Milestones could be around consumer satisfaction, health results for groups of people with health outcomes below the general population, and other areas.
The plan would also create four new pools of funding, with DHBs needing to submit plans for their share of a foundation pool of funding.
A "social investment pool" could receive funding from other areas such as education and justice that were likely to benefit from approved programmes such as rehabilitation for beneficiaries and mental health and addiction services.
Dr Coleman said the documents contained "some interesting ideas for discussion", but those were a long way from being policy.
"We do have to make sure that we are providing the services that communities need, and we have funding arrangements that support that.
"I think what we do need to have is more transparency around the value that we get out of our health spending, we also need to make sure that as we shift more services to the community that we have a way of sustainably funding that. So I am open to a debate and discussion around ideas."
Dr Coleman said many people believed the current population-based funding formula was flawed.
"It's the formula we've used since the early 2000s, every district health board operates under that. No funding formula is ideal, but I am open to a discussion to whether there is a better way to do it in the longer term."
Labour health spokeswoman Annette King said the documents were worrying.
"I think you are seeing a quick and dirty consultation lead by the Director General of Health, who is not a third-party, but the key public servant in health, to rewrite the health strategy, bringing back what it seems to me the old ideas, failed ideas from the 1990s."
DHBs needed certainty around funding in order to provide quality care to New Zealanders, Ms King said, and contestable funding would destroy that.
"A strong health sector is one that is collaborative, co-operative and works together. This review turns that ideal on its head. It allows for manipulation and string-pulling and will only lead to more fragmentation and disharmony."
Another proposal in the documents is to introduce a maximum amount people on low incomes have to pay in a year for primary health care and pharmaceuticals and to "allow practices to increase fees paid by better off people".
Ms King said this would benefit many people, but would depend on who was considered to be "better off".
"If the community services card is used as a criteria, a wealthy person would be someone earning a dollar more than the cut-off."
Other Ministry of Health documents released yesterday by Labour proposed taking the control of DHBs away from elected representatives.
Dr Coleman today again poured cold water on that proposal.
"I can guarantee there won't be wholesale changes, I can't see that any change will occur...I think democracy is really important."
