‘Everything to play for in health reform announcement’

Published on Newsroom, 22nd April 2021

There is everything to play for in the announcement of the long-waited health reform package by the Minister of Health, Andrew Little.

The announced structural outline is best seen as an enabling framework that, with good will, political and operational acumen, and sufficient funding, will in time flesh out a reconstructed health system that, while it builds on existing elements, is also a bold, new departure.

There are elements here that echo past reform initiatives.

  • A national health system. This was the centre piece of the Third Labour Government’s proposals in 1975 but never implemented. We will have it now, but in a less bureaucratic form. Its peak body in the current structure will be Health New Zealand.
  • Hospitals separated out to operate efficiently as large-scale health enterprises. This was implemented by the National government in the 1990s. We will have them again now, but working as cooperating networks of providers rather than as competitors in a health market.
  • Commissioning powers. We had this in the 1990s and before with the “purchase-provider” split. This function returns, and the key will be whether these commissioning powers can be used not just to extract efficiencies, but also to improve the distribution of services and enhance equity.
  • A public health agency. This was implemented and disestablished by National in the 1990s as it got too activist and upset industry interests. We will have something similar again, but within the Ministry, and quite possibly a more technocratic, less activist beast. There is a gap here.  
  • Localism. The DHBs established in the 2000s were a tribute to local community interests, as reflected in the continuation of the elective principle and the 20 (previously 21) different health boards. It looks as though the suggested reforms, while dispensing with the elective principle and removing the overarching board function, will retain an element of local responsiveness.
  • Primary and community health care. There is a renewed attempt to put the “health” of the District Health Board concept back on the agenda. It was a brave concept, but the non-hospital agenda of the DHBs has been overwhelmed by a hospital focus, and largely absent. This will be one of the hardest features of the proposed reforms to implement effectively. A lot will depend on leadership in the relevant professions and a willingness to work In the proposed networks at the locality level.
  • Digital infrastructure. This is a perennial. The Minister summed up the goal of these reforms as making our health system “fairer and smarter”. A key element in making our system smarter has to be a wholesale shift towards a comprehensive, interoperable and self-managing digital infrastructure. The necessity to establish an entirely new IT system for our COVID vaccination programme is indicative of how far a key feature of our health infrastructure has fallen behind.

What is entirely new and can find no precedent in previous health reform initiatives is the establishment of a Maori Health Authority (MHA) that will have commissioning, oversight, planning and joint-decision making powers. How this works out may make or break these reforms and is the sort of area that may well draw partisan interest in future. There is a constituency that relies on and supports the public health system. At its base are those for whom a private market can never work – lower socio-economic groups, the low-income elderly, and those with catastrophic or long-term and/or disabling health conditions. Gaining increasing recognition as distinct groups within this constituency of those who rely on the public health system are been Maori and Pacifika.

The MHA builds on this insight and adds an equity lens to the system, in part informed by a Treaty of Waitangi imperative, a focus that has not had organizational expression to date. Thus, the MHA has to be a major enhancement to the equity features of the system. It will be interesting to see whether it can work to the advantage not just of Maori, but other elements of the coalition of those who are almost totally reliant on the public health system and whose electoral and social support maintains it.

And then there is the broad middle class; they may take out private insurance, but they know that in the end the public system is there in time of need and, anyway, is part of the ethos of New Zealand as an inclusive and caring society. How the MHA rubs along with these and other groups may be one of the key elements that will be crucial to the long-term political future of these health reforms.

Peter Davis

Elected member, Auckland District Health Board and

Emeritus Professor in Population Health and Social Science, University of Auckland.

Published on the Newsroom website, 22nd April 2021

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