GUEST BLOG: Ian Powell – Gaius Petronius Arbiter on abolition of New Zealand’s district health boards


In the 1991 Budget, the National government of Prime Minister Jim Bolger confirmed its intention to restruc ture New Zealand’s public health system by basing it on competitive market principles. Formally commencing on 1 July 1993, this restructur ing was designed by then Minister of Health Simon Upton aided and abetted by external business consultants.

When addressing a meeting of Association of Salaried Medical Specialists’ representatives at that time, one Dr Don Matheson wittingly renamed the minister “Simon Option”. In the 2000s Dr Matheson became a deputy director-general of health playing an important role in the implementation of district health boards. Today, now Professor Matheson, he’s back in the Ministry of Health witnessing their demise.

In the process of trying to comprehend this massive ideological venture at the time, I came across the words widely attributed to Gaius Petronius Arbiter (there is debate over who actually phrased these words). Petronius (27–66AD) was an erudite Roman courtier and senator writing in the era of one of the most infamous musical fiddlers, the Emperor Nero.

Petronius observed: “We trained hard – but it seemed that every time we were beginning to form up into teams we were reorganised. I was to learn later in life that we tend to meet any new situation by reorganising, and what a wonderful method it can be for creating the illusion of progress while actually producing confusion, inefficiency, and demoralisation.”

I reflected on his insight in the context of Upton’s health restructuring. It fitted perfectly and I used it in speeches and writings many times. The take-home message was that, rather than improving clarity, efficiency and morale, structurally driven change was more likely to do the opposite. I recall Michael Cullen, Labour Party finance spokesperson at the time, being rather taken by the historical reference.

Brief historical overview of structural change

It is worth thinking about Petronius’ observation when considering a brief historical overview of structural change in New Zealand’s health system.

The country’s first public health system was the result of major social security legislation adopted in 1938 under the first Labour Government. By the mid-1980s, this had developed under both Labour and National governments into a long-standing system based on a structural divide. Hospital boards were responsible for public hospitals and the Department (now Ministry) of Health was responsible for primary care, largely through privately owned general practices.

In the late 1980s, after lengthy consultation, a new restructuring with bipartisan Labour and National support led to the replacement of hospital boards with fewer and larger area health boards. Area health boards were responsible for public hospitals, but the intention was that, over time, they would assume more direct responsibility for primary care. In the meantime, primary care would remain the responsibility of the Ministry of Health.

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Sudden U-turn

But area health boards never had the opportunity to make this transition to a whole-of-population healthcare respon sibility. They were abruptly replaced in 1993, by Minister Upton’s return to a structural divide between primary and hospital care. The latter was provided by state-owned companies called crown health enterprises. Primary care remained the responsibility of central government.

This flawed system lasted only until 2000 when, picking up from where area health boards had left off, district health boards (DHBs) were introduced with explicit statutory responsibility for ensuring healthcare for geographically defined populations, both in the community (including primary care) and in public hospitals. Over time, the funding of primary care was transferred to DHBs.

So DHBs were the third restructuring since the mid-1980s. The first, under Labour, involved moving away from structural separation between primary and hospital healthcare towards a more integrated approach. The second restructuring, under National, in the 1990s, involved returning to the structural separation. Then, back under Labour, the third restructuring, in the 2000s, dropped the structural separation and returned to, and strengthened, the integrated structures (DHBs).

Siblings separate again

Now, in the 2020s under Labour, the health system is being restructured a fourth time, to return to the structur al separation between primary and hospital care. Current Health Minister Andrew Little describes this as bold. Repetition would be a more accurate description. To the extent that boldness has relevance, it is merely the boldness of whiteboard warriors.

Little’s structural reversal has more in common with National’s structural reversal of the 1990s (although the governing legal framework was different). What Minister Little also shares with Minister Upton of 30 years ago, is a strong propensity to overhype what their respective restructur ings will deliver. Upton got it terribly wrong. Like Upton, Little is aided and abetted by business consultants, primarily Ernst & Young.

In the year 2031…

Learning from the history of health restructuring internationally and in New Zealand, we should anticipate that, in 2031 or thereabouts, nothing will have changed. Responding to concerns over the negative consequences of top-down bureaucratic centralist decision-making and lack of integration between community and hospital care, health minister Andrew Little II (or Simon Upton IV), aided and abetted by EY business consultants will announce the latest restructuring of the health system.

Unless, of course, the lesson has, by then, been learned that it is not restructuring but cultural change, including leader ship, that achieves sustainable and effective health system change. I’m an optimist but this is not an optimism that Petronius or recent history would share.

[This post is an abridged version of an earlier article recently published in New Zealand Doctor]

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


  1. This week’s questions

    Where is the evidence to support the narrative put forth in the media by health professionals that one coronavirus variant is more dangerous/deadly/more transmissible than another?

