In a distant corner of the national fairground sits an old piece of equipment that has been around for years, but only
gets turned on every decade or so. It never quite manages to do all the things it was supposed to, and so, in
frustration, it is closed down after a while, and put aside for years, until someone decides it is worth having another
attempt to make it work properly. It is called the health sector reorganisation merry-go-round, and it has just been
wheeled out again this week.
Prior to 1983, health services in New Zealand were primarily structured through 19 District Health Offices and 29
elected Hospital Boards. A further 230 Territorial Local Authorities had basic responsibility for wider environmental
health and town planning issues. By 1980, there were over 180 public hospitals in New Zealand and a further 163 private
hospitals offering a total of just over 31,000 hospital beds.
It was a bureaucratic and financial nightmare, and the heavy emphasis on hospital-based approaches dealt poorly with the
growing challenges in public and community health and general diversity. So, from 1983 the process was streamlined
through the establishment of 14 Area Health Boards to replace the Hospital Boards and District Health Offices, and to
deliver a wider focus than the previous intensively hospital-based system had proven capable of. The Boards were still
elected, to ensure there was sufficient regional and cultural diversity.
However, financial constraints in the wake of the 1980s economic restructuring followed by the 1987 Sharemarket Crash
and the slow pace of change meant that the new model never quite worked. In 1990, for example, the Minister of Health
was forced to sack the Auckland Area Health Board and replace it with a Commissioner to try to get it back on track.
At that time, there was a brief focus on getting a more business-like approach to the provision of health and hospital
services, and more integration between the public and emerging private sector healthcare providers, but the Gibbs Report
– which was supposed to lay out a pathway for meeting these goals – went too far. Its recommended virtual American-style
privatisation scared the politicians, who ran a mile from it.
However, the problems identified by the Gibbs Report and the failure of the Auckland Area Health Board could not be
ignored indefinitely. So, the merry-go-round was unveiled in the early 1990s and produced, after a few splutters, the
centralised Health Funding Agency, four Regional Health Authorities, 23 Crown Health Enterprises, and a stand-alone
Public Health Commission. None of these agencies was publicly elected, with the Minister of Health making all the board
appointments. A split between the provision of funding and services was established, with public hospitals funded on the
basis of the volume and quality of services that they had been contracted to provide by the funding agencies.
However, once again the model did not work out quite as intended. Arguments quickly arose over the Public Health
Commission. Its autonomy brought it into conflict with the government, irritated by its advocacy for various public
health issues, and the autonomous Regional Health Authorities who saw the Commission’s role duplicating and cutting
across their own responsibilities. So, it was abolished in 1995.
As Crown Health Enterprises started closing down small, usually rural, hospitals that were often poorly attended and
financially troubled, there was mounting public pressure to restore local democracy through directly elected local
boards. Therefore, out came the merry-go-round once more after 1999, and the Health Funding Agency and the Regional
Health Authorities were replaced by initially 21 (now 20) partially elected District Health Boards. By 2000, the numbers
of hospitals had risen to around 400, but the numbers of beds provided had reduced about 25% from those available in
1980.
Over the last twenty years, complaints about the adequacy and fairness of the funding model, the duplication inherent in
a large national system of autonomous District Health Boards, the unevenness in workforce planning across a number of
key disciplines have intensified. In short, although the health system has grown immensely, is generally better funded
and resourced than it was, and has become far more innovative, flexible and capable of ensuring people have access to
the best care available to ensure that they can maintain a decent quality of life, the challenges that have bedevilled
it for almost the last half-century remain.
Therefore, the merry-go-round has been cranked into life again and has produced the Health and Disability System Review
which released its final report this week. In many ways, its diagnosis of the system’s weaknesses is not all that
removed from the findings of the Gibbs Report, over thirty years ago, although its solutions differ markedly.
The real question, however, is what, if anything of substance will emerge once the government has had a chance to
consider the Review’s recommendations. If history is any guide, the decisions eventually reached will fall well short of
the problems identified by the Review, so will fail to get to heart of the problem. Add to that, this government’s
serial incapacity to get any reform process right or underway, and the likelihood of significant change diminishes even
further.
Meanwhile, the merry-go-round has been given a good clean, wrapped in its tarpaulins, and shifted back to the edge of
the fairground, to rest quietly, until next time.