Bombshell plan for reform has Ryall squirming

The panel's recommendations appear to conflict with National's election pledge not to restructure the public health system. Photo / Richard Robinson

Health Minister Tony Ryall is distancing himself from a controversial recommendation that would in effect resurrect a part of National's 1990s health system.

He is testing public reaction before commenting on the proposal, which could be interpreted as breaching National's election promise "not to carry out another round of restructuring of the public health system".

But the committee that made the recommendation, headed by former Treasury Secretary Murray Horn, has sidestepped this potential problem by phrasing its political bombshell as "a significant rearrangement of responsibilities at the centre".

Mr Ryall did not express a view when asked last night if it would be a restructuring. He instead said the committee would argue it "is not a round of restructuring" - district health boards would remain and some roles were being reallocated.

"The Government isn't making the case for or against the recommendations in this report. We're going to consider their proposals over the next couple of months. We've got it out there for public feedback."

The committee recommends setting up a National Health Board. It would resemble the Health Funding Authority scrapped by Labour in 2000 when it started shifting the planning and funding of most taxpayer-funded health services to 21 DHBs and some to the Ministry of Health.

Under Dr Horn's scheme, the new board would take on planning and funding of costly and highly specialised services like liver transplants, cardiac surgery and major burns - and possibly also maternity services, elective surgery and the national cervical and breast screening programmes. Or the screening programmes could be regionalised to DHBs.

The national board would be responsible for "capacity" planning for new hospital facilities, health IT and workforce training; and it would monitor DHB performance.

Another new national agency, initially within the board, would take over DHB payroll, finance and purchasing roles, distribute patient subsidies to GPs and pharmacists and incorporate the ministry's health statistics unit.

The ministry, stripped of its role of planning and funding programmes that consume a fifth of Vote Health, would be confined to its "core" policy advice and regulatory roles. It would retain Medsafe and the National Radiation Laboratory and would monitor the new board.

DHBs would be forced into greater regional collaboration. Small primary health organisations would in effect be forced into amalgamations. PHOs deemed not to be measuring up would face being scrapped within three years.

The committee recommends cutting the number of committees that advise the ministry to 54, from 157.

The eight member Horn committee - whose other members include former GP leader Dr Tom Marshall, former Auckland DHB member Dr Virginia Hope and ministry Director-General Stephen McKernan - says the "rearrangement" would reduce the number of health bureaucrats.

Mr Ryall said the Government would not adopt any of the report's 170 recommendations if they increased bureaucracy or did not improve services to patients.

The senior doctors' union's executive director, Ian Powell, said adopting the report would break election promises by increasing bureaucracy and imposing "major restructuring".

"In part, it is a return to the 1990s by recreating in a different guise the Health Funding Authority. New Zealand then had two central health bureaucracies which in effect were fiefdoms wastefully competing against each other."

Because the National Health Board would be at arm's length from the Government, the risk of its privatisation was increased, Mr Powell said.

Labour's health spokeswoman Ruth Dyson said gutting the ministry and creating the new board "will do nothing but create a new level of bureaucracy".