GUEST BLOG: Ian Powell – When health ministers change

Since my involvement in the health system began in April 1989 with my appointment as Executive Director of the Association of Salaried Medical Specialists (ASMS), I have witnessed four changes of government.

This involvement continued from January 2020 when I morphed into a freelance writer, health commentator, and health systems and politics blogger.

Macro changes and changes of government

The first change occurred with National becoming government in 1990. It overturned the health system by trying to create an “internal market” driven by competition and governed by the Commerce and Companies Acts.

The second change of government was in late 1999. The Labour-Alliance government binned National’s market experiment. Instead it introduced a cooperative system through district health boards (DHBs) and involving horizontal integration between community and hospital care.

This was continued following the third and fourth changes of government; both National-led (2008 to 2011) and Labour-led (2017 to 2020). Macro restructuring occurred twice, both after a change of government. However, at a macro level, health structures were characterised by consistency from 2000 to early 2021.

A change of health minister may appear to be micro by comparison. But there is much to tell in this micro as we witness another change, this time from Andrew Little to Ayesha Verrall.

First ‘sacked’ health minister

National’s electoral defeat of Labour in 1990 led to Simon Upton becoming health minister in November 1990. He was primarily responsible for introducing the internal market, which was theoretically and ideologically driven.

By the start of 1993, polls showed National heading towards being a one-term government. The unpopularity of Upton’s pending reforms led to his being replaced in March with the more experienced and astute Bill Birch.

Simon Upton: ‘sacked’ as health minister but not demoted in cabinet ranking

Birch didn’t reverse his colleague’s reforms, due to be implemented on 1 July, but was more competent when handling the government’s defence of them.  He had previously been a senior cabinet minister in Robert Muldoon’s National government (1975-84)

He dropped what was their most unpopular and tangible feature: user charges for hospital in-patients introduced in February 1992. This took much of the heat out of the controversy and helped National win the election in November.

Bill Birch’s experienced political nose helped mitigate electoral damage of National’s health reforms in 1993 election

After holding the portfolio for less than a year Birch was followed by Jenny Shipley for the full second term of the National-led Government. Bill English, who was followed by Wyatt Creech, held it for the third term.

The pragmatic English managed to give greater emphasis to fiscal prudence and the importance of cooperation, within the contradictory free market ideology; no easy task. Neither Shipley nor English were ‘sacked’ as health minister.

Creech held the portfolio in the final 10 months. By then, the internal market reforms were an electoral liability. In that short period, Creech endeavoured to fix some of the public sore spots caused by the implementation of the National-led government’s reforms.

Wyatt Creech: made a difference but electoral credibility damage already done

This largely involved in the short time available the leadership of the Health Funding Authority and Capital & Coast Hospital and Health Service. Creech made a difference for the better, but it was never going to be enough. Since Birch assumed the portfolio the problem with National’s health reforms was not the competence of its health minister.

Second ‘sacked’ health minister

Labour’s Annette King became the next to hold the portfolio, serving two consecutive terms (1999 to 2005) – rare for a health minister.

Pete Hodgson had been groomed to succeed her for the Labour-led government’s third term. However, he lacked his predecessor’s impressive emotional intelligence and could be raspy in his relationships with a health system that depends on good relationships to work well.

A bitter industrial dispute broke out with DHB-employed medical specialists represented by ASMS over the negotiation of a new national collective agreement. Unprecedented nationwide stopwork meetings were exceptionally well attended and received extensive media coverage.

Pete Hodgson: ‘sacked’ as health minister but not demoted in cabinet ranking

Prime minister Helen Clark, herself a former health minister, astutely read the signs. After two years in the position Hodgson was gone, replaced by David Cunliffe for the final year of Labour’s third term in government.

Cunliffe was quick off the mark facilitating a settlement of the dispute. He also facilitated a “time for quality” agreement between ASMS and the DHBs. This included engagement principles, one of which was that health professionals should have the lead role in service design, configuration and delivery with management in a support role.

David Cunliffe: improved relationships and left enduring legacies

The ‘time for quality’ engagement principles were then incorporated into medical specialists national collective agreement. They still remain in force today; previously they contractually bound DHBs; today they bound Health New Zealand (Te Whatu Ora).

Another Cunliffe achievement was bringing the health unions affiliated to the Council of Trade Unions, DHBs and Ministry of Health into a tripartite Health Sector Relationships Agreement (work on this agreement was underway prior to him becoming minister). This important Agreement endured right up to the abolition of DHBs (and may continue beyond in some fashion).

Cunliffe’s successor following National’s electoral success in November 2008 was Tony Ryall who, like Annette King, served two full terms in the portfolio. The DHB system continued with some efforts made to improve national cohesion, including the establishment of a National Health Board and a Crown entity called Health Benefits Ltd.

This was also a period of relative decline in health funding, which continued through the full three terms of the National-led Government. In October 2014, Jonathan Coleman became health minister. During the early stages of his term, he reversed some of Ryall’s initiatives.

The third ‘sacked’ health minister

Labour returned to the Treasury benches in October 2017 to lead a new coalition government. David Clark became the new health minister for all but the final three months of the term, when the portfolio fell to Chris Hipkins. Continuation of DHBs was not questioned.

Clark established a review of the health and disability system chaired by Heather Simpson. DHBs remained central to its recommendations although it proposed reducing the number. Labour went into the 2020 election promising to implement the principles of the review.

DHB abolition was not even hinted at before Andrew Little became health minister in November. But, without any public discussion or forewarning, four months later (April 2021) Little announced they would be abolished.

Prior to 2022, both the major restructurings of the health system had followed changes of governments. In contrast, Little’s restructuring involved only a change in health minister within the same government.

Andrew Little: ‘sacked’ as health minister and heavily demoted in cabinet ranking

Unsurprisingly, this never-signalled restructuring meant that the severe pressures on the health system, including shortages, were allowed to deteriorate. Under Little, health became an electoral liability.

Like Simon Upton and Pete Hodgson before him, he was removed from the portfolio. Unlike them, however, he was also heavily demoted in Cabinet rankings.

Can Ayesha Verrall make a difference?

Bill Birch’s appointment helped save the 1993 election for National; Wyatt Creech’s appointment made a difference but too much electoral damage had been by then; like Creech, David Cunliffe had too little time but did improve relationships in the health system and left enduring legacies.

Ayesha Verrall could make a difference for the better; but will it be enough?

Can Dr Ayesha Verrall’s assumption of the portfolio make a difference? Yes, it can, but not at the macro level. However, she has considerable experience in the health system, strategic successes as associate minister, clinical expertise, intelligence and visible empathy. Cumulatively these bode well for micro-changes that could make an important cumulative difference.

She cannot in eight short months repair the damage to Labour’s credibility in managing the health system. But further damage can be prevented and existing damage can perhaps be mitigated somewhat.

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

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