Implementing the New Zealand Health and Disability System review not only involves major technical problems but creates fascinating political tensions.

The government is promising to redisorganise the health and disability system. Why it is proposing to do so is unclear. The underlying report, New Zealand Health and Disability System (NZHDS) Review (the Simpson Report), tells them what it should do. However, so typical of New Zealand policy reports, it focuses on solutions and does not say what the problem is, what the context is, nor how the proposed solution addresses the problem. This opaqueness (or is it muddle?) makes its proposals very hard to criticise in a constructive way.

There has long been a tension in our health system between generic and professional management. We may be very glad that the professionals were in charge during the Covid Crisis but they are not necessarily as well involved in the management of the health system.

The issue was well illustrated in the recent difficulties faced by the Canterbury District Health Board, the second largest in the country. Trying to deal with a huge financial deficit caused by delayed essential major capital works (managed by the Ministry of Health) resulted in resignations by the CDHB chief executive and most of the executive leadership team, following a clash with the government-appointed board chair and a Crown monitor.

Ian Powell described the cultural clash between the two sides as ‘CDHB’s leadership was from the school of low-transaction-cost relational decision-making’ whereas the board chair and monitor were from ‘the opposite school of high-transaction-cost contractualism and managerialism’. Instructively, once the executive leadership team had been broken up, the central government resolved the deficit crisis. Those responsible for their departure remain.

(Powell was, until recently, Executive Director of the Association of Salaried Medical Specialists, the professional union representing senior doctors and dentists in New Zealand. His 30 plus years’ experience of the health system is more than anyone on the review committee had. His blog is here. More of his views here.)

As best as I can fathom, the framework of the NZHDS review is that of top-down contractualism and managerialism. There is a long history of this approach going back to at least the 1989 Gibbs report which led to the hyper-disastrous redisorganisation of the early 1990s. It argued, without evidence, that the health system was failing but that better management would result in major productivity gains. If only we could control these damned health professionals, everything would be fine.

Will this government implement the NZHDS review or, rather, what parts of it will implement – for it has already made promises to implement some? In many ways the more important issue is the Powell one. Will it be about relational decision-making or contractualism and managerialism? More simply, will it focus on the the patients or finances?

The good news is that we have a new minister of health, Andrew Little, with a background as secretary of E Tu (once the Engineers Union) with its long commitment to constructive worker involvement in management. On the other hand, he may be captured by the Ministry of Health, which under his predecessor, David Clark, seems to have been dominated by generic managerialism.

Politics is another key factor. The NZHDS review proposed to reduce the number of DHBs and eliminate elected representatives from their boards of management. The approach reeks of centralism.

There is a case for making a handful of our existing DHBs tertiary health centres with the most advanced medical technologies and clusters of specialists. Because they need to be closely associated with medical schools, there would be only five of them. Around them would be a set of satellite DHBs (perhaps the existing ones) with secondary-level healthcare responsibilities (and primary ones), which would have a professionally cooperative relationship with the tertiary centre. (The West Coast DHB is never going to have a brain surgery team so neurological services are supplied from Christchurch.) This has been developing organically in recent years; let’s continue rather disrupt the trend.

I have never been enthusiastic about the elected members on health boards. Most do not have the management skills and in any case there is hardly any opportunity for democratic input into the system at this point. Where democracy has a role is monitoring management.

That needs separate agencies analogous to the historical practice of public visitors who dealt with hospital patient complaints. The agencies would not be concerned with individual professional failures; we have the Health and Disability Commissioner and professional tribunals for that. But there is much less remedy for where the system has failed; a common one is where services interface badly. The ‘Visitors Councils’ would be elected on a local basis so that each small area would know who he or she was, whom they could complain to.

The centre and its generic managers will be upset by such quality supervision. It would be holding the management system to account and we cannot have that. Even more dangerously for the centre, it would set up a democratic lobby for increasing public health spending – and we certainly cannot have that either. Better to disenfranchise the public.

The politics is different. There is going to be a public outcry over downgrading local hospitals. (While the health redisorganisation of the 1990s increased the number of boards in order to increase competition, a political concern was that the previous centralisation had meant that many areas – notably South Auckland – were given poor service.)

The government may well face another public revolt. In 1975 doctors were actively lobbying their patients against the White Paper on Health; it probably cost the Rowling Labour Government votes and seats. Ironically the proposals in the White Paper, which were not stupid, were subsequently implemented covertly.

Jim Bolger attributed National’s dramatic loss of votes in 1993 to the health redisorganisation based on the Gibbs Report. (He only retained power because dissent was split among the Alliance, Labour and NZ First; that would not have happened under MMP.)

Political resistance is likely to occur again. National’s spokesperson on health is Shane Reti, previously a GP in Whangarei (the Northland DHB will almost certainly be abolished under the NZHDS review proposals). As deputy leader, he is ideally placed to lead the charge against any downgrading of provincial healthcare. If the government goes ahead with the Simpson proposals, recently elected provincial Labour MPs should start looking for new jobs after 2023; they wont all be high enough on the party list.

Which suggests that Little will not go ahead with all of the NZHDS review proposals. The danger is that without a clear analysis the outcome will be another botch-job.

(Two earlier Pundit columns of the Simpson report are Centralising Health Care and Designing A Health System For Health Care Delivery.)