Horn Report: New Health Bureaucracy Proposed

NO: 09-02 09 September 2009

HORN REPORT: NEW HEALTH BUREAUCRACY PROPOSED

New bureaucracy: National Health Board Previously we reported on the risks to government posed in the Horn Report despite a number of useful recommendations. The central feature of the major restructuring proposed in the report is the creation of a new National Health Board (NHB) to:

* strategically plan and plan the funding of future capacity such as information technology, workforce, capital and facilities;

* fund national services presently funded by the Ministry of Health and services deemed to be national, including taking money out of funding presently allocated to DHBs;

* monitor DHBs partly by requiring them to develop the top three or four productivity measures that are important to them; and

* arbitrate any dispute as to whether services are to be national, regional or local.

In summary, the proposed NHB would be similar to the disbanded Health Funding Authority (of the late 1990s) in terms of funding DHBs. But it would be expanded beyond this to include planning, overseeing and directing DHBs including on service provision.

The rationale according to Horn The Report provides four reasons for reducing the role of the Ministry of Health and creating the National Health Board. They are: 1. The Ministry has too many diverse responsibilities. Separation would allow the Ministry to focus on its core tasks of “policy and regulation” leaving the NHB to focus on “improving performance”.

This neglects the increased monitoring and advisory role the Ministry will have in reference to the NHB (and any other new structures). Further, in a small country two central bureaucracies is excessive. The experience of the former Health Funding Authority included duplication and competitive tensions between the two structures.

2. The Ministry’s performance should be independently reviewed but it can’t be if it does it itself. Separation is supposed to overcome this. However, this neglects the point that the Auditor- General has auditing functions for government departments and agencies while the State Services Commission can also performance monitor.

Further, there have also been independent university reviews.

3. “Separation forces greater clarity around the objectives for, and operational requirements of, the implementation functions that will now be carried out by the NHB.” This is debatable, especially in a small country such as New Zealand, with no evidence provided to sustain it.

4. As a crown entity the NHB would be “more distant from the Minister” which “should provide greater confidence about how the NHB would behave.” This “reduces both the reliance on subjective factors and the scope for lobbying and special pleading.” These are a mix of unsubstantiated assertions and reasons why it should not be supported. The reference to lobbying and special pleading could reasonably be expected to include us and other medical and health advocacy organisations.

Laudable aims, poor mechanism The functions proposed for the NHB are largely laudable but the case for creating a new additional bureaucracy to perform them is weak. It does not justify the risks, paralysis and uncertainty likely to arise.

While the Ministry of Health could also perform this expanded role, the NHB as a crown entity would be more arms length and less accountable.

ENDS

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