health & science

Review calls for ‘transformational shift’ in health system

The long-awaited independent review of the health and disability sector calls for two new health agencies to be created in order to oversee a system with far fewer District Health Boards, Marc Daalder reports

A major review of the health and disability system has called for significant restructuring of the sector.

The Health and Disability System Review, commissioned by Health Minister David Clark in May 2018, says the number of District Health Boards (DHBs) should be reduced from 20 to between eight and 12 over the next five years and the number of regional entities to two or three over the same period.

Two new agencies would be created to oversee the new system alongside the Ministry of Health: Health NZ, a crown entity that would lead delivery of services from a clinical and financial perspective and the Māori Health Authority, which would hold the system accountable for its performance for Māori and possibly coordinate the provision of services for Māori.

An interim report, released in September, found the health system was a "confusing monolith". The final version of the report now presents recommendations to address those issues.

Overall, the review calls for a more centralised health system, with clear hierarchies lending themselves to more efficient work. Notably absent, however, is the single public health agency called for by epidemiologists like Michael Baker, both prior to and in the aftermath of the Covid-19 pandemic.

Heather Simpson, the review's chair and the chief of staff to former Prime Minister Helen Clark, said that the pandemic "only reinforces the Review’s conclusions".

"To meet the challenges of the future our population health focus has to be stronger, our preparedness for emergencies greater, and our system has to be much better integrated with clear lines of accountability and decision rights," she said.

In a statement accompanying the release of the report, David Clark said the Government had "accepted the case for reform, and the direction of travel outlined in the Review, specifically changes that will reduce fragmentation, strengthen leadership and accountability and improve equity of access and outcomes for all New Zealanders".

Although Clark did not commit to shepherding through any specific alterations, he was effusive about the idea to merge DHBs and indicated support for the Health NZ and Māori Health Authority agencies. He said individual recommendations would be taken to Cabinet both before and after September's election but changes would only begin implementation after the election.

Bottom-up approach

The review imagines a total overhaul of the health system: restructuring the sector; changing the culture; and making major changes to address inequities for Māori, Pasifika, Asian and disabled people. This overhaul must be completed in concert in order to be effective, the review states.

"Very few of the Review's recommendations are stand alone. The lesson from past reviews and attempts to change the health and disability system is that it can not be done piecemeal," the report said.

Wide swathes of New Zealand's population are disadvantaged by the current health system and the review says a bottom-up approach would most effectively redress these issues.

"Improvements in the way primary and community (Tier 1) services are organised [have] the biggest potential to improve the health outcomes of those currently disadvantaged," the review states.

Part of this will involve ringfencing funding for Tier 1 services, which can otherwise be diverted to other projects by DHBs. Tier 1 refers to just about any service that takes place in community centres, schools, marae and homes, including mental health services, GP services, maternity services, home care and support for disabled people and community pharmacies. All disability care would be subsumed under the Tier 1 services label.

While some Tier 1 services are contracted and enacted nationally, the review recommends placing DHBs in charge of all Tier 1 operations within their district, split into localities of between 20,000 and 100,000 people. By basing the Tier 1 contracting on smaller localities, better personalised results for each population could be achieved, it says.

"DHBs should have the flexibility to commission Tier 1 service delivery models that reflect their population’s aspirations and needs," the review says.

The new approach would also focus on prevention-first and target areas with the highest levels of need. This would mean more outreach and more provision of services in homes, schools and marae, rather than in hospitals and other health facilities.

Budgeting for Tier 1 services, until now based on historic use of primary care, would instead be calculated based on the age, ethnicity and socioeconomic status of the given populations. Historic primary care usage is seen as a misleading measure, as people might not use primary care services due to economic deprivation but still require them.

System restructuring

Alongside the overhaul of community-level services, the review recommends restructuring the higher echelons of the health system. It envisages "a cohesive, integrated system that works in a collaborative, collective, and cooperative way".

The two key recommendations in this territory are the reduction in the number of DHBs and the creation of a new agency, Health NZ, to oversee the remnants of the fragmented DHB system.

Health NZ "would be responsible for leading health and disability services delivery throughout New Zealand. It would be accountable to the Minister of Health for the overall performance of the health and disability system delivery and its impacts on improving health outcomes and equity".

