Health and Disability Review: Māori health outcomes a 'failure', too many DHBs, centralised system proposed

The Government is committing to health sector reform after a review proposed a more centralised system with fewer District Health Boards (DHBs), and board members appointed by the Minister of Health rather than through elections.

The review said the fact that Māori health outcomes are "significantly worse" than those of other New Zealanders "represents a failure of the health and disability system" and does not reflect Treaty of Waitangi commitments. 

It proposes the creation of an independent Māori Health Authority that would be expected to monitor and report on health outcomes for Māori. It would identify the issues needing to be addressed and develop solutions.

Review's main points:

  • Create centralised Crown entity called Health NZ to review financial performance
  • Reduce the number of DHBs from 20 to 8-12 within five years
  • Make DHBs more accountable to the entire population
  • Health Minister should appoint DHB board members
  • Create a Māori Health Authority 

"To achieve this there will need to be significant new investment," the report says. "Funding for Māori communities needs to better reflect need and be protected from being diverted to broader treatment programmes."

Led by Heather Simpson and an expert panel of advisors, the Health and Disability System Review has recommended the creation of a new centralised Crown entity, called Health NZ, that would focus on operational delivery of services and financial performance. 

The new Crown entity would be accountable to the Minister of Health for leadership of health service delivery, both clinical and financial.

The board members would be chosen against a set of criteria ranging from financial and governance experience through to tikanga Māori and specific health and disability sector knowledge. 

The review has proposed reducing the number DHBs from the current 20 down to 8-12 within five years, and moving to a full appointed board by the Minister of Health. 

There is also a need to change the culture at an organisational level, and the review is suggesting more "formal accountabilities" for DHBs. 

DHBs are currently only accountable for what happens in their own district, and the review says that should be expanded so that DHBs must consider how their planning and delivery will impact the overall population. 

The review also recommends changing the focus of the health system to keeping New Zealanders healthy rather than "simply treating illness". It says the structure, funding systems and accountability in place have not allowed this to happen. 

The review also found that disabled people have not been served well by the existing health system and that their health outcomes are worse. It says the way the disability support system operates is complex and confusing.

How will the Government react?

Health Minister David Clark said Cabinet has accepted the case for health sector reform, particularly the recommendations to reduce fragmentation, strengthen leadership and accountability, and improve equity for access and outcomes for all Kiwis. 

He said decisions on individual recommendations will be taken to Cabinet over the coming months and into the next term of Parliament.

Prime Minister Jacinda Ardern will lead a group of ministers that will drive changes to the health system, and that group will include Finance Minister, Health Minister and Associate Health Minister Peeni Henare.

"Make no mistake, reforming our health and disability system is a massive undertaking, and will not happen overnight. Meaningful change and improvement will take concerted effort over many years," Dr Clark said. 

He said he will be appointing a Ministerial Committee to provide ongoing expert advice. An implementation team will also be set up to lead the detailed policy and design work. 

The Green Party welcomed the review's findings but is raising concerns about the proposal to replace DHB elections with appointed boards. 

Green health spokesperson Julie Anne Genter said voter turnout for DHB elections is "notoriously low" and said the Greens agree that the current system could be improved. 

But she said it is "vital" that "local voices are heard and that health services match the different needs of different communities". 

The first part of the Health and Disability System Review released in August 2019 found that New Zealand's health and disability system was "complicated and very fragmented", with "leadership lacking at all levels". 

It said Māori have "not been served well by the system", while rural communities were facing "particular challenges and need solutions designed specifically for them".