Bye-bye Subsidiarity; Hello Democratic Deficit

Monday, 18 April 2022, 7:05 pm
Opinion: Ian Powell

Every piece of parliamentary legislation has a ‘purpose’ clause describing the legal means or effect of the legislation, usually clause 3 which communicates its intent. The Pae Ora (Healthy Futures) Bill setting up the foundations of the New Zealand (Aotearoa) health system from 1 July is no exception.

The Bill is now at the select committee stage, with its report back to Parliament expected to be by the end of this month. Labour has a select committee and parliamentary majority, so whatever it wants, it will get – unless it is fearful of voter reaction over some of the Bill’s provisions.

Assuming the Bill will be enacted on schedule, it will replace the New Zealand Public Health and Disability Act 2000 (NZPHDA). Comparing the purpose clauses of the current Act and the Bill now before Parliament is reveals much about the Government’s approach to the health system.

Purpose of New Zealand Public Health and Disability Act

The current Act, marshalled through Parliament by then Labour health minister Annette King, established district health boards (DHBs). Its express purpose is to provide for the public funding and provision of personal health services, public health services, and disability support services, and to establish new publicly owned health and disability organisations.

Four objectives are established and required to be pursued:

1. Achieving for New Zealanders the improvement, promotion, and protection of their health; the promotion of the inclusion and participation in society and independence of people with disabilities; and the best care or support for those in need of services.
2. Reducing health disparities by improving the health outcomes of Māori and other population groups.
3. Provide a community voice in matters relating to personal health services, public health services, and disability support services. (The means for this include elected board members of DHBs; board meetings and certain committee meetings to be open to the public; and requiring consultation on strategic planning.)
4. Facilitating access to and disseminating information to “deliver, appropriate, effective, and timely health services, public health services and programmes”. (This was for the protection and promotion of public health and disability support services.)

The purpose clause includes three key statements. First, it says there is not to be “preferential access to services on the basis of race”; equality required under the Human Rights Act 1993 must be ensured.

Second, to give effect to achieving the Act’s purpose, “the Crown and DHBs must endeavour to promote the integration of all health services, especially primary and secondary services”.

And third, “the Crown and DHBs must endeavour to provide for health services to be organised at either a local, regional, or national level depending on the optimum arrangement for the most effective delivery of properly coordinated health services”.

The second and third observations deserve special notice and are discussed further below.

Purpose of Pae Ora Bill

The Pae Ora Bill states its purpose is to:

• provide for the public funding and provision of services in order to protect, promote, and improve the health of all New Zealanders
• achieve equity by reducing health disparities among New Zealand’s population groups, in particular for Māori, and
• build towards pae ora (healthy futures) for all New Zealanders.

The current Act’s purpose clause has 334 words; but this Bill has 60. So what is missing to explain this huge contrast?

The principle of subsidiarity

It is not just abolishing DHBs that explains this contrast. It is the complete removal of the principle of subsidiarity, which has been a foundation of our public health system since it was first legislated for in 1938.

This principle, which was strengthened by the reforming first Labour government of Michael Savage and Peter Fraser, is now being executed by the current Labour government.

The executioner is Health Minister Andrew Little (although the architect was Ernst & Young senior partner Stephen McKernan in his role of head of the Government’s Transition Unit).

Subsidiarity is a principle that underlies the relationship between local government in numerous countries, including Aotearoa. In the days when there was a more class conscious reformist political left, this was often called ‘municipal socialism’. Subsidiarity also underlies the relationship between the European Union and its member states.

The general aim of subsidiarity is to guarantee a degree of independence for a lower authority in relation to a higher body. In the context of governing, this means a guaranteed degree of independence for a local authority (such as a DHB) in relation to central government. Subsidiarity recognises that social and political issues should be dealt with at the most immediate (or local) level, consistent for resolution.

For enforcement, certainly in health systems and in relation to local government, this requires procedural arrangements established in law. It becomes a ‘procedural principle’ for the fundamental objective of multilevel governance.

In the case of the current public health system this ‘procedural principle’ is provided in the NZPHDA through its purpose clause discussed above and subsequent clauses covering the objectives, roles and functions of DHBs.

