New Zealand health reforms: What the major overhaul means for Kiwis

It's the "first day of the future" but there is still "a hell of a lot more to do".

That's Health Minister Andrew Little's message as New Zealand's health system undergoes a seismic shift on Friday with the abolition of 20 District Health Boards (DHBs) in favour of a centralised national organisation.

More than two years on from the Health and Disability System Review, which found New Zealand's public health system was fragmented, under significant stress and not producing equitable outcomes for Kiwis, the Government has gone even further than what was recommended.

Instead of just reducing the number of DHBs, it's completely overhauling the system - so here's what you will want to know.

What are the new health organisations?

With the 20 DHBs disestablished, Health New Zealand (or Health NZ) will take over responsibility for the country's day-to-day health operations from the boards and the Ministry of Health. It will oversee services, while the ministry takes on a more strategic and policy-orientated role.

An interim Health NZ organisation has been running since 2021, but the recent passing of the Pae Ora (Health Futures) Bill means the entity will formally start operating from Friday - July 1.

The Government says a key purpose of abolishing the DHBs and having one organisation is so hospital and specialist services can be planned and delivered consistently across New Zealand.

That will hopefully mean an end to the so-called postcode lottery, which means Kiwis in different parts of the country face longer waiting times and different experiences with the system depending on where they live or what DHB they fall under. 

Primary and community-based services will be planned through four regional divisions of HealthNZ, which will connect with localised offices to ensure that specific communities are receiving the support that they need. 

In acknowledgement that Māori health outcomes need improving, the Government is also establishing the Māori Health Authority. It will be able to commission kaupapa Māori services in partnership with Health NZ and develop new policy that supports Māori health.

This means there is a body that will be tasked with identifying operations that aren't working for Māori and examine how this can be improved.

The authority will also work with iwi to ensure the health services fit Māori needs and also develop a stronger Māori workforce.

At Budget 2022, the Government announced a giant $11 billion was being allocated over four years to the overhaul, including to ensure services that were previously funded through the DHB system are maintained as well as to pay DHB deficits. 

"I am just really pleased to have got to this point," Little said on Thursday.

"There has been a hell of a lot of work that has gone into this. Today is kinda the first day of the future, but it is just the first day. There is a hell of a lot more to do. If we are really going to address some of the longstanding, chronic problems of our health system. 

"We will now have, I am confident, a health structure that will enable us to do that, to get consistency and coherence across our health system."

Health Minister Andrew Little.
Health Minister Andrew Little. Photo credit: Getty Images.

Will Kiwis notice any changes overnight?

The short answer is no. While the structure of the health system is changing and there have been significant moves behind the scenes over recent months in terms of management, unless you are working in the system, there won't be any clear short-term difference.

"Tomorrow, pretty much the changes will not be visible to the naked eye. It is about structure change, it is about management structures and where decisions will get made," Little said.

"Over time, however, [the public will notice changes], because we need that structure and that decision-making apparatus to change the way we are doing things, what we are doing and how we are doing it."

Fepulea'i Margie Apa, the chief executive of the interim Health New Zealand, echoed that.

"If people need care or help from health professionals, from 1 July, they should keep going to the places where they would usually get care, whether it's a GP or specialist appointment in hospital," she told Newshub. "Care and delivery will continue."

Over the coming months, Health NZ will work on new approaches to expand the health workforce and also implement national initiatives to "support catch up on specialist services and strengthen public health services".

"For more patients, this may mean we offer them to go to a provider outside their normal district or in a private hospital to get their specialist care sooner. 

"Providers will also experience more flexibility in funding and/or changes in regulations to allow them to grow more workforce and shift tasks to other professions (e.g. kaiawhina) so their scarce clinical skills can focus on those who need it most. This increases access for patients."

Apa explained that it's Health NZ's desire for Kiwis to have "easier access" to quality health care closer to their home regardless of where they live. 

For those working in the system, the legislation means their employment moves directly to HNZ.

"Similarly, all the provider contracts are being moved by legislation to HNZ. This means we will have continuity of employment and health services from 1 July. Over time services will change as we move to a more consistent health system, but initially the aim is a very smooth transition."

National's Dr Shane Reti opposes the changes.
National's Dr Shane Reti opposes the changes. Photo credit: Getty Images.

What is the Opposition saying?

Both National and ACT have long opposed these reforms and continued to fire shots at the proposals on Thursday.

Dr Shane Reti, National's health spokesperson, said the health system has "never been in a worse state", so it was the wrong time for such huge change. 

"Our hospitals are falling apart, doctors and nurses are burnt out, emergency department wait times have blown out, surgeries have been delayed and wait times to see specialists and have scans have increased. None of these are remedied by a bureaucratic restructure."

Little this week told reporters that while some hospitals are facing pressure due to worker shortages, the COVID-19 pandemic, and the return of the flu, the system "as a whole is managing". He told AM on Thursday that the situation is already "dissipating", something which frustrated burnout healthcare workers.

Meanwhile, ACT's health spokesperson Brooke van Velden said there's no evidence the "administrative reform" is "going to have any positive impact". 

"In short, these reforms do nothing to address the deficiencies in our health system that are clearer than ever right now. Our Government has forgotten about the outcomes that actually matter," she said.

“The creation of the Māori Health Authority is an exercise in co-governance that increases bureaucracy and separates New Zealanders based on who their grandparents were."

Little, however, believes the major overhaul is going to lead to better outcomes for Kiwis. 

"I am very confident that it will make a difference. It will make a difference having one principal decision-maker rather than 20 or more."