    Is it ethical to have media personalities ‘allowed’ to remark on Covid-19 publicly while the rest of society are having their statements censored (especially social media)? John Campbell on TVNZ Breakfast, 16 July 2021, for instance suggested that the very presence of Delta coronavirus variant was reason enough to insist on lockdowns.

    What is the scientific basis of the remark made by a health expert on TVNZ Breakfast, 16 July 2021 at 0648am, that the Delta coronavirus variant is a ‘psychopath’?

    What scientific evidence is there to support the narrative that indigenous New Zealanders (definition required) are more susceptible to harm from Covid-19?

    What is the scientific reason for showing the Prime Minister’s vaccination on television?

    Is it ethical for the Australian government to create a Covid-19 advertisement showing a woman in deep distress on a ventilator, seemingly to influence vaccination, when the people of this distressed woman’s age group are currently unable to receive the Covid-19 vaccination?

    What scientific evidence is there for the current narrative being put forth by health professionals (for example Newshub The Am Show 16 July 2021 at 0845am) which suggests vaccination hesitancy is being linked to a fear of needles?

    What scientific basis is there for the Australian New South Wales health directorate to use a death of a 90 year old woman (a sample size of one from the very highest risk group) to support their case for the lockdown and isolation of millions of people?

    Is it possible for the public to access quality control data for vaccines they are to take, for example the quality assurance program for Pfizer BNT162B2 such as the disease targeting and effectiveness, manufacturing partners and processes, sampling strategies and testing protocols (such as ingredient robustness, nucleotide sequence integrity and completeness, and repeatability within vial, between vials and between batches)?

    Is it ethical for the French government to mandate health ‘pass’ documentation to prove personal vaccination when the general public are entitled to privacy with respect to their health status and records, when no previous community coronavirus outbreak has been reacted to in this manner, when fatality numbers from Covid-19 are much less than for other diseases, and when those that are vaccinated are protected from further infection and so don’t require proof of anything from anybody?

  2. Is this an example of the ‘joke’:The story of three envelopes is a business classic for dysfunctional organizations. It starts with an incoming manager replacing a recently fired outgoing manager. On his way out, the outgoing manager hands the new manager three envelopes and remarks, “when things get tough, open these one at a time.”

    About three months goes by and things start to get rough. The manager opens his drawer where he keeps the three envelopes and opens #1. It reads: “Blame your predecessor.” So he does and it works like a charm.

    Another three months passes and things are growing difficult again so the manger figures to try #2. It reads, “reorganize.” Again, his predecessor’s advice works like magic.

    Finally, about nine months into the new job, things are getting really sticky. The manager figures it worked before, why not try again. So he opens the envelope drawer one last time and opens #3. It reads…”prepare three envelopes.”

  3. My 2c as someone who has worked in healthcare.

    Re-orgs do two things:
    1. waste a huge amount of time and resources as everyone is either fighting for their place/voice at the top, or wondering what the hell will happen to their job
    2. they distract everyone from delivering outcomes

    Let’s look at the parts of the system they have to reorganise/contribute resources.

    The current current MoH have little to no actual capacity to run anything and deliver actual outcomes. It’s really just a policy shop with some recent bits tacked on to deliver Covid response, but even then, we had to get the military to run MIQ. When it comes to technology, always a big driver of outcomes and critical in healthcare, the MOH is worse than useless – they have no actual capability and little capacity. Their ‘tech experts’ have simply risen up to their level of incompetence and can’t get a job in the business world.

    Ian has eloquently described how Canterbury DHB was doing great work only to be shot down by the jealous neoliberals at the MOH. Counties Manukau DHB had several parts that were exceptionally well run, and some that were disasters (innovation hub, childrens ward spring to mind). Auckland DHB did ok, and from there on it goes down hill into meh, incompetence (thinking of you Hamilton with cybersecurity), and fraud (see again Hamilton, previous CEO; southland with their CTO a few years back).

    Fundamentally many of the DHB managerial staff will have to play a role in the new system, so what will really change there? MOH has no real capacity or capability (e.g. the measles outbreak, continued failures with Covid). Look at the calibre of people in Public Service – just saw a guy on LinkedIn who went to Kings, then moved straight in to advisory roles at e.g. department of housing, various ministries etc. No actual working experience outside government, nothing practical achieved. This is the sort of greasy pole climbing nobody who will ‘advise’ the reforms into the ground.
    Also there are still very serious workforce retention/incentivisation problems e.g. the nurses. These used to be great careers but when you give it your all and get burned out, people rightly give up, so something needs to change here.

