Health and Disability System Review chair, Heather Simpson

Heather Simpson’s report on the health system released yesterday proposes a sweeping upheaval of the health bureaucracy.

Simpson’s proposals will be likely to leave the Covid-19 hero, Dr Ashley Bloomfield, with a much-reduced role in charge of a small policy Ministry.

Much of the Ministry of Health’s current work; overseeing the District Health Boards (DHBs), would be transferred to a new Crown entity, Health NZ, which would plan and fund both DHBs and ultimately, primary healthcare as well.

It is a proposal that sounds very similar to the Ministry of Transport/New Zealand Transport Agency split.

There the Ministry has 161 employees and the Agency over 1500.

Simpson is also proposing a Maori Health Agency which would also be a policy advice Ministry. Again, that function would be stripped out of Bloomfield’s current Ministry.

But she did not stop in Wellington.

Her report, publicly released yesterday after sitting in the Beehive for two months, also proposes that the number of District Health Boards be reduced to between eight and 12 and that their boards be appointed rather than elected.

The decision to scrap elected boards was greeted with apprehension by the Greens.

The party’s health spokesperson Julie Anne Genter said local democracy was a core value for the Greens.


“The proposed replacement of DHB elections with appointed boards must ensure communities can still have a say in health decisions that affect them if it goes ahead,” she said.

POLITIK was unable to get a formal reaction from NZ First to the proposals but much of what is proposed has already been talked about by other political parties (including NZ First); indeed National’s recent Health Discussion Document more or less endorsed the DHB rationalisation and ending of elected members.

The party’s health spokesperson, Michael Woodhouse, told POLITIK  last night that though the party had yet to adopt a formal position on Simpson’s report, he was not opposed to ending the election of DHB members provided the criteria for appointment was tight enough to ensure the mix of skill and local representation needed.

Health Minister David Clark said that though the board members would be appointed from Wellignton, they would need to to think locally.

“The report does say that one of the most important functions in the system is making sure that we have good local planning, that we actually are getting a conversation running with the community, that we’re pleading with the community for the provision of local services, and that the accountability for providing those services sits with the DHB, the population health outcomes for access to services,” he said.

The other testing political issue will be the reduction in the number of DHBs.

Simpson is not recommending merging Auckland’s three DHBs, all of which serve population bases of over 500,000 people.

Pressure might be expected to come on the 10 North Island DHBs south of Auckland; only three of which serve population bases of over 200,000.   

Not only will the DHB board members be appointed by the Minister but so too will the chair and board of the Health NZ agency.

POLITIK Health Minister David Clark

The whole change process will be overseen by a group of Ministers led by the Prime Minister, the Finance Minister and the State Services Minister with both Health Minister David Clark and Associate health Minister Peeni Henare part of the process.

However, Clark said yesterday that legislation to implement the changes would not be introduced until the next Government. It is likely that those appointments will become a lever second only to budget allocations to drive health policy.

The report has been written in a way that I think any incoming government would want to pick up on its recommendations,” Clark said.

“It’s essentially a three to five-year programme of change that’s been outlined.

“It has to be done through a thorough consultation with the sector.”

At the heart of the report is the question of access.

And Simpson has closely linked this to deprivation and ethnicity.

Health Outcomes - Simpson report
Life expectancy75.676.582.8
% of deaths potentially avoidable53.00%47.30%23.20%
Cardiovascular mortality/100,000200.8185.699.5
Cancer mortality/100,000200.9168.5113.9
% smokers33.5%20%11.7%
% obese47.5%65%30.7%

The report says: “To transform Hauora Māori from one of our country’s greatest health risks to one of our greatest achievements, the future health and disability system needs to look, act and work differently to make a positive difference in the lives of iwi, hapū and Māori whānau in Aotearoa New Zealand. “


The Maori Health Authority will head the move to address the statistics, but it will reverberate right through the health system.

Simpson argues that the driver for this should be the concept of “population health” which would focus on a proactive approach to promoting and protecting health “with an explicit focus on equity – understanding which groups are most impacted, recognising the commercial and socio-economic determinants of health that underpin inequities and designing and implementing comprehensive strategies to eliminate or ameliorate them.“

“This would require a determined and ambitious shift towards prevention and promotion of health and wellbeing with strengthened national capacity and capability.”

This concept reverberates right through the proposals for the various levels of the system.

The report explains that unlike Education or Social Development, a substantial part of health’s funding is fixed baseline funding; “meaning that there is no guarantee that spending on health will increase in coming years. Increases in health spending must be proposed and weighed against other spending options each year.”

“This does not deal effectively with the cost pressures the health and disability system continually faces. “

And so the report has proposed that Health be given guaranteed funding according to a formula which would take into account:

  • total population and changes in population demographics (e.g., age and ethnicity)
  • costs of wages
  • costs of products and services.

Health NZ would allocate funding to the respective DHBs.

There are other issues. It is still not clear that the Government will commit to the level of capital expenditure that will be required to bring buildings and infrastructure up to the levels proposed by last week’s asset management report.

And big funding changes are likely at the primary level with the current Primary Healthcare organisations phased out and their role taken over by the DHB directly contracting services itself.

That would mean that the primary services could be brought under the overall umbrella of health NZ which will set objectives, outcomes and funding for the DHBs.

Two things stand out about this report.

First, it is a careful document. Radical suggestions such as a stand-alone Maori health system have been rejected (albeit that the decision split the Committee).

And second, Simpson herself obviously wanted the final proposals to be politically sustainable across multiple governments.

She may have succeeded with that with no outright objections to the report emerging last night.

Indeed National’s Michael Woodhouse was critical of the delays in releasing the report and sceptical that the Government would act on it.

“This is a blatant attempt to kick the can down the road and avoid doing their job,” he said.

Any health reform is a challenge because of the web of interest groups within the sector. But if anyone could design a report that pre-empted those challenges, it would be Simpson. She has a background in health economics and was an advisor to Helen Clark when she was Health Minister and dealt with health when she was Clark’s Chief of Staff when she was Prime Minister.

 That depth of political; understanding is evident in this report.