Peter Dunne
Wellington, April 2, 2021
But there is a chance for improvement with a new review
Health Minister Andrew Little has promised better health services (TVNZ Screenshot)
Since the early 1980s, successive National and Labour-led governments have struggled to find the best way of funding and delivering effective public health services.
In 1983, the then 29 Hospital Boards administering the country’s health system were replaced by 14 area Health Boards. The Hospital Boards were considered too narrowly focused on hospital-based services, at a time when there was a growing emphasis on wider public health services beyond hospitals, hence the move to area Health Boards.
Health Board experiment dies
But by 1990 it was clear that the new model was struggling to perform any better than its predecessor. When then Health Minister Helen Clark sacked the largest of the area Health Boards – the Auckland Area Health Board (of which her husband was an elected member) – because she considered it dysfunctional, and replaced it with an appointed Commissioner, the short-lived area Health Board experiment was effectively over.
The National government of the early 1990s formally abolished the remaining area Health Boards and replaced them with a centralised Health Funding Agency and four Regional Health Authorities.
‘Americanisation’ of the System
The Regional Health Authorities were intended to bid to the Health Funding Agency for the funding necessary to deliver the appropriate health services required for their region. The model was intended to be accompanied by a detailed definition of what constituted core services, what they might cost and how they could be organised and delivered, to assist Regional Health Authorities in their funding applications to the central body.
However, the core services review immediately aroused suspicions that it was a cover for the introduction of more competitive business models – “Americanisation” it was pejoratively called – to the public health system. When charges were introduced for some short-term emergency procedures requiring a night in hospital, and hospitals were renamed Crown Health Enterprises (or CHEs, as they became widely known) and established as stand-alone enterprises, the public concluded things had gone too far. Another major shake-up to restore a sense of equilibrium was inevitable when the next change of government occurred.
Helen Clark: Established District Health Boards as Prime Minister in 2000 (INL Photo)
Emergence of DHBs
That came in 1999, with Helen Clark, now the Prime Minister, and her trusted adviser Heather Simpson, who has been with her since the mid-1980s, her Chief of Staff. What emerged was a system of 20 district Health Boards, with half the membership elected locally and the other half and the chair appointed by the government. The system was intended to be a careful balance between recognising local interests and the government’s policy priorities and has been the basis of the system since then.
However, the careful balance quickly gave way to stalemate, and a sense that through the power to appoint the Board Chair, the government was usually able to ensure that it got what it wanted, often at the expense of local priorities and concerns.
Autonomy begins to hurt
At the same time, the inherent operational inefficiencies of 20 autonomous boards, each ordering their own equipment and supplies and running their own systems became obvious and cumbersome. Ministers of Health discovered that the autonomy given to boards meant that they had no power to direct boards to do anything, but rather had to plead with them through the appointed board members or pointedly worded phrases in the annual letter of intent sent to each board, in the hope they might get their way.
The last National-led government started to address the organisational inefficiency aspect by getting some smaller boards to collaborate on and share back-room administrative services. But scorched by the public response to its replacement of elected area Health Boards by the appointed Health Funding Agency in the 1990s, National was extremely reluctant to do anything overt about reducing the number of boards, lest it once more be accused of stifling local democracy.
As Prime Minister (2008 to 2016), John Key was reluctant to amalgamate
Instead, it attempted, largely unsuccessfully, to encourage board amalgamations, but the only one that happened during its time was the extremely unpopular merger of Otago and Southland after one board had been fired and replaced by a commissioner.
Another Review by Labour
Another review to tidy up what seemed to be too many loose ends, and to give recognition to the distinct interests of Maori and Pasifika in public health was inevitable when Labour took office in 2017. Just as inevitable, not to mention extremely sensible, was that Heather Simpson should head the review. Few people would have had the length of exposure to the public health system, its strengths and foibles, and the sense of perspective time brings, as she had.
The Simpson Health and Disability Services Review recommendations were released in June 2020. They are a pragmatic response to the current situation. While establishing a new stand-alone national health authority to run the public health system and halving the number of district Health Boards and having them fully appointed by the government, not locally elected, may seem dramatic, it is really a refinement of the funder-provider split model the National Government introduced in the early 1990s.
The proposal to establish a separate Maori Health Authority has been largely welcomed but there has been criticism that no similar model has been proposed to address Pasifika health concerns.
Rare opportunity
For its part, the government has appeared committed to the review, with the Minister of Health promising to announce its decisions on the next steps to be taken shortly. At the time the report was released last year, the then Minister described it as a “once-in-a-generation opportunity to back our world-class doctors, nurses and other health staff and deliver a truly national health and disability system.”
The Simpson Health and Disability Services Review: Pragmatic Response
To achieve this objective, the government’s forthcoming response to the Simpson review cannot be half-hearted or incomplete.
Yet, the history of health sector reform of the last 40 years under successive governments shows that it has never quite achieved its potential because it has never received the sufficiently full endorsement of the government of the day.
Any opportunity for meaningful reform has frequently been compromised by government “cherry-picking” for fiscal and political reasons. More of the same in this instance will simply ensure more of the stagnation that has plagued the system for years.
The present Minister of Health is well placed to break this mould.
Whether he will do so remains to be seen.
Peter Dunne was a Minister of the Crown under the Labour and National-led governments from November 1999 to September 2017. He lives in Wellington. The above article has been sponsored by
