GUEST BLOG: Ian Powell – Pointer to Government rethinking on district health boards?

On 4 March I blogged on Otaihanga Second Opinion about recent indications that the Government was rethinking its position on one of the two main pillars of the structural overhaul of New Zealand’s health and disability system recommended by the Heather Simpson review.

Specifically the Government was likely to confirm in April that would not be replacing the current 20 district health boards with a much smaller number of ‘mega DHBs’. This appeared to recognise the political and other risks of the disruption and destabilisation this massive restructuring was likely to cause the health system.

Little’s big pointer

These indications were reinforced by the Minister of Health Andrew Little when interviewed by Newsroom investigative reporter David Williams in an article (12 March) on the predominance of business consultants in the Government’s Health Transition Unit established to advise on the implementation of the Simpson review recommendations (this predominance was discussed in the last Otaihanga Second Opinion post ).

In stating that a paper on implementation would go to cabinet later in March, almost reading like an aside, Little noted that “I’m not in a position to go into detail about what that is starting to look like, except that the decisions we will take will focus on the nationwide health structure from which health service delivery will operate from”.

Little’s emphasis on decisions involving the ‘nationwide health structure’ is a clear pointer that, rather than restructuring DHBs, the Government’s structural focus will be on the formation of an additional national health bureaucracy preliminarily named ‘Health NZ’ (the other main pillar of the Simpson review’s structural overhaul). Merging some DHBs might still occur (as they can now) but not as proposed by the Simpson review or as part of another national plan.

Interestingly when responding to parliamentary questions today from National Deputy Leader and health spokesperson Shane Reti, it was noticeable that the Minister was evasive over any commitment to DHB reduction.

Putting aside the questionable logic of establishing an additional national health bureaucracy because of lack of confidence in the existing bureaucracy (Ministry of Health), if Little’s pointer along with other indications pans out then this is sensible.

What is a DHB

Put simply, a DHB is a statutory authority responsible for ensuring the funding and provision of community and hospital health services for a geographically defined population. This includes ensuring population needs analysis. DHBs therefore require sufficient capacity and capabilities for both personal and population health services.

Population size alone isn’t determinative for defining DHB boundaries. Big differences in size are immaterial – if there are good relationships between tertiary and secondary care DHBs. It doesn’t matter, for example, that Capital & Coast, Hutt Valley and Wairarapa DHBs all considerably vary from each other in size (large, medium and small). Their respective populations are around 318,040, 150,000 and 47,000.

In isolation population size comparisons suggest that it is ridiculous to have three separate DHBs in the wider Wellington region. But it shouldn’t be seen in isolation. Even DHBs with smaller populations are big employers relative to the region they cover. In every region currently covered by a DHB, that DHB is most likely the biggest employer.

Population size is only one factor. The geographic size of Capital & Coast is over 700 square kilometres whereas Hutt Valley is over 900. The DHB with the much smaller population has a far greater geographic size – a massively contrasting over 5,900 square kilometres.

It isn’t just that smaller DHBs often have to cover geographically dispersed populations. Geographic size also means different health complexities. Dispersed rural and concentrated urban populations have both similar and differing complexities (this is recognised in the Population Based Funding formula which is used to distribute government funding for DHB operational costs).

A DHB needs to include at least one base hospital undertaking a range of 24/7 acute and non-acute surgical, medical, maternity and mental health services. If Wairarapa didn’t have its base hospital in Masterton the logic for having its own DHB would disappear. To do their job well DHBs must know their populations well. The further away decision-making is from its populations the less a DHB will know about their populations needs.

Once DHBs go beyond two base hospitals, which means consequentially larger and more dispersed populations, even good engagement cultures would struggle to compensate for this compounded difficulty. Subject to making good clinical sense, there may be a case for a future merger of Capital & Coast and Hutt Valley DHBs because of having only one base hospital each and their close proximity (the same argument could apply to other situations such as MidCentral and Whanganui). This is less so for Wairarapa, however, because of lack of proximity, its geographic size and its distinctive rural health complexities.

Even increasing to two base hospitals when considering a merger of two adjacent DHBs is problematic if there are big distances between them. The fraught top-down driven merger of the former Otago and Southland DHBs into Southern DHB with base hospitals in Dunedin and Invercargill that also serve large hinterlands is an unfortunate example of how structure can impede improving population health.

DHBs are well placed for better integrating community and hospital care as part of a continuum providing that they are suitably structured to know the health of their populations well. Simplistic slogans about 20 DHBs being too many for a population of five million or variations in population sizes are not arguments for merging. Arguments must be much more substantive and make good clinical sense (without which they also won’t make good financial sense).

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.