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Home / New Zealand

Kathy Spencer: Lessons from an era of public service restructuring

By Kathy Spencer
NZ Herald·
3 Aug, 2023 05:00 PM5 mins to read

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What real difference has Te Whatu Ora made to the wards in our hospitals? Photo / George Novak, file

What real difference has Te Whatu Ora made to the wards in our hospitals? Photo / George Novak, file

Opinion by Kathy Spencer

Opinion

While fixing potholes is all well and good, the election promise I would like to hear, from both National and Labour, is that they will stop the continual restructuring of our public services.

According to research from Victoria University of Wellington, successive governments created or abolished agencies, or reorganised whole sectors, more than 160 times in the period spanning 2000-2017.

The most obvious more recent examples are the amalgamation of the polytechs into Te Pūkenga and the DHBs into Te Whatu Ora.

Last year’s health reform illustrates many of the pitfalls of extensive remodelling.

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First, there has been a tendency to blame the structure for poor service delivery or outcomes and to claim that major upheaval is the only way to solve existing problems.

When Andrew Little announced the 20 DHBs would be replaced with Te Whatu Ora, some anticipated better health outcomes for Māori. Others looked forward to improved mental health services, more funding for primary care, better pay for doctors and nurses, or more timely access to surgery.

Illustration / Rod Emmerson
Illustration / Rod Emmerson

Exactly how the new structure would deliver on any of these was never explained, and that left the door wide open for people to imagine the change would fix whichever problem they had a focus on.

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The alternative of delivering improvements through less drastic change wasn’t seriously considered.

A second lesson from the health reforms was that two groups of experts, set the same task, will almost certainly come up with different solutions.

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The initial review, led by Heather Simpson, proposed reducing the existing 20 DHBs to between eight and 12 DHBs within a period of five years. Health NZ would be created to lead health service delivery, and a Māori Health Authority would be created to provide advice and monitoring on Māori health outcomes.

However, when the reforms were handed off to a transition unit for “detailed design”, the unit recommended doing away with the DHBs altogether. Health NZ would take over their functions, in one fell swoop.

In my view, there’s no ideal solution: just as the old structure with the Ministry of Health and 20 DHBs had its issues, the new model also has flaws.

For example, there is a huge overlap in the functions of Te Whatu Ora, the Māori Health Authority and the Ministry of Health. When organisations have to “partner” and “co-design” on pretty much everything, it’s a recipe for blurred accountabilities, extra costs and indecision.

One year on, and the timeframes for delivering improvements seem to be retreating into the distance.

When Jack Tame interviewed Te Whatu Ora’s chief executive recently, he tried valiantly to draw out some sort of timeline for reducing excessive waits to see specialists or receive surgery. As at May this year, 85,000 people (35 per cent) had been waiting longer than the prescribed maximum periods.

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However, all Tame could get from Margie Apa was a commitment to “chip away” at the problem.

Asked when the IT systems would likely be brought together, Apa replied: “I can’t tell you that because we need to do the work on what it will take to go from what we have today … to unify it to one”.

Meanwhile, the disruptive effects of restructuring are felt immediately, including disengagement and lost momentum while staff are reorganised into new institutions, and a loss of expertise as some staff are let go or decide to walk.

For example, when Te Whatu Ora took over processes for collecting and reporting DHB data, some of the experts in the Ministry of Health were not transferred, and some left.

To make matters worse, Te Whatu Ora ignored expert advice and decided to change what would be measured and how.

Kathy Spencer.
Kathy Spencer.

As a result, emergency department waits were misreported, and the focus shifted from long waits to faulty data.

Finally, to convince the public restructures are necessary, problems with the old system are often exaggerated.

In the case of health, a picture was painted of 20 DHBs acting independently with minimal central direction. This is patently incorrect.

The Ministry of Health had always provided an “Operational Policy Framework” setting out what all DHBs were expected to deliver to their populations, and it created strategies to align efforts on Māori health, mental health, aged care and primary care, to name a few.

Since being established in 2001, the DHBs have co-operated in a variety of ways.

The 20 chief executives met monthly to work together on common issues and, for several years, an organisation called DHBNZ led projects on behalf of all of them.

For issues like pay negotiations with doctors or nurses, one of the DHB chief execs would lead the work on behalf of the others.

Clearly, these efforts weren’t always successful, as the current state of IT shows.

However, to suggest we had to wait for Te Whatu Ora to enable co-operation is nonsense. To suggest differences in DHB systems or capabilities are only now coming to light is disingenuous.

Before it embarks on another restructuring, our next government needs to be confident the years of disruption will be worth it, and that is a very high bar.

Kathy Spencer worked in the NZ health system under four different structures over 21 years, including as a deputy director-general in the Ministry of Health and a general manager for ACC.

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