Significant organisational reforms to the health system announced

Last year, the Health and Disability System Review published its recommendations for reform to the governance and planning of the health and disability system (see our previous alert on the report).  Minister for Health Andrew Little has now announced the reforms the government will be undertaking.

The changes to the organisational structure of the health system are significant, and are only the first stage of reforms to follow the Health and Disability System Review.

The key reforms constitute a complete re-organisation of the health system

The headlines are that the reforms will:

  • refocus the role of the Ministry of Health as stewarding the health system and providing advice to the Government on health strategy, policy and regulation;
  • abolish the 20 DHBs, around 30 Primary Health Organisations and a ‘complex web of contracts’;
  • establish Health New Zealand (Health NZ), a new Crown entity which will be responsible for running hospitals and commissioning primary and community health services (to replace the current role of the DHBs) and provide national planning;
  • create a new Māori Health Authority to support the Ministry’s policy and strategy to ensure the health system delivers improved and equitable health outcomes for Māori. It will commission care across New Zealand in partnership with Health NZ and directly fund and commission tailored kaupapa Māori and te ao Māori-grounded services;
  • establish a new Public Health Agency (to provide national leadership on public health policy, strategy and intelligence) within the Ministry of Health; and
  • consolidate a national public health service within Health NZ (which will include Public Health Units that are prepared to respond to threats to public health, like pandemics).

Image taken from Our health and disability system: Building a stronger health and disability system that delivers for all New Zealanders (White Paper) dated April 2021

The White Paper paints a fuller picture of the outcomes sought by the key reforms described above

The Department of the Prime Minister and Cabinet has already published a White Paper on the health system reform, which will guide the development of policy and legislation to implement the reforms.

The reforms will change how community-based care is provided:

  • Communities will have ‘locality networks’ of healthcare providers in the community (such as GPs, maternity carers and district nurses) which will be connected through an increased use of technology and closer connections between care providers.
  • There will also be structural changes to primary and community-based care – the key structural change noted in the White Paper is that GP services will no longer need to be funded through a Primary Health Organisation.
  • The Māori Health Authority will also be supported by strengthened Iwi-Māori Partnership Boards in each locality, which are intended to provide a voice for iwi and Māori.

Hospital and specialist services will be planned nationally and systematically, and managed through wider regional networks.  We expect to see funding of hospitals to be organised centrally and holistically, rather than decisions being made in isolation for each hospital (as under the current DHB model).

The White Paper does not address the role of private healthcare providers.  Private healthcare providers will not be directly affected by these changes, but may feel indirect effects arising from changes to funding and organisation.  The number of surgeries DHBs outsource to private healthcare providers increased by 50% from 2013/14 to 2017/18, and the Health and Disability Review recommended more efficient and collaborative planning with private healthcare providers going forward.

Next steps for health system reform include engagement on legislation and further reform announcements

The White Paper sets out that there are three major parts of the change programme to come:

  • further policy work and reform;
  • detailed, collaborative design; and
  • implementation and change.

The organisational reforms are expected to be phased in over three years. An interim Health NZ organisation will be established in mid-2021, and interim Māori Health Authority will be set up as a departmental agency within the Ministry of Health by the end of 2021. The Government has indicated that legislation implementing the reforms will be passed in mid-2022.

Engagement with the health sector and with consumers, whānau, and communities is expected to occur throughout the reforms, and it will be important for the health sector to ensure the reforms are fit for purpose.

The organisational reforms outlined below are only the first ‘phase’ of reforms expected.  The White Paper records that further announcements are coming, including on funding, workforce and digital health.  The Health and Disability Review also recommended changes to long term planning and funding, which we expect will follow the organisational reforms.  We also expect to see reform to investment and upgrades to health infrastructure, following last year’s National Asset Management Programme report which identified that significant work is needed to ensure health facilities and equipment are fit for purpose.

Image taken from Our health and disability system: Building a stronger health and disability system that delivers for all New Zealanders (Fact Sheet: Implementation Road Map)

Who can help