The Health Minister, David Clark, has called in Heather Simpson to do a ground-up review of the whole health system.

This is likely to the most fundamental shakeup the whole health system has had since Simon Upton led National’s health reforms in the mid-90s.

Simpson, known as H2, has long been the key aide to Helen Clark and was Chief of Staff while she was Prime Minister and fulfilled a similar role when she ran the United Nations Development Programme.

But her background is as an economist.

However, Clark told POLITIK last night that Simpson would be joined by an expert panel who he was yet to name.

Though ACT leader David Seymour claimed the appointment of Simpson made the review politically partisan, few who know Simpson would doubt her ability to deliver a professional report.

National’s health spokesperson, Michael Woodhouse, notably, did not challenge her appointment.

The draft terms of reference for the review say that it will “ identify changes that could improve the performance, structure, and fairness of the sector.

“The overall purpose of the review is to provide recommendations to the Government for an equitable, sustainable public health service that delivers the healthcare that New Zealanders expect and deserve.

“In particular, the review should examine the impact of demographic and inflationary pressures on the health service and the resources required, as a result of those pressures, to deliver services into the future. “


Clark told POLITIK that the chance to conduct the review was one of the main reasons he put his hand up for health as a portfolio.

“It is exciting from my perspective,” he said.

“We’ve had the same system in place since the start of the century and as I moved around in Opposition I got a pretty consistent message from clinicians and from people who interact with the sector that there is a real appetite for change; for doing things a bit differently to maximise the not insubstantial resources that go into the health sector.

“As a conviction politician who wants to make some positive change, this strikes me as a real opportunity to make sure that we prepare the health system for the challenges ahead that we have got with a growing and ageing population.

“And also with an increasing burden of chronic conditions from cancer to diabetes.”

He also wants to see an increasing focus on primary care and prevention.

Clark says the review is “deliberately broad’ and he doesn’t want it rushed.

“I expect it to be a robust review and I expect it to be broad, and I am ready for challenging recommendations if that is what it comes up with.”

Clark doesn’t expect any major changes to the system before the next election, but in the meantime, there are some urgent problems.

Though the sector got a boost in capital expenditure from the budget, there are questions about the management abilities of the District Health Boards which were highlighted last week in a letter sent by the Auditor General to all boards.

Clark is proposing that the Ministry of Health become more active in its management of the boards.

“It hasn’t been doing as well as it could have been in terms of monitoring and managing the sector from the centre, so I think there is room to move there.

“I am going to have more active management in terms of DHBs that under the current system aren’t utilising their assets as well as they could be.

“We will have people willing and able to go out from the centre to work alongside those DHBs that are struggling to make sure they are making the most of the resources they have got.

“There are interventions we can make now to make things work better.”

Much of Clark’s current focus is on asset management.

This was also highlighted in the Auditor General’s letter which pointed out that DHBs collectively owned $6 billion of assets.

Despite a damning report from the Auditor General in 2016 over the way the assets were managed, the letter said the Auditor General’s office had checked on whether the recommendations it made in 2016 had been actioned and it found that found that there had been little progress.

The letter said: “We found that, in general, asset management in DHBs was not as mature as we would expect from organisations of this scale and with this level of reliance on their assets to continue to deliver essential services.

“This raised doubts about how well positioned DHBs are to support future service delivery.

“DHBs appeared to focus more on short-term results and less on how they ensure their ongoing capability to deliver results.”

Clark has asked for a national asset plan for the health sector.

But it is clear he wants Simpson’s review to look at not only how assets are managed but how they are deployed.

“The national health asset management plan will have severe implications going forward because it will be really clear about the priority of which assets we have got to manage and how and over what time frames.

“This review will take all of those things into account, but it is designed to look into the future over the next 30 years rather than the next three years.”

That will mean it may look at whether some hospital services can be rationalised in the way that Starship in Auckland now serves as a national specialist children’s’ hospital.

There has been some frustration among some of his colleagues with Clark’s role as Health Minister in that not a lot seemed to be happening.

But it is now clear that he wants radical and substantial reform and that he is not going to rush into ad-hoc solutions to what appears to be an ongoing series of crises in the health sector.

Labour made a lot of the failures of the health system in its election campaign. Clark’s colleagues will be expecting a lot from Simpson’s review.