Health and Disability System Review chair, Heather Simpson

Speculation is mounting that the Government is planning a radical overhaul of District Health Boards, which is likely to see big changes in how hospital care is managed and run.

As part of that the DHBs would transfer many of their roles to a new centralised Health Agency.

Health Minister Andrew Little would not confirm the details yesterday but said he planned to make an announcement before the end of the month.

Two well-placed sources have told POLITIK that a Cabinet paper outlining the changes went through the Cabinet Committee process last week.

The paper is the Minister’s response to the  Health and Disability System Review chaired by Heather Simpson and published last year.

Little simply re-iterated to POLITIK  that the Review had proposed that the number of DHBs be reduced to between eight and 12.

He didn’t say what the role of the DHJBs would be and how they would be set up.

But from hints he has been giving and from well placed sources it is becoming clear that they are to have their powers vastly reduced and much of their management role transferred to a central National Health Agency.

One source has suggested to POLITIK that the Agency will operate through four “sub hubs”, but that cannot be confirmed.

The Cabinet Paper apparently dealt with the establishment of the  Agency, which would oversee the DHBs.


One source said the whole point to having a national oversight agency was so that the current glaring inequities in the sector could be reduced.

The aim was to bring an end to what is being called “postcode health”, where waiting times and quality of treatment varied widely from DHB to DHB.

At a meeting with health sector stakeholders on March 24, Little was quite specific.

He listed five areas the reforms would target, and “equity” was at the top of the list.

“So everyone can achieve the same outcomes and have the same access to services and support, regardless of who they are or where they live,” he said.

What he said echoed Simpson’s report.

“Efficient and effective hospital and specialist care needs to be available to all New Zealanders regardless of postcode,” she said.

“Given the constraints of resources and expertise inherent in catering to a population of only 5 million people, the system will need to get better at delivering services in ways that best use all the skills of the workforce and new technologies as they become available.”

Simpson proposed that the New Zealand Health Agency would develop “a more streamlined prioritisation process”, which would come from a New Zealand Health Plan.

DHBs would operate under this, and regional groupings of DHBs would also join together to share facilities and staff to meet the objectives within the plan.

In his speech, Little said the postcode health lottery was well documented.

“It is the consequence of a system that is too disjointed and not sufficiently focused on the population as a whole,” he said.

“In the future, the health and disability system should be centred more around what people need and want from their health services. 

“The public does not have a consistent say in the operation of the system or often have little choice about how they access services.

“Iwi and Māori communities are frequently consulted, but often in an advisory rather than decision-making capacity.”

His speech contained a heavy hint that the inbuilt localism of the DHBs needed to come to an end.

“Split and fragmented responsibilities for everything from IT to human resources make it difficult to work across the system, share data and analytics, and identify and spread best practice,” he said. 

It is not yet clear precisely what will happen to the DHBs — but Simpson has proposed that they be reduced top between eight and 12 and that they no longer contain elected members.

National suggested in its health policy discussion document last year that it too questioned the role of elected members and even the overall efficiency of the DHBs.

But since Shane Reti became health spokesperson and deputy leader, and in January, he said reducing the number of DHBs would take away the voice of patients in small towns and regions.

It would seem likely that National is preparing to oppose Little’s moves to implement the Simpson report.

But behind the scenes, a substantial preparation programme has been going on from within the Department of Prime Minister and Cabinet headed by former Director-General of Health and DHB CEO Stephen McKernan.

Outside consultants, including EY and Deloitte, have also been involved.

Beyond what is effectively a diminishing of the role of the DHBs, there are also substantial workforce issues like the proposed downsizing of the Ministry of Health and its transformation into a small policy advisory Ministry.

Simpson and another member of her review team, Sir Brian Roche, have been critical of the role of the Ministry in a review of Covid-19 contact tracing they conducted last year.

But none of the reform is likely to happen overnight.

Little, in his speech, implied that the next phase would involve a period of consultation with the sector.

“The immediate need after Cabinet’s decisions will be engagement about how we get the details right,” he said.

.But what is clear is that the overall direction of the sector from now on will be a much more central direction in a bid to drive efficiencies and also to end the lottery which healthcare has become, where what you get depends largely on where you live.