Health Minister Andrew Little

Health Minister Andrew Little has set out the bottom lines for what is looking like the most far-reaching shakeup of the country’s health sector since the 1980s.

And POLITIK believes that the Government now intends to move “at pace” to fill in the detail and then implement the reforms.

Significant announcements can be expected in the lead-up to the Budget in May.

And though a substantial consultation process has been underway since the Health and Disability Review Transition Unit was established within the Department of Prime Minister and Cabinet last September, detailed consultation will follow the next announcement.

That will involve the always-difficult talk of persuading the various health sector groups to agree to what for many will be radical changes.

Health Minister Andrew Little, in what appears to have been a very carefully crafted speech yesterday, set out the principles guiding the implementation of the Review.

Central to the Review were two propositions; one that key groups in society, particularly Maori, Pasifika and the disabled, were disadvantaged by current health structures. The other that the District health Boards were inefficient in part because of duplication and funding shortfalls.

Ministry of Health figures for the financial performance of DHBs show that the combined deficit for the first six months of this financial year was $189 million, and this is after an additional $980 million allocated in last May’s Budget.

Little said the financial position of the DHBs was one reason the system was under stress now.

“And this situation is only going to worsen without reform,” he said.

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Infometrics, analysing last year’s Budget, said the DHBs would require an annual injection of an extra $600 million “to keep up with population growth, demographic changes as the aging population increases demands on the health system, wage inflation, and other cost inflation.”

The reforms are likely to see a comprehensive upheaval of not only the structure of the DHBs but also a rationalisation of the services they provide.

POLITIK understands the Transition Unit has accepted the Simpson-Roche review’s argument that DHBs need to be rationalised through mergers.

There are clues to this in Little’s speech.

“The Health and Disability System Review report said that the system has become complex and unnecessarily fragmented,” he said.

“Organisations have unclear or overlapping roles, responsibilities and boundaries.

“There is significant duplication of activity and variation that creates a post-code lottery when it comes to accessing services.”

Little said the reforms would aim to ensure everyone had access to high-quality emergency or specialist care when they needed it. 

“Services will be planned across the whole New Zealand population to ensure the best distribution of care and equitable access for people in different regions,” he said.

“Hospital and specialist services will work cohesively to share best practice, operating as part of a single system and not just in the interests of their organisation.”

The Simpson-Roche report proposed dropping the number of DHBs from 20 to between eight and 12.

National’s new health spokesperson, Shane Reti, has already indicated National will oppose this.

But the rationalisation of the DHBs and the services they provide is central to the structural reform of the system.

In her report, heather Simpson said that without structural and accountability changes, cultural change would not follow.

However, Little was silent yesterday on one of her core proposals that the Ministry of Health effectively be dismantled and become a policy advisory Ministry (like, say, the Ministry of Transport) while the DHBs would be co-ordinated and managed by a new entity, Health NZ.

With 1084 employees, the Ministry is a major bureaucratic force in the capital.

But though its Director-General, Dr Ashley Bloomfield, has become something of a national hero from his TV performances during the Covid pandemic, reports from both the Auditor General and from Simpson and Roche (on border testing) have been highly critical of it.

However, dismantling the Ministry is going to be a big ask.

But the most contentious part of the proposals will be over Maori health.

Though Simpson proposed a separate Maori Health Authority, she suggested it have only limited power, mainly of a research and advisory role.

That did not go down well with Maori, and both Simpson and her team were subject to considerable criticism (and abuse) from some Maori.

However, the Waitangi Tribunal has recommended that an investigation be carried out into a Maori Health Authority, focusing on primary care.

The Authority would commission and oversee Maori primary care providers.

But the Tribunal head evidence suggesting a model based on an authority set up for indigenous people in Alaska called NUKA could work in New Zealand.

Southcentral Foundation, which runs NUKA,  provides a wide range of behavioural, dental, medical and community services.

These services include primary care, both in outpatient and home settings; dentistry; outpatient behavioural health; residential behavioural health; traditional healing; complementary medicine; health education and more.

Little said making changes to tackle the persistent inequity in health outcomes in New Zealand as a “first and foremost” priority.

“Life expectancy at birth for Māori and Pacific peoples is more than five years below the New Zealand average,” he said.

“Around half of Māori and Pacific deaths are potentially avoidable, compared to under a quarter of those for other New Zealanders.

“We can change these results if we re-think how Māori and Pacific communities get access to healthcare and think about how healthcare services are delivered.

“This is in part about how we support kaupapa Māori services.

“But it is also about how the rest of the health system engages with these communities.”

Speaking at Waitangi earlier this year, Prime Minister Jacinda Ardern acknowledged that the Government was discussing a broader Maori health Authority than Simpson had proposed.

“We have heard the calls for change,” she said.

In essence, Little’s speech yesterday confirmed that the Government is committed to the Simpson-Roche report, but we must now wait to see what will happen to the Ministry and what the shape of the Maori Health Authority will be.