Minister of Health Andrew Little’s White Paper on the Government’s ‘health reforms’, announced in April, included the unexpected intention to abol ish New Zealand’s district health boards (DHBs), effective 1 July 2022.

DHBs are unsurprisingly largely associated in people’s minds with hospitals. Some would argue that this makes the health system hospital-centric. Not so. Hospitals attach the greater public and media attention because they deal with the most complex, specialised and acute (non-deferrable) cases along with emergencies.

In other words, hospitals are the place of last resort for those cases that can’t be dealt with elsewhere in in the health system. Hospitals are the most integrated part of the health system.

As a consequence hospitals are the part of the system where a sad or bad outcome for patients is more likely to occur and where access is more likely to be delayed or denied. It is not difficult to see how hospitals will continue to function next July: pretty much the same as now (how they might subsequently evolve is another question).

DHBs and community health

While recognised internationally as an asset, an underappreciated role of DHBs is their responsibility for community health which includes primary care delivered largely by general practitioners. DHBs have a geographically defined, integrated, whole-of-population responsibility for both community and hospital healthcare. Their integrated nature makes them relatively advanced organisations in advanced universal health systems.

The abolition of DHBs means hospital and community healthcare will be more structurally separate than at present and a consequential diminishing of integration. Andrew Little’s White Paper would have the DHBs responsibility for the provision of primary care at least transferred to new ‘locality networks’ overseen by the highly centralised ‘Health New Zealand’ (a new national bureaucracy responsible for the funding and provision of healthcare to be established by 1 July 2022).

The Simpson review on localities

The Heather Simpson-led Health and Disability System Review Panel didn’t say much about localities, but it did propose locality plans with indicative budgets for each locality based on age, ethnicity and deprivation.

Locality plans under Simpson would have included:

• health needs assessment results (including unmet need for different services)
• what primary care services would be available to meet these needs and in what settings
• how networks of services would be organised and provided, and by whom
• how access would be enabled
• how specific populations would be served
• the outcomes these activities were expected to achieve for defined populations.

By ‘locality’, Simpson meant a geographically defined area with a population of between 20,000 and 100,000 people, with footprints that make sense for the community being served. Localities could be aligned to council boundaries, iwi rohe or natural borders. PHOs would disappear. Sensibly, presumably to reduce transaction costs, the population analysis currently undertaken by Primary Health Organisations would have been picked up by each locality’s DHB.

The April White Paper keeps Simpson’s localities alive through what it calls ‘locality networks’. But it doesn’t build on the Simpson review in terms of what these might comprise. Instead, there is a generalised, imprecise implementation process.

The most noticeable difference between the Simpson review and the Little White Paper is that the former was based on the continuation of DHBs (albeit fewer of them), whereas the latter is based on their abolition.

Distant relationships

This means a greatly increased distance between the accountable statutory body, the new Health New Zealand, and the locality networks it will be responsible for developing and supporting, including the necessary engagement and understanding of local population health needs. The difference is the expansion of bureaucratic centralism at the expense of closer local engagement.

The Health and Disability Review Transition Unit led by Ernst & Young senior partner Stephen McKernan is vague on an implementation timeframe for primary and community health to be “reorganised” through localities, other than over the “next few years”.

Each locality is to have a consistent range of core services and a locality plan. General practices and other primary care providers are to form part of a wider locality network with “shared goals”. Locality networks may not necessarily have responsibility for geographically defined populations, as DHBs presently do and as the Simpson review envisaged.

‘Health New Zealand’, in partnership with an equally new Māori Health Authority, will be responsible for implementing localities from 1 July next year through phased rolled out tranches, starting with early prototypes. Budget 2021 allocated $45.98 million over four years to develop prototypes and test the locality approach. Of this, $9.6 million is for five to six prototypes in 2021/22, covering about five per cent of the population.

It is clear that the thinking on locality networks is embryonic at best. McKernan himself has acknowledged this, in a recent update from his unit, by advising there is “…still a lot of work to do on designing how localities will operate in practice”. Translation: we haven’t a clue!

Working it out as you go

This ‘working it out as you go’ approach is risky. It means that the centralised ‘Health New Zealand’ is well placed to call the shots at the expense of local engagement, especially at the critical prototype and foundation stages.

It would have been better to have used the advantages of local population knowledge of the DHBs and then, once locality networks were up and running, make a call on the future of DHBs. With such a vacuum of understanding of what might comprise localities and their networks, the abolition of DHBs next year is premature. Unfortunately, common sense isn’t the way of white board warrior business consultants who the government listens to the most.

When cooking meals, chefs start from a recipe. Locality networks have yet to get to the recipe stage. Has Minister Little created an avoidable muddle with his locality networks? We haven’t reached that destination yet. Perhaps we are in a pre-muddle situation.

[This is a revised version of my latest column in New Zealand Doctor Rata Aotearoa published on 21 July]

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.