Andrew Little, a former leader of the NZ Labour Party, was the Minister for Health when Health NZ was formed in 2022, merging the country’s 20 DHBs to create a more joined-up health system. He resigned from politics in 2023.
The action was one thing. The rhetoric accompanying it, frankly, indulged the fantasy that funding isn’t the problem.
At the end of 2020, a review told the Labour Government the system was fragmented, lacked cohesion and delivered services and quality unevenly across the country. Of the 20 district health boards, all but one were running deficits, which were only getting bigger. Costs were forecast to rise because of our growing and ageing population.
The differences across the country were real. Cancer treatment was worse in the deep south than anywhere else. The so-called national travel allowance for patients who had to travel to a different city for treatment was applied differently by different DHBs, leaving many patients ripped off.
Waiting lists, by now being calculated accurately, were growing. Some hospitals got new buildings. Others in desperate need got nothing.
Former Health Minister Andrew Little. Photo / Mark Mitchell
The number of Ministry of Health staff whose job was to negotiate with DHBs just to get things done was in the hundreds. Crown observers were in place to help many boards under financial strain.
We couldn’t go on like this. In a country of five million people, it didn’t need to be this bad or this hard.
The paper I took to Cabinet as Health Minister in March 2021 set out the vision: “A simpler, more coherent and coordinated structure of organisations, which is clearly led and accountable for achieving national objectives” and “Health NZ should be a single Crown agent and have sub-national groupings that are internal divisions rather than separate entities. These divisions would hold both the regional commissioning and service delivery arms. Health NZ will hold public assets including hospitals and equipment and employ the public health workforce.”
We recognised the need for a more localised level of management, too. My paper said: “Within the Health NZ regional divisions, regional chief executives will be responsible for determining the best approach to commissioning, based on a ‘hub and spoke’ model.”
The legislation for the health reforms did not try to write up an organisational structure. It established Te Whatu Ora Health NZ, along with other organisations like the Māori Health Authority, set up the planning and accountability processes, and left boards to do what boards do. Make it work.
With significantly increased funding in Budget 2022 and clear accountability mechanisms in the legislation, the new structure was set to go on 1 July that year, just two years ago.
We had a talented first board. Rob Campbell, the first chair, brought incredible intellect and one of the strongest governance track records to the role (although he was implacably opposed to regional structures). But overt attacks by him on our political opponents was never a good idea, and that couldn’t last.
Naomi Ferguson, former Inland Revenue commissioner, had overseen the largest and most successful government IT project in a generation; Curtis Walker was a senior medic and head of the Medical Council; Vanessa Stoddard, who I first knew as a senior Air New Zealand executive, was a highly experienced director; Amy Adams had been a top performing National Cabinet minister; Karen Poutasi, a doctor and former director general of health; Jeff Lowe an accomplished innovative and entrepreneurial GP. This was a talented group.
Their task was huge. To take 29 organisations and a combined workforce of more than 80,000 to create a body offering the highest quality health care and the best possible support for primary care and other services.
The winter of 2022, just after the borders opened, saw hospital and primary care services under unprecedented pressure. Priority was given to managing good care and change processes were pushed out.
Even without the aftermath of Covid and grappling with the worldwide problem of workforce shortages, realising the vision was never going to happen in two years. Keeping the board focused is essential. Having three ministers in the last two years hasn’t helped that.
I have confidence in Lester Levy. He was an excellent source of advice to me when he was the Crown monitor at Canterbury health board. He is passionate about lifting health productivity and I back him to deliver on that. It will make some difference but that alone won’t be enough to deliver on the original vision.
Hospital services, primary care, aged care, mental health and other services are still under pressure. Demand for healthcare and changes to the way we deliver it will only intensify.
And so to the fantasy. This year’s Budget lifted funding for Te Whatu Ora by just 1.6%. Funding falls over the next two years. That funding will be further reduced to pay for the post-Budget top-up for Pharmac.
Maybe Shane Reti can bring some consistent oversight to the commissioner and a new board. But he will be in fantasyland if he thinks more realistic funding won’t be needed.
