Powell said the targets had not worked and they needed to be outcomes–based.
"They have led to superficial assessments of how the system has performed, they grossly mislead the public and they have had, especially in the context of underfunding, very perverse outcomes.
"The [Health] Minister, and we would agree with him, is looking more towards things that focus more on improved health outcomes," he said.
Acting Prime Minister Winston Peters said the targets had been a "miserable failure".
"It's not correct to say we've dropped health targets. I just think those health targets were such a miserable failure that we have to find something that works and that's better," Peters told reporters this morning.
Health Minister David Clark said the Ministry of Health had stopped publishing data based on the previous government's targets while other measures were developed.
"The previous government's targets produced perverse incentives leading to what were traditionally cheaper surgeries being performed in more expensive environments. That meant the health dollar was not being spent as wisely as it could be," Clark said.
"I want a health system that has honest and transparent measures, unlike the previous Government, which was pumping up its numbers by counting Avastin injections [used to treat eye disease] and skin lesion removals as surgeries when many could have been done in primary care."
National's health spokesman Michael Woodhouse said the targets drove improvement in areas people cared about - significant increases in elective surgeries and immunisations, faster cancer treatment and improved children's health.
"You can't prove or improve what you don't measure. Clark's claim that more surgeries will be performed is easy to make when there will be no public measure of any increase or decrease in elective surgeries."
The Government has also stopped reporting on the National Patient Flow project, which had been under way since July 2014 and aimed to improve DHBs' referral systems, administration processes and communications with patients to better understand patient outcomes and unmet need.
"These targets not only let us see exactly the kind of difference the money we invested was making for real people, they also gave public servants a clear focus on what they needed to do to improve lives," Woodhouse said.
The move to drop targets and the flow project comes after the Government dropped better public service targets, which measured the performance of the public sector.
