Martin Johnston: Advisers back off forced mergers

The Horn report advocates a more centralised approach for many specialised services. Photo / Kenny Rodger

Health Minister Tony Ryall's razor gang has steered as close as it can to recommending fundamental changes to district health boards.

The elephant in the room of Dr Murray Horn's cost-cutting committee was the question of forcing regional amalgamations among the 21 district health boards.

But offering this to Mr Ryall as the answer to his question of how to cut the numbers of health managers and administrators and strengthen patient services would have overtly trampled on National's election promise not to embark on "another round of restructuring" in health.

Instead, the committee has suggested big structural changes in the centre and middle-sized changes elsewhere, including enforced regional collaboration by DHBs.

The Horn prescription would nationalise the DHBs' payroll, their purchasing of supplies and their planning and funding of some specialised services like heart surgery and children's cancer care.

These national operations would be handled by a new National Health Board, which would also take over the Health Ministry's planning and funding roles (possibly including the cervical screening programme) and the development of IT, the health workforce and hospital-building.

The new board would acquire the ministry's primary-health-care payments division, and the much-reduced ministry would "focus on its core policy and regulatory functions".

Separation of policy advice, funding/planning and service provision was central to National's 1990s health philosophy. They were re-integrated under Labour, which in a failed bid to reduce administrators and managers, scrapped the Health Funding Authority (HFA).

Funding and planning shifted first to the ministry, then progressively, but never entirely, to mini-HFAs in the health boards. Many DHBs set up regional agencies to handle some planning and funding and some have amalgamated their back-office or senior-managerial functions. But none have fully amalgamated, despite encouraging noises from Labour and National health ministers.

Forced DHB amalgamations will probably have to await another election, unless the Horn committee's warnings of unsustainable spending growth in health become an irresistible reason for a "round" of restructuring.

Former Waitemata DHB chief executive Dwayne Crombie, a veteran of National's pre-HFA regional funding authorities, said yesterday New Zealand could ill afford single DHBs dedicated to lightly populated regions like Northland, Wairarapa or the West Coast.

Amalgamations could hitch Northland to Waitemata, and the country needed no more than eight boards in total.

Dr Crombie agreed with the Horn report's call for a more centralised approach in many specialised services. He said this would avoid unnecessary multiplication as had happened with Wellington's paediatric oncology service.

"Auckland [health board] decided how many cardiac catheter theatres they would have and never consulted Counties Manukau or Waitemata on how many and who would pay."

Dr Horn told the Herald part of the rationale for shifting planning and funding of many specialised services to the new national board was that under the current system, boards like Waitemata and Counties, which purchased heart surgery from the Auckland DHB, were passive players, paying prices set by the ministry.