    Organisation structure
    This hasn’t even been defined yet but the centralist tendencies of politicians and the bureaucracy will dictate a centrally run mega structure that won’t respond to local need. Much of healthcare these days is very complex and interrelated, needing intervention and support from local, GP level on up and needs to be highly integrated with great technology. Some of the ideas behind Health Benefits Limited were ok e.g. why the fuck does each DHB have separate payroll systems? This function is totally bog standard, and should not be duplicated across disparate different DHB systems and processes, but HBL were again run by incompetents and choose shit technology.
    The best structure would be to reduce the number of DHB’s (e.g. in Auckland from 3 to 1), and devolve more funding and resources closer to communities. Counties Manukau was experimenting with this a bit and gaining some traction but it needs to go much further.

    This is a fundamental problem. There is just not enough. Before Covid the government was planning on decreasing per-capita funding! Unbelievable. The neoliberals just can’t abandon their ‘squeeze it until it bleeds’, starve-the-state views on this. Rampant immigration has made it even worse. No one has analysed immigration versus taxpayer contribution for the age profile of immigrants, but on the surface it looks like way too many people brought into the country, resulting in increased healthcare demands, without the tax base to support it. Especially older parents who had never paid tax here but are the biggest burden by age cohort. Very stupid planning there.

    The healthcare sector overall has absolutely appalling, outdated technology that needs replacing. Weirdly this is an area where centralisation could help but given the problems with MOH not having anyone who knows what they are doing in tech, they will choose some ridiculous ‘one size fits all’ foreign behemoth of a system like Epic (to sign the contract, you literally have to go through a marriage ceremony with the crone that runs Epic in the US), and shoehorn it to local conditions. Absolutely the worst thing to do. This is where innovation and integration, using newer systems and standards based around FHIR need to be used. Orion Health should also be treated with a great deal of scepticism too, given past performance and their continued weird desire to reinvent the technical wheel (i.e. build custom stuff that is already commodity) to suit the whims of their mercurial CEO.

    I have no hope this will deliver anything useful. Loads of morons will make their careers and promote themselves as transformation/change agents/experts, but outcomes will not change and may actually get worse.

  4. Ian, I totally agree with the Petronius Arbiter analogy; continual change destroys any chance of building robust structures and systems. I have always considered that ‘evolution’ rather than ‘revolution’ brings about better final outcomes. Having said that I would question if the current multiplicity of DHBs and Govt Depts is an effective and effecient way of providing health care.
    We don’t provide our police or fire services in this way – would their national structure format provide a better outcome in the health system? As I have gotten older something that has become very clear to me is that ultimately it is the quality of the people working at all levels in any system, regardless of its structure, that produces good outcomes. Sadly ‘glowing’ CVs, and ‘overseas’ experience don’t always equate to quality managers.

  5. The sad thing is that so many in NZ are desperate to privatise health care which is as grossly inefficient as it is a rip off in countries where they have decimated public health care.

    We got the bill for having a baby – $37,000. Welcome to life in America

    Public Health care in China is not free for urban nationals…

    “Residents of urban areas are not provided with free healthcare, and must either pay for treatment or purchase health insurance. The quality of hospitals varies. ”

    “Despite this, public health insurance generally only covers about half of medical costs, with the proportion lower for serious or chronic illnesses. Under the “Healthy China 2020″ initiative, China is currently undertaking an effort to cut healthcare costs, and the government requires that insurance will cover 70% of costs by the end of 2018”.

    Public Health care in India is poor quality and most people don’t use it…

    “The Indian public health sector encompasses 18% of total outpatient care and 44% of total inpatient care.[10] Middle and upper class individuals living in India tend to use public healthcare less than those with a lower standard of living.[11] Additionally, women and the elderly are more likely to use public services.[11] The public health care system was originally developed in order to provide a means to healthcare access regardless of socioeconomic status or caste.[12] However, reliance on public and private healthcare sectors varies significantly between states. Several reasons are cited for relying on the private rather than public sector; the main reason at the national level is poor quality of care in the public sector, with more than 57% of households pointing to this as the reason for a preference for private health care.”

    The neoliberals can’t wait to destroy NZ free health care and the public health system in NZ.

    Neoliberals are trying to destroy NZ’s health care by adding as many people as possible to live (1 million new residents iin NZ from immigration not births here) mostly on low incomes or for people who don’t seem to stay long. Also expanding tourism and travel in NZ, while not expecting visitors in NZ to provide any private health insurance before they issue the visa or entry into NZ.

    The government is also doing nothing about people coming to NZ in the lat few decades to have a baby for free, register them as a NZ citizen, while then leaving or paying zero to little taxes here. When Covid strikes, so many people suddenly remember they are NZ citizens and residents and rushing for free health treatment and MIQ places here. Same will happen with pensions and retirees when suddenly millions of ‘Kiwis’ arrive back in NZ to claim retirement freebies, health care and aged care services.

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