80 years of failed health reforms – can Health NZ break the mould?


The Government will reform New Zealand’s entire health system and scrap DHBs, but experts question whether these changes will properly address the issues in our healthcare industry

More than eight decades of health reform have failed, and the current landscape of public and private healthcare interests is unstable, say New Zealand researchers Murray Horn and Des Gorman. Future reform must improve equality of access and outcome, they say.

These proved to be key drivers behind the health sector reforms announced today by Health Minister Andrew Little.

“We will do away with duplication and unnecessary bureaucracy between regions, so that our health workers can do what they do best – keep people well,” says Little.

“The reforms will mean that for the first time, we will have a truly national health system, and the kind of treatment people get will no longer be determined by where they live.”

Overview of reforms

  • All DHBs replaced by one national organisation, Health New Zealand. It will be responsible for running hospitals and commissioning primary and community health services. It will have four regional divisions, and a district or locality branches at local levels
  • Responsibility for public health issues will rest with a new Public Health Authority
  • A new Māori Health Authority will have the power to commission health services, monitor the state of Māori health and develop policy
  • Strengthened Ministry of Health will monitor performance and advise Government

The changes are in response to the Health and Disability System Review (HDSR), which found the public health system was under stress and that a greater emphasis on primary healthcare had the greatest potential to improve New Zealanders’ health.

“The reforms herald a change in focus for the health system – we will treat people before they get sick so they don’t need to go to hospital, thereby taking the pressure off hospitals,” Little says.

“The reforms will also ensure the system is able to cope with the effects of an ageing population and respond more quickly to public health crises like the COVID-19 pandemic.”

“It is important to shift the focus of the health system to prevention,” Associate Health Minister Ayesha Verrall adds.

“A Ministry of Health with strengthened expertise and a strategic focus will mean we can address our long-standing challenges like diabetes, cancer and heart disease,” she says.

“We are also building on the lessons learnt from COVID-19 with a new Public Health Agency providing the technical expertise in the Ministry, and Public Health Units acting as a joined-up national service, so we are better equipped to fight future outbreaks and pandemics.”

Associate Health Minister (Māori Health) Peeni Henare says New Zealand’s health system has significant issues delivering for Māori who continue to lag behind in key health status indicators.

“We will legislate for a new independent voice – the Māori Health Authority – to drive hauora Māori and lead the system to make real change,” Henare says.

“It will have joint decision-making rights to agree national strategies, policies and plans that affect Māori at all levels of the system and it will work in partnership with Health New Zealand to ensure that service plans and the commissioning of health services drives improvement.”

The Government says the reforms will be phased in over three years, to make sure existing services – including the rollout of the COVID-19 vaccination programme – are not disrupted.

Do the changes go far enough?

University of Otago Professor Michael Baker would have preferred to see a more independent, stand-alone public health agency combined with the national public health service and health promotion agency to provide a strong voice for public health across New Zealand.

“However, these reforms go a long way to achieving that need,” he says.

“But its success will depend on implementation and resources. As we have seen with the Covid-19 response, a key need is to build sufficient public health infrastructure to meet current and predicted needs.

“One example is the requirement to attract and retain a sufficient critical mass of public health science expertise so that New Zealand can keep ahead of pandemics and other global health threats.”

University of Canterbury Associate Professor Arindam Basu adds that there are opportunities and challenges worth considering.

“The administration is simplified by doing away with 20 different organisational elements – the abolition of DHBs. But such centralisation also carries with it the potential to become a complex monolith, and risks losing the efficiency that each individual unit might provide in a federated system.”

“Abolishing DHBs to establish a unified NHS-UK style centralised system, with parallel arms for Māori health and public health systems, may also have important implications for costs. How the cost to care will play out for payers and patients is a space to watch,” Basu says.

“The creation of localities as the unit of health service delivery across NZ has enormous potential to increase local input into how health services are provided in all communities,” says University of Otago’s Dr Carol Atmore.

“This is potentially a game changer for smaller rural communities, but as with all these things, the devil will be in the detail.”

“How will localities be defined, and by whom? Who will lead them? How will the final locality plans be developed? How will the Health NZ and Māori Health Authority commission services to meet the locality plans? Once these things become clear then the opportunities and fish hooks will become clearer.

“The health system is perfectly designed to produce what we currently have, and what we currently have doesn’t meet the needs of Māori or of many rural communities. So I’m optimistic about the potential the new system can bring, but there is a lot of work to be done to bring it to life.

“The issue of primary care funding needing to be increased has not been addressed yet, and this will be a key part of getting the future system right as well,” Atmore says.

“The announcement of a legislated Māori Health Authority that has the teeth to monitor Māori health outcomes is significant,” says AUT University Associate Professor Jacquie Kidd.

“Our research with remote Māori communities has highlighted the importance of local solutions to health issues, and has documented the widespread mistrust of the health system by whānau.

“This new structure must fully engage with whānau to ensure that trust is carefully established and nurtured, and that national health agendas do not overtake those of hapū and whānau.

“The announcement also included reference to decision making in partnership with HealthNZ, which embodies Te Tiriti o Waitangi in terms of tino rangatiratanga and ōritetanga. Overall the announcement is very welcome and, if fully realised, will address the pervasive health disparities experienced by Māori,” Kidd says.

Time for healthcare to go digital

“The revamp of the public health service is an opportunity for industry to create and implement digital tools that will help the health system and reduce inequity for all Kiwis,” NZ Health IT (NZHIT) chair Kate Reid says.

“The major health system refit is the beginning of a new era and a golden opportunity to transform delivery of health services in Aotearoa by adopting digital technology.

“Digital tech will enable the system, specialists, surgeons, consultants, doctors and nurses to get closer to patients. Virtual healthcare can include triaging and consults over the phone, by email or video and all three must be deployed by GPs to be effective.

“We need an immediate uptake of virtual healthcare services to a new national health system,” Reid says.

A NZHIT report says healthcare has yet to undergo the consumer driven digital revolution that has taken place in many other industries, for example retail, travel, and banking.

The report makes a series of suggestions how to improve digital health in Aotearoa:

  • Provide programmes to improve the digital literacy and skills of the entire health workforce
  • Provide clear pathways for the health workforce to engage in digital roles
  • Prioritise digital education within the syllabuses of all clinical training
  • Reward on-the-job digital capability skills uplift through professional development and foster clinical industry internships or job placements
  • Invest in digital solutions to enable more effective models of care that enable consumer choice, flexibility and informed decision making
  • Provide all New Zealanders with easy access to information relating to their specific health status
  • Ensure all consumer facing digital investments are secure, certified, and digitally inclusive
  • Create a strong international brand for New Zealand as a leader in digital health
  • Promote our digital health companies in offshore markets, both individually and collectively.

“Increasingly, our healthcare providers will be constrained by an ageing workforce and their ability to attract staff, because they are unable to offer a digital environment that is becoming the international norm,” Reid continues.

“Many senior managers have little understanding of the potential and the increasingly important role of digital technology in healthcare. New digital approaches to clinical decision support are not being prioritised because their potential is poorly understood.

“Yet the pandemic has shown us just how important digital tech is to our health, wellbeing and economy. Unprecedented measures must be taken as New Zealand is sailing into substantial health changes in a fast-changing tech world.

“We want to define the direction for health tech for at least the next five years so there’s a unified approach to contributing towards achieving full tech enablement.

“Digital health technology is reshaping all of our lives. In 10 years’ time, people won’t believe you had to ring to make an appointment then sit in a waiting room for 45 minutes with all the associated risks this entails.”