Dialogue: Health rethink bogged down by bureaucracy

By GERRY WALMISLEY*

Little has been said about the impact of the Government's changes to health purchasing. Possibly this is because the model put forward, that of scrapping the Health Funding Authority and replacing it with 21 locally elected district health boards, sounds quite good. But it is also possible that service providers are too frightened of the consequences to enter into rigorous debate, let alone speak out against the model's worst aspects.

Whatever the reasons, we need to be clear that this model, while attractive to health strategists and academics, is naive and optimistic.

The Health Funding Authority grew out of the debacle of a competitive purchasing model managed by four regional health authorities. It had a national role to plan for health needs and to buy services in a transparent and less competitive manner. Competition, where it did exist, was rightly focused on the level of innovation and health gain to be achieved rather than the relative cost of proposals.

While not without its critics, the authority was beginning to come to grips with that most difficult of decisions, the best use of limited resources. What was emerging was a model that was internationally unique and admired by virtually all Western nations.

This Government needed a different brand and health, of course, was one of its key platforms. However, its brand will create 21 purchase authorities which will run little differently than the regional authorities that were previously so troublesome.

Instead of four competing regional authorities, we will have 21 competing district health boards, cooperating with each other and the Ministry of Health only on the margins and forming a series of tightly controlled buying cabals ostensibly representing local needs.

Why will this come about?

It is obvious the Government has no real idea about the changes that have occurred in health service delivery over the past 10 years and that they wish to return to the good old days of hospital boards with democratically elected membership.

It seems to believe that such structures, together with the extra responsibility of buying services throughout their regions, will introduce innovative solutions to local problems.

Nothing will be further from the truth.

Over the past decade, New Zealand had seen the development of hugely innovative methods of delivering health care. Nowhere is this more so than in the non-government sector and especially in the services delivered by Maori and in community mental health.

Unlike most countries, New Zealand has a substantial and largely well-funded non-government sector. In mental health, nearly 30 per cent of total mental health spending, for example, is contracted to non-government organisations.

It is probable that the Government is unaware of the size and expertise of the non-government sector because the focus of reform has been on hospital-led services. Whether this was the Government's intention is unclear, but it is certainly the result. An expectation that the ministry will somehow control the parochialism of the new district boards will make little difference to the outcome.

What we will see is hospital-based district boards trying to squeeze out the smaller non-government providers and contract for services (if they do, indeed, decide to do so) with larger and more robust community organisations. While this makes a degree of sense for accountants and bureaucrats, it does not acknowledge the impact that the many non-government organisations have on health and well-being.

In Canterbury alone the Health Funding Authority manages around 700 contracts for health services. While many of these are held by single providers, there are still several hundred service providers overall. These range from small, stand-alone community services, such as drop-in centres, through to large, national non-government providers to hospital-based contracting and public health initiatives.

Even in this early stage of the reform process, it is plain that the district boards are beginning to carve out their own areas. Contrary to the Government's wish, it is also clear that most existing hospital and health service structures see the changes simply as the addition of a buying arm to manage a population-based budget.

It is also becoming obvious that the new district boards do not want to work closely with other providers and that many see the changes as an opportunity to extend their fiefdoms and absorb contracts that are managed by non-hospital organisations. The days of the small community provider are limited indeed.

What appears to have been overlooked in this process has been the human factor and the skill and knowledge base of the Health Funding Authority.

The human factor will become truly extant once we see the eventual form of the 21 district boards. Each will have to establish a purchasing function and along with this, systems and analysts to determine health priorities.

As well, we have to expect district boards to basically compete with themselves for health money. If, indeed, they are to buy non-hospital services, where is the incentive to buy from alternate providers?

The mere fact that the new structure has elected representatives is not enough to prevent funds being directed into hospital and health services (and deficit servicing) first, at the expense of the real innovators in the non-government sector.

This is particularly unfortunate in the mental health area where most care is community-based. Non-hospital services are concerned with processes that support people to independence and autonomy whereas hospitals correctly focus on specialist and acute interventions. However, such specialist areas are resource-hungry and it does not require much imagination to understand that district boards will mainly fund such high-profile areas.

It is a tragedy that we have effectively thrown out the baby with the bathwater. In its pursuit of a point of difference, the Government has not recognised the complexities of health care delivery. It has adopted a naive and sentimental model of health care which most countries have discarded as unworkable.

It is a model which sounds good, but the reality is that a burgeoning bureaucracy will bog down health services as never before. The spirit of innovation will be stifled or extinguished and health service development will become simply an extension of hospitalisation.

In mental health this will be disastrous as client choice, national standards and a pursuit of excellence are subsumed into a bureaucratic ideal.

It is not too late to introduce some reality and common sense into the equation and the Government must work closely with all sectors of the health service, large and small, mainstream and Maori, to ensure equitable and effective health care.

The district board model will not work. It is about time this fact was faced and we moved quickly to ensure that the expertise, organisation, knowledge and pragmatism of the Health Funding Authority is not swallowed up in a nightmare of conflicting and politicised agendas.

* Gerry Walmisley is the chief executive of the Richmond Fellowship, a non-government health services provider.