Since the early 1980s successive National- and Labour-led governments have struggled to find the best way of funding and
delivering effective public health services. In 1983 the then 29 hospital boards administering the country’s health
system were replaced by 14 area health boards. The hospital boards were considered too narrowly focused on
hospital-based services, at a time when there was a growing emphasis on wider public health services beyond hospitals,
hence the move to area health boards.
But by 1990 it was clear that the new model was struggling to perform any better than its predecessor. When then Health
Minister Helen Clark sacked the largest of the area health boards – the Auckland Area Health Board (of which her husband
was an elected member) – because she considered it dysfunctional, and replaced it with an appointed commissioner, the
short-lived area health board experiment was effectively over.
The National government of the early 1990s formally abolished the remaining area health boards and replaced them with a
centralised Health Funding Agency and four Regional Health Authorities. The Regional Health Authorities were intended to
bid to the Health Funding Agency for the funding necessary to deliver the appropriate health services required for their
region. The model was intended to be accompanied by a detailed definition of what constituted core services, what they
might cost and how they could be organised and delivered, to assist Regional Health Authorities in their funding
applications to the central body.
However, the core services review immediately aroused suspicions that it was a cover for the introduction of more
competitive business models – “Americanisation” it was pejoratively called – to the public health system. When charges
were introduced for some short-term emergency procedures requiring a night in hospital, and hospitals were renamed Crown
Health Enterprises (or CHEs, as they became widely known) and established as stand-alone enterprises, the public
concluded things had gone too far. Another major shake-up to restore a sense of equilibrium was inevitable when the next
change of government occurred.
That came in 1999, with Helen Clark now the Prime Minister and her trusted adviser Heather Simpson, who has been with
her since the mid-1980s, her chief of staff. What emerged was a system of 20 district health boards, with half the
membership elected locally and the other half and the chair appointed by the government. The system was intended to be a
careful balance between recognising local interests and the government’s policy priorities and has been the basis of the
system since then.
However, the careful balance quickly gave way to stalemate, and a sense that through the power to appoint the board
chair, the government was usually able to ensure it got what it wanted, often at the expense of local priorities and
concerns. At the same time, the inherent operational inefficiencies of 20 autonomous boards, each ordering their own
equipment and supplies and running their own systems became obvious and cumbersome. Ministers of Health discovered that
the autonomy given to boards meant that they had no power to direct boards to do anything, but rather had to plead with
them through the appointed board members or pointedly worded phrases in the annual letter of intent sent to each board,
in the hope they might get their way.
The last National-led government started to address the organisational inefficiency aspect by getting some smaller
boards to collaborate on and share back-room administrative services. But scorched by the public response to its
replacement of elected area health boards by the appointed Health Funding Agency in the 1990s, National was extremely
reluctant to do anything overt about reducing the number of boards, lest it once more be accused of stifling local
democracy. Instead, it attempted, largely unsuccessfully, to encourage board amalgamations, but the only one that
happened during its time was the extremely unpopular merger of Otago and Southland after one board had been fired and
replaced by a commissioner.
Another review to tidy up what seemed to be too many loose ends, and to give recognition to the distinct interests of
Maori and Pasifika in public health was inevitable when Labour took office in 2017. Just as inevitable – not to mention
extremely sensible – was that Heather Simpson should head the review. Few people would have had the length of exposure
to the public health system, its strengths and foibles, and the sense of perspective time brings, as she had.
The Simpson Health and Disability Services Review recommendations were released in June 2020. They are a pragmatic
response to the current situation. While establishing a new stand-alone national health authority to run the public
health system and halving the number of district health boards and having them fully appointed by the government, not
locally elected, may seem dramatic, it is really a refinement of the funder-provider split model the National Government
introduced in the early 1990s. The proposal to establish a separate Maori Health Authority has been largely welcomed but
there has been criticism that no similar model has been proposed to address Pasifika health concerns.
For its part, the government has appeared committed to the review, with the Minister of Health promising to announce its
decisions on the next steps to be taken shortly. At the time the report was released last year, the then Minister
described it as a “once-in-a-generation opportunity to back our world-class doctors, nurses and other health staff and
deliver a truly national health and disability system”.
To achieve this objective, the government’s forthcoming response to the Simpson review cannot be half-hearted or
incomplete. Yet the history of health sector reform of the last 40 years under successive governments shows that it has
never quite achieved its potential because it has never received the sufficiently full endorsement of the government of
the day. Any opportunity for meaningful reform has frequently been compromised by government “cherry-picking" for fiscal
and political reasons. More of the same in this instance will simply ensure more of the stagnation that has plagued the
system for years.
The present Minister of Health is well placed to break this mould. Whether he will do so remains to be seen.