District Health Boards need thorough examination

District Health Boards need thorough examination
Peter Dunne

Wellington, July 12, 2019

What are we going to do about District Health Boards?

News this week that the Government is looking at a further bail-out of cash-strapped Boards to help reduce their deficits has raised afresh questions about the sustainability of the current model. At a time when the pressure on financial resources is as taut as ever, it seems simply absurd that a substantial amount of significant additional public health expenditure has to be directed towards reducing historic budget deficits.

Therefore, the question must surely be asked whether District Health Boards still provide the appropriate structure to deliver the public health services we expect today.

How the Boards began

The District Health Boards were a creation of the Labour-led Government of the early 2000s, to replace the appointed Health Funding Authority and the Regional Health Authorities of the National Government of the 1990s, which, in turn, had replaced the elected Area Health Boards of the 1980s Labour Government, that had replaced the earlier Hospital Boards.

Two strong arguments lay behind the establishment of District Health Boards.

First, was to restore local democracy, lost in the 1990s reforms, by having a mix of elected appointed Board members; and second, was the call to settle things down after the tumultuous reforms of the 1980s and 1990s.

The latter reason, in particular, resonated strongly with subsequent National- and Labour-led Governments, who have shown themselves quite unwilling to indulge in too radical another round of health sector restructuring.

Laudable and understandable at that may be, it is time to ask, almost 20 years on, whether the current structure is still fit for purpose.

Aside from the financial issues, other issues have emerged to suggest the current model is too rigid to meet the demands of a modern public health system. For example, one of the perceived strengths of the current system when it was introduced in the early 2000s was its autonomy.

No political interference

Under the legislation, Boards were to be free from political interference, and make decisions in the local interest, with their autonomy guaranteed. However, all this has done has been to render the Minister of Health essentially impotent when it comes to getting Boards to implement Government policy.

I discovered when Associate Minister of Health that the Minister has no specific authority to direct District Health Boards to do anything. The annual letter of expectation sent by the Minister to each Board is just that – a sort of wish list that seeks to cajole District Health Boards to implement Government policy, rather than a specific set of directives about what services Boards will deliver in return for the Government funding provided. It is the Boards themselves, not the Government, that makes the final decision on what the priorities will be for the next year. 

Ridiculous outcome

Whether this was an intended outcome or not is a moot point, but the way it has turned out is clearly ridiculous. It manifests itself in many ways.

For example, one of the reasons why it is so difficult to get uniform data on specific conditions and issues is because each Board collects what data it wants, the way it wants.

It also explains why, although we nominally have a uniform national public health system, there are great regional variations in both the quality and form of the service delivered. Now, of course, a one-size-fits-all approach is not appropriate in every circumstance and there does need to be sufficient flexibility to tailor services to best meet the socio-economic circumstances and cultural requirements of the differing parts of New Zealand, but this should not be the excuse it has been allowed to become for the variability in the delivery of core services (maternity care in Southland for example) that we have become used to seeing.

Duplicity of management

And then there are the administrative duplications of running 20 different District Health Board systems, and the lack of economies of scale that can cause, all of which the taxpayer pays for. Both the previous Government and, to a lesser extent, the current one, have recognised the fallacy of this approach and have been encouraging Boards to combine where possible the provision of “back office” functions which is a small step in the right direction. 

But it is too timid, and both Governments have been utterly reluctant to consider wider rationalisations and amalgamations because of the local representation factor. So, the likelihood of more significant reform is pretty low. Bailing-out Boards for their deficits and gently admonishing them from time to time seems the far more preferable easy way out. Whether that assures the best service for local patients is  a completely separate question.

Stalemate situations

The hybrid nature of the Boards’ make-up (half the members are directly elected, and the other half and the Chair appointed by the Minister) usually means the Boards end up stalemated, with real power still residing in often conservative and entrenched medical and administrative hierarchies. All that ensures that the status quo, coupled with a huge dose of historic parochialism prevails.

Modern public health services require a nimbleness of approach and flexibility of design that the current structures will increasingly struggle to provide. It is time to look at new models where the focus is on providing the best service, in the fastest time, in the most cost-effective manner and in the place of best convenience for the patient. Those are challenges the current District Health Board system will be increasingly unlikely to meet.

Peter Dunne was a Minister of the Crown under the Labour and National-led Coalition Governments between November 1999 and September 2017. He founded the UnitedFuture Party but disbanded it upon retirement from Parliament. He lives in Wellington.

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