This means implementing operational policy for the entire health system at a national level and directing DHBs to follow-through when required. IT will also have oversight of the financial performance of the sector in an attempt to reduce the cost blowouts seen from DHBs in recent years. The Health NZ board would be made up of eight members and a chair, split evenly between Crown and Māori members and drawn from DHB boards throughout the country.

This chart from the review purports to explain the structure of the new health system it envisages.

Health NZ would also be responsible for developing a long-term investment plan for health facilities, major equipment purchases and upgrades and the adoption of new, large-scale digital technologies.

The review notes "the design and construction of the hospital buildings that the health system is currently undertaking, and planning for the next 10 years, will be the largest and most complicated vertical construction programme that New Zealand has ever undertaken, yet the systems for planning, designing and constructing this programme is piecemeal at best".

A pipeline for significant investments would help prioritise implementing important projects. DHBs would also be required to have a "rolling capital plan based on a prioritised, robust pipeline that will deliver the medium-term  and longer-term service requirements in their area".

Alongside the new central agency, DHBs themselves would be slimmed down. This involves cutting the number of DHBs from 20 to between eight and 12 within five years of Health NZ's establishment. With the less fragmented system, more regional collaboration would also be required, the review says.

"DHBs replicate processes and analysis. ‘Doing it once’ and sharing knowledge would be much more cost-effective. The health and disability system needs to support DHBs to share their knowledge and expertise, and to collaborate with each other."

Regional entities - which would fall from four to two or three, in line with the reduction in DHBs - would collaborate with their constituent DHBs to create Regional Strategic Plans at least every five years.

DHB board members are not currently accountable for their contribution to and impact on the health system overall - only for the performance of the system within their district. The review recommends changing this to put the onus on DHBs for a more cohesive and collaborative approach.

The review also recommends ditching DHB elections in favour of Minister-appointed members.

"DHB elections are not the best way to ensure boards have the capability to effectively govern. A competency-based approach to identify and recruit board members should be introduced with robust processes to support the Minister appoint board members," the review says.

Māori health overhaul

The review also pays special attention to Māori experiences of the health system and how to improve them.

The chief recommendation for this is the creation of a Māori Health Authority, which would "not only be the principal advisor on all hauora Māori issues, but also [...] lead the development of a strengthened Māori workforce and the growth of a wider range of kaupapa Māori services around the country".

This would involve advising the Health Minister on Māori health policy; monitoring the performance of the health sector for Māori; collaborating with Health NZ on Māori health initiatives; and investing in greater recruitment of Māori into the health workforce. It would also take on the functions of the Māori Health Directorate which currently sits inside the Ministry of Health.

The review declines to specify whether the Māori Health Authority would have direct control over the operation of health services for Māori, as members of the expert panel couldn't agree on the issue.

"There was no consensus on the extent to which the Māori Health Authority should control the funding and commissioning of services for Māori," it states, one of just a handful of discordant notes in an otherwise harmonious series of recommendations.

Alongside the creation of the health authority, the review recommends an update of provisions relating to the Te Tiriti o Waitangi/Treaty of Waitangi in health-related legislation. As it stands, the legislation does not explicitly mandate that te Tiriti principles be applied throughout the entire health system.

DHBs would also be specifically mandated to improve "equity of Māori health outcomes". All Tier 1 service plans would need to incorporate consideration for kaupapa Māori services and the funding formulas for most services would take into account the Māori population "to better reflect unmet needs".

The Māori Health Authority would also oversee a second major plank of the Māori health reforms - the embedding of mātauranga Māori services within the health sector.

"The Review supports mātauranga Māori being embedded in the health and disability system and that it should recognise the holistic approach to mātauranga Māori towards health and wellness as being more than just a cultural option; it should be an integral part of the system."

This means enhanced funding for the provision of mātauranga Māori and that tikanga Māori applied as a norm in health services and settings for Māori patients, whānau and communities. Such development would be governed by the health authority but also take a bottom-up approach for Tier 1 services, so that specific iwi and hapu could ensure their local system meets their own specific tikanga needs.

Māori-led and -owned health services would also need greater investment in the new system, the review recommends.

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