Heather Roy

7 December 2017

Sometimes I agree with Mike Hosking and sometimes I don’t. Today I do – I agree with his questioning of why we need so many District Health Boards (DHBs) for a country of four and a half million people. In his NZ Herald article  he says he is in the habit of asking those involved in the public health sector “Do you broadly think the idea of having 20 DHBs in a country this size is a good one?”

All but one, he says, seem to think we have too many – the one being the new Minister of Health David Clark. The Minister talks about elected boards representing communities and their specific needs and interests – keeping the structure as it is it seems.

My view for many years has been that we have too many DHBs and the election process is both costly and farcical. Each board has 11 members – 7 elected and 4 Ministerial appointees (to fill skill gaps not covered by the elected members). That’s meeting fees and expenses for 220 people and those costs add up to a lot of hip replacements, grommets and cardiac stents that boards could otherwise be doing.

A recent paper by Amy Downs, visiting expert hosted by Treasury this year and the Ian Axford (New Zealand) Fellow in Public Policy, confirms the view that we have too many DHBs. They lead to duplication of services and costs and there is too much activity happening in isolation. Her conclusion was that we should have no more than six DHBs.

During my time in parliament and as Health Spokesman for ACT I frequently asked why we needed so many DHBs. I asked Annette King, then Minister of Health, often. Sometimes, to mix things up a bit, I would ask Helen Clark. I remember once asking Ms Clark in parliament what DHBs were allowed to do without the permission of the Ministry of Health. The answer is very little. It begs the question of why we have DHBs at all.

So, how did we get to 20 Boards? The story goes back to the Social Security Act 1938. Between 1938 and 1983 the New Zealand health system developed as a dual system of public and private provision. Then from 1983 Area Health Boards (AHBs) were established – 14 of them, funded using a population-based formula. In 1993 four Regional Health Authorities (RHAs) were established with the aim of separating the funding and provision of health services. The 14 Area Health Boards were reconfigured into 23 Crown Health Enterprises (CHEs). These CHEs were structured as for-profit organisations and subject to ordinary company law. Public health services were unbundled and a separate public health purchasing agency, the Public Health Commission, was established under the Health and Disability Services Act 1993.

After the first MMP election in 1996 the National-New Zealand First Coalition Government reformed the structure of the health system. In 1998 the four RHAs were combined into one national purchasing agency, the Health Funding Authority (HFA) under the Health and Disability Services amendment Act 1998. The 23 CHEs were reconfigured into 24 not-for-profit Crown-owned companies and renamed Hospital and Health Services (HHSs).

With a change in government the Labour-Alliance Coalition initiated another health system reform – the New Zealand Public Health and Disability Act 2000. In 2001, 21 District Health Boards (DHBs) were formed. Primary Health Organisation (PHOs) were developed in 2002 to manage primary care and the structure under which General Practice operated was changed from a private fee for service model to a population based funding model. The 21 Boards became 20 when Otago and Southland merged in 2010.

But in 2017, with a growing number of experts, commentators and even a few DHB members all advocating for fewer DHBs, what is likely to happen? Will Health Minister David Clark prove himself to be a reformer or will he stay with the status quo? He spoke bravely of change from the safety of opposition, and this week announced a Ministerial Advisory Group on the health system. The make-up of this group takes me straight back to when I was elected in 2002 so I’m not holding my breath for innovative change that will revolutionise the New Zealand public health service. Structural change would be a good place to start.