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GUEST BLOG: Ian Powell – The Madness of Health System Restructuring During a Pandemic

Three main pillars were outlined in the “health reforms” for New Zealand’s health system announced by Health Minister Andrew Little in April. The “reforms” are about to come into effect in July next year.

Two of these pillars make sense and have the potential to help improve the efficiency of the health system, particularly by addressing the main driver of demand and cost – the external social determinants of health. They set up a Maori health authority and a new public health agency.

The effectiveness of these organizations will be influenced by the functioning of the system at the operational level, and this is where the third pillar comes in – the abolition of the 20 District Health Boards (DHBs). They are to be replaced by a new second additional health bureaucracy, Health New Zealand.

The announcement of the abolition came as a total surprise to the health sector. It was not part of the narrative surrounding the Health and Disability System Review, led by Heather Simpson, or the preparation for Mr. Little’s announcement. Simpson recommended both the creation of Health NZ and the maintenance of DHBs, although their numbers are reduced.

What are DHBs?

DHBs were born out of the Public Health and Disability Act of 2000. They were created to replace the failed market experiment in the 1990s to run the health care system like competing commercial enterprises. The law rejected commercial competition and encouraged cooperation (including integration between community and hospital care).

The 2000 law expressly requires DHBs to be responsible for the health and well-being of people in specified geographic areas (described as “resident populations”). Apart from the brief interlude of the regional health councils (late 1980s to 1993), for the first time, the single structure, the DHBs, took on statutory responsibility for primary, community and hospital care.

With DHBs responsible for geographically defined populations and promoting the integration of all communities – including general practitioners and residential care for the elderly – and hospital health services has been a strength of our public health system. This includes the obligation “to regularly investigate, assess and monitor the state of health of its resident population”.

Structurally, this gives New Zealand’s public health system significant advantages over many other modern health systems, including those in Australia and England where, for different reasons, community care and hospitals are much less integrated. It also allowed the health system to better implement the deployment of a vaccine against the pandemic.

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Narrative failure

There was no elaboration of a story justifying the abolition of DHB. Instead, sound clips were produced based on an embellished claim that New Zealand has 20 different health systems, as well as an inaccurate factual claim that abolishing DHB was compliant. at the National Health Service of the United Kingdom.

The reason for this failure is that the decision to remove DHB was taken late in the process. It seems to have gained ground when business consultants Ernst & Young (EY) entered the decision-making engine room. (The Reform Transition Unit is chaired by EY Senior Associate Stephen McKernan.)

Abolishing DHB was never part of Labor’s 2020 election campaign. Instead, it was secretly kept under wraps until the April announcement. The combination of this delay and the lack of engagement with the health sector prior to the decision greatly affected its robustness.

The rushed drafting of laws is muddled and, therefore, imperfect.

Poorly detailed “localities” and “locality maps”

The Pae Ora (Healthy Future) Bill was referred to a select committee. The bill establishes Health NZ to “direct the system operations, planning, commissioning and delivery of health services, in collaboration with the Māori Health Authority.”

After its own creation next July, Health NZ will also establish new bodies called “localities” to “plan and control” primary and community health services. In addition to covering geographically defined populations, localities are not defined. What they are and how they will function is omitted.

Instead, without context, we end up with empty statements like engaging with communities “at the appropriate level”. It will be up to Health NZ to determine, further and with the agreement of the Māori Health Authority, what these localities will be.

This is alarming because the aim of the localities is to organize primary and community health services covering all of Aotearoa. Currently, this is the responsibility of DHB.

Health NZ will then develop “locality plans”. In addition to including nationally determined decisions such as a national health plan, locality plans will define priority outcomes and services for the locality.

Potentially, these locality plans are important. But it is clear that they will be led and determined by Health NZ. This signals a much more centralized system than the one we have now.

No one seems to know what towns and town planning look like. The bill recognizes this problem by ignoring it. Both were recommended in Simpson Review, but with only a brief explanation.

Therefore, there will be no identifiable local structure to take over primary and community health services next July when DHB is abolished.

The madness of bad leadership

Thus, DHB must be abolished in new legislation that is void on primary and community care and virtually silent on hospitals (other than public hospitals run by Health NZ).

The replacement of existing structures with new ones that have not been worked on demonstrates a lack of political leadership and an irresponsible governance. Before we leave the health care system that we have, we should know a lot more about what we are going to do.

What makes him even more irresponsible, if at all possible, is doing it in the midst of an uncontrollable pandemic overseas. Whether the newly discovered, fast-running Omicron variant is more lethal than Delta remains to be seen. It is certainly more transmissible.

Two things are certain, however. First, if Omicron goes beyond our border isolation and quarantine facilities (as all previous variations ultimately did) into community transmission, our general practices (and other primary care providers) and our hospitals will be invaded.

Second, soon after the abolition of DHB (if not before), a new variant more deadly or transmissible than delta and omicron will emerge in New Zealand. It’s a matter of when, not if.

Aotearoa will need to continue reaching communities for booster vaccinations and potentially new vaccines for new variants of Covid. Existing DHBs are better placed to do this than a new, much more centralized structure led by novice bodies with key elements that will still need to be worked out after it comes into effect.

These DHBs will know their populations much better than Health NZ, especially in the absence of an alternative such as the new localities which are currently empty. Since the arrival of Delta in the country, the deployment of the vaccine has been very impressive and protective.

Especially when the implementation constraints of central government ceased, DHBs played a critical role in reaching deep into diverse communities and working with non-government providers.

Mindful of public safety, accessibility to healthcare, and the well-being of healthcare professionals and other staff, a responsible government would suspend abolition of DHBs at least until there is have a better understanding and consensus on what a viable and strong replacement might look like.

The reasons for dropping the abolition of DHB are as obvious as the US Declaration of Independence was to Thomas Jefferson.

[This is a revised version of my column published by New Zealand Doctor published on 15 December 2021]

Ian Powell was Executive Director of the Association of Salaried Medical Specialists, the trade union representing senior physicians and dentists in New Zealand, for over 30 years, until December 2019. He is now a healthcare systems specialist, labor market scholar and political commentator living in the small river estuary community of Otaihanga (the place by the tide). First published at Otaihanga Second Opinion