Hon Tony Ryall
Minister of Health
21 October 2009 Media Statement
Major push to lift public health performance
Health Minister Tony Ryall today announced a major drive for better value for money in health. He intends to free up
resources for more and better front line services.
"Cabinet has agreed to a number of proposals from the Ministerial Review Group's report 'Meeting the Challenge' that
will greatly improve national and regional cooperation and reduce duplication of back office functions, " the Minister
said
As a package, the changes will move up to an estimated $700 million in savings over five years to frontline services.
That would buy about 16,000 heart bypass operations or build two large city hospitals. The changes are also expected to
reduce the health system bureaucracy by up to 500 administration jobs. These would be managed as much as possible
through attrition and voluntary redundancy.
"The National Government inherited a public health system that wasn't well placed to cope with the significant financial
and clinical challenges facing it. There is too much duplication that has led to poor regional and national performance
and a track to financial crisis."
The Health Minister said there was a clear consensus across the health sector – and amongst the public – that change was
needed.
"To better focus on patients, the public health service needs to stop reinventing the wheel 21 times in areas like IT
and payroll" Mr Ryall said.
"This is about making the current system work better by filling in the missing links."
"The Government wants better coordination between District Health Boards (DHBs) and the Ministry of Health, and we want
neighbouring DHBs working better together to improve services. Clinical networks will be a big part of this
cooperation."
The major changes include setting up a new National Health Board (NHB) within the Ministry of Health. The NHB will focus
on supervising the $9.7 billion of public health funding the 21 DHBs spend on hospitals and primary health care.
The new NHB will manage national planning and funding of all IT, workforce planning and capital investment It will also
take national responsibility for vulnerable health services such as paediatric oncology.
Work will also start on consolidating the 21 DHBs' back office administrative functions such as payroll and bill
payments.
The Minister said the changes also give the Ministry of Health a clearer focus on working with District Health Boards on
improving services for patients.
"Officials estimate a one-off cost of between $5 and $10 million to set up the changes and that will be met within the
Vote Health budget. Up to an estimated $700 million is expected to be saved in the first five years from coordinating
procurement and logistics. All savings will be reinvested back into frontline health services."
The Minister said Cabinet had carefully considered the Ministerial Review Group's 170 recommendations along with the
public feedback received on them.
"These changes are an urgent priority and implementation will begin immediately" said Mr Ryall. "An officials group will
coordinate the changes to ensure they are effectively planned and managed."
ENDS
Questions and Answers: MRG_Decision_QAs_21_10_09.pdf