After taking office in October 2017, the Labour-led coalition government, with David Clark as the new health minister, set up a panel to review the health and disability system. Its chair was Heather Simpson.
There was logic behind this appointment.
As a former chief of staff for prime minister Helen Clark, Simpson was intimately familiar with the construction of the Public Health and Disability Services Act, which set up district health boards (DHBs) in January 2001.
Simpson well understood the thinking behind and intentions of this transformational change and the culture that underpinned it.
Her final report was submitted to Clark in March 2020 but, owing to the pandemic, was not published until June that year.
Ardern’s government endorsed it in principle, but held over finalising a position until after the forthcoming election. It went into the election with both the health system and the electorate having every reason to believe that DHBs would continue.
The only unknown was how many there would be – perhaps between eight and 12, down from the existing 20.
The government’s response to putting in place the Simpson review was announced by minister of health Andrew Little in April 2021. There was an implied consistency between the review and Little’s announcement.
However, the surprise decision to abolish all the DHBs proves that wasn't the case.
What was being abolished was not just 20 local structures. It was abolishing how the whole system of delivering local community and hospital healthcare worked.
Abolishing DHBs overturned a relationship between local and central government that had existed since the start of New Zealand’s universal health system in 1938.
The difference between the Simpson review and the Little announcement can be summed up by two ‘c’ words – cohesion and control. The implications of these two simple words were huge.
The Simpson review saw DHBs continuing as the critical statutory bodies delivering healthcare services to their populations. It recognised that overwhelmingly, healthcare was delivered locally, largely in general practices and hospitals.
DHBs had a level of statutory authority to make sure this healthcare was provided. They also had to know well the health needs of their geographically defined populations.
The review also spotted a serious problem with the health system – a lack of cohesion. This was a fair assessment.
Like many others, I thought that DHBs overall did well, given funding and other constraints. But there was a missing piece – cohesion, especially at a national level.
DHBs did, in fact, have a good go at improving cohesiveness. There was a high level of regional collaboration. But progress nationally was often hindered by government policy changes and the health ministry’s top-down culture.
The DHBs started promising work on a national electronic patient record system. But this was prevented at a national level by obstructive changing decision-making.
Despite this uncertain environment, however, a shared electronic patient record was developed by the five South Island DHBs – an impressive achievement, given the circumstances.
The Simpson review’s solution was to first recommend transferring the central government funding and planning responsibilities from the health ministry to a new national body, Health NZ.
Second, it recommended a transparent structural connection between this new body and DHBs, both nationally and regionally. But there was no suggestion of removing the existing role of DHBs.
Following the public release of the Simpson review, I questioned both the need to set up a new national body and the logic behind reducing the number of DHBs. After all, why not strengthen the capabilities of the ministry and change the culture of its top leadership?
I still hold this view, but this new structural connection between the ‘centre’ and DHBs had merit. Subject to the right culture, it could lead to better cohesion.
Simpson and localities
An interesting part of the Simpson review was the setting up of smaller population-based 'localities'. It was inspired by a promising localities initiative of MidCentral DHB. Over time, localities would, the review hoped, replace the primary care organisations (PHOs).
DHBs would then take over the organisational functions of PHOs (including funding allocation, data analysis and administration), as had already been done successfully at the South Canterbury DHB.
Localities would be like networks, resourced and supported by their DHBs. This would be a partnership, rather than a hierarchy. They would work together developing locality plans for the health needs of their populations. I thought this initiative sounded good.
A new ‘c’ word: control
So, how did minister Little’s announcement depart from the Simpson review?
First, it overturned the review’s support for continuing with DHBs and abandoned the principle of subsidiarity, which had been the cornerstone of our universal health system for 84 years. Subsidiarity is a system where a central authority has a subsidiary function, performing only tasks which can't be done at a more local level.
Second, it radically changed the role of the proposed Health NZ body by giving it the huge extra responsibility for providing, configuring and delivering local healthcare that had previously been done by locally based DHBs.
Third, it turned upside-down the nature of the proposed localities. From working side by side as partners, their basis changed to working under a hierarchical control structure.
Finally, with the absence of a change in the culture to underpin this overhaul, it allowed the restructuring to set up its own culture. This was to make an already-centralised system even more centralised.
In other words, a culture of control now prevails. The Simpson review was about cohesion. The restructuring that was supposed to be about putting it in place has proven to be about control.
Coupled with a failure to tackle severe health workforce shortages, this change explains a lot of the precarious position the wider health system now finds itself in.
The government’s restructuring led to an increased control culture in our health system. It is that culture that's become the greatest obstacle to the health system getting out of this precarious position.