For Aotearoa’s public health system, it means that in areas which don’t fall within its exclusive competence, central government shall act only if the objectives of the proposed action cannot be sufficiently achieved by DHBs.

Ultimately, central government is the higher authority because it controls funding and policy-making, and has a big influence on board appointments, including DHB chairs and deputy chairs.

Positive tension of subsidiarity

Think back to my third observation about the purpose clause of the NZPHDA – the requirement for the Crown (central government) and DHBs to endeavour to provide for health services to be organised at either a local, regional, or national level.

This recognises there is a balance to be struck between local and national knowledge, especially for defined populations.

There is an inherent tension when endeavouring to strike this balance. However, tension is not necessarily bad. With the right leadership culture based on interactive engagement and respect this tension is positive – for patients, the health workforce and the health system as a whole.

On the other hand, the removal of the principle of subsidiarity from our public health system means the replacement of positive tension with the negative tension of a monolithic bureaucratic centralism.

Integration of community and hospital care

Back to my second observation above about the NZPHDA purpose clause – central government and DHBs must endeavour to promote the integration of all health services, especially primary and secondary (hospital) services.

Achieving this integration has been the hardest struggle for the DHBs since their inception in 2001. They inherited an unhelpful contractualist culture from the failed 1990s business market experiment, which meant that if something wasn’t in an agreement or contract, it didn’t have to be done.

Over time, this shifted – although unevenly – to a relational culture, which enabled a more innovative approach. It was this relational culture that led to the successful health pathways initiative between community and hospital at Canterbury DHB, an approach that has been taken up by other DHBs, beginning with South Canterbury.

The improved accessibility and quality of care that resulted, led Canterbury to become the first DHB to “bend the curve” of increasing acute demand (the biggest driver of health costs and DHB deficits). But the DHB came into increasing conflict with the bureaucratic top-down leadership culture of the health ministry.

The ‘democratic deficit’

Removing the principle of subsidiarity by abolishing DHBs was not in Labour’s 2020 election manifesto. Neither was it in the report by the Heather Simpson-led Health and Disability System Review Panel, nor was it part of earlier public debate.

This exclusion of the right of the public and the health system to consider and debate the abolition of DHBs constitutes a massive ‘democratic deficit’ in the process. If this had been done by a National government then the Labour Party would have been among the strongest criticisms.

The opposite of subsidiarity is the ability to overpower someone or something by controlling through power or dominance. The outcome of this predetermined law-making process will also create a further democratic deficit, this time in the operation of the health system.

Owing to the level of control by the ‘higher authority’ (central government), the ‘lower authority’ (DHBs) are not able to debate differences with the latter over matters such as service provision, funding and hospital rebuilding in public.

But DHBs could in private and did. At the forefront of this behind-the-scenes’ advocacy was Canterbury DHB. Hence the undermining and forced departure of its senior leadership by the health ministry ably supported by the health minister’s crown monitor and Ernst & Young. Under Andrew Little’s Pae Ora Bill, this more private advocacy will be snuffed out.

As a sign of the new post-1 July environment, DHBs were not able to challenge the wisdom of abolishing subsidiarity, either publicly or privately.

Abolishing DHBs is a backhanded means of significantly increasing the ‘democratic deficit’ in New Zealand’s health system. The quality of decision-making will be the immediate casualty with the public and the health workforce the consequential casualties.

Instead of the “healthy futures” promised by Little’s bill Aotearoa is more likely to have unhealthy futures.

[This is a modified version of my article published by New Zealand Doctor on 13 April 2022]

© Scoop Media

Ian Powell

Otaihanga Second Opinion is a regular health systems blog in New Zealand.

Ian Powell is the editor of the health systems blog 'Otaihanga Second Opinion.' He is also a columnist for New Zealand Doctor, occasional columnist for the Sunday Star Times, and contributor to the Victoria University hosted Democracy Project. For over 30 years , until December 2019, he was the Executive Director of Association of Salaried Medical Specialists, the union representing senior doctors and dentists in New Zealand.

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