Go Andrew Little – you beauty!

As a frequent harsh critic of the Labour government it’s a pleasure to  welcome Health Minister Andrew Little’s decision to restructure the health system.

It’s a big, bold move which will be genuinely transformative if it is implemented with public service principles at the heart of the big decisions ahead.

Under Little’s proposal all 20 District Health Boards will be replaced by one national health body, Health New Zealand. Alongside this a new Māori health authority will be created, with power to commission health services.

The reforms will also involve the creation of a new public health agency – desperately needed in light of the rundown of national health planning over recent decades and the struggle to get a co-ordinated response to the pandemic.

The major problem with the current DHB model is its fragmentation and duplication of costly bureaucracy around the country which has been exacerbated by the focus on “managerialism”*

The main driver of the current system has been rationing health services and reducing pressure on politicians for additional health funding. The public has been told the DHB’s have the money (as a bulk fund based on the population in the DHB area) and if the services are not there then either the funding priorities of the DHB are wrong or there are serious inefficiencies at the local level.

Treasury loves this model as it drives down the cost to government and leaves DHB’s to cut services rather than politicians (who Treasury believe are too influenced by public opinion) Politicians were let off the hook. This model has led to serious underfunding in health –
estimated at tens of billions of dollars over 30 years as politicians and senior Ministry of Health officials have blamed DHBs rather than the underfunding the government provides.

The selling point for the DHB model was it brought in local democracy with democratically elected boards to deliver local health services. It sounded good (the same funding model was used to promote other public service provision such as bulk-funded local schools with democratically elected Boards of Trustees) but was used to drive down public finding of
health services. Elected officials have found themselves making decisions on which services to cut rather than how to improve health outcomes for local communities. Slashing public services in the name of democracy.

Underfunding the health sector through the DHB model has also been used to pressure health boards to contract out services for private profit (eg provision of hospital meals) Relentless privatisation of public services for private profit.

The DHB model hit a serious obstacle in Christchurch where the DHB leadership, under former CEO David Meates, refused to cut services to stay within the hopelessly inadequate central government funding. All New Zealanders owe the Christchurch CDHB leadership a huge vote of thanks – their staunchness over many years has been a major contributor
to Andrew Little’s liberating decision. They acted as loyal public servants while senior health officials and treasury boffins fumed.

The importance of these changes in part is underlined by the political reaction they have received. National has described them as “reckless” and they have been criticised by the likes of Richard Prebble – a sure sign Andrew Little is on the right track.

It’s important to note here that Andrew Little has pushed back hard against the official advice he received from Heather Simpson. She proposed reducing the number of health boards to improve efficiencies. This would have been achieved in part by this suggestion but health would have remained mired in a “market mindset” where neoliberal politicians in National and Labour have worked hard to see how much of our public health services can be contracted out for private profit.

National’s friends in particular have grown wealthy through these contracts and they will be losers. Community Health will be the winner.

In pushing back against official advice Andrew Little has joined a tiny elite group of ministers – just himself and David Parker – who have acted with courage and foresight in the public interest, against official advice. (David Parker fought his ministry officials who opposed him introducing caps on the amount of fertiliser farmers can spread on farms to improve water quality).

The new model will need much greater funding than at present and this will require changes in taxation policies. It’s important to remember that the underfunding of health is because successive government’s have given tax cuts to the wealthiest New Zealanders. That money must come back to the public purse.

More cabinet ministers, including the Prime Minister, should follow their example.

A final word of advice for Andrew Little. There will be many contesting to be the CEO of Health New Zealand. Lester Levy is clearly positioning himself for this new key role with his public comments about the reforms. However, to get off on the right foot Andrew Little should pick up the phone and talk to David Meates.

*Managerialism is the belief that public servants are lazy and selfish and need constant monitoring by layers of managers to get the right “outputs”. It’s a backward, private sector mentality of inherent mistrust of anyone not benefitting from the profits of an enterprise. It
has no place in a highly functioning public service sector where people treated as professionals will give 110% effort to the common good.