretty sympathetic to that.''
It felt like HBL proposals were ''foisted'' from above without a good practical basis.
''Proposals were flagged that then just went on and on and on, and the ground work hadn't been adequately done before they were flagged.''
The board had lost many of its finance staff, as they ''quite understandably'' found new jobs after their work was earmarked for possible centralisation to big centres such as Auckland.
Recruiting new staff, who would not know if the job was for ''three months or three years'', had been tough.
Association of Salaried Medical Specialists executive director Ian Powell said the senior doctors' union was ''caught by surprise'' by the move.
''HBL had become damaged goods.''
HBL did a ''lot of damage'', and disrupted the sector, which would have found ways to successfully bulk purchase and co-operate if they had been left alone.
Mr Powell said boards recently started to take more responsibility for HBL's work programmes.
Its most controversial project involved centralising hospital food production to large centres. That had been slowed down, and now involved only Auckland health boards, Mr Powell said.
Green Party health spokesman Kevin Hague said HBL was used by the Government to create an ''illusion of heroic savings'' to disguise the under funding in health boards.
It had become obvious projected savings were unrealistic, and the impression of savings could only be covered up for so long by a ''book-keeping shell game'', he said.
Established by former Health Minister Tony Ryall, HBL was effectively a ''time bomb'' inherited by Dr Coleman, Mr Hague said.
He expected the Government to find an ''exit path out of the rhetorical trap'' of HBL's much-publicised promised $700 million in savings, which would be managed by new assessments of projects to modify expectations.
In a media statement, Dr Coleman said HBL made good progress developing savings plans, but it was time for boards to take over in a DHB-owned vehicle for finance, procurement, laundry, and food.
The boards' preference was for an entity called healthAlliance Limited to take over the process.
''I have asked the Acting Director-general of Health to establish an interim project governance group to work through the next steps which will include a due diligence process. A final proposal will then be taken to the Cabinet for approval.
''It is expected that HBL will be wound down once the appropriate transitional plans have been agreed. This handover is expected to occur by the end of June 2015.''
Earlier this month, Dr Coleman said HBL helped achieve more than $300 million savings since it was established in July 2010.
