No more ‘more of the same’: Minister stares into health sector’s gaping abyss

The challenge is to balance the imperatives of economies of scale with local responsiveness and capacity for collaboration

Health minister David Clark’s announcement last month of a review of New Zealand’s health sector opens a new chapter in health policy in this country.

This particular review, to be led by Heather Simpson, is both welcome and timely. But any attempt to reorient the aims and architecture of a health system will face fundamental policy dilemmas.

The first relates to scope: whether this should be “big bang” reform or incremental tweaking.

Big-bang reform that starts with a blank sheet of paper is highly destabilising (not always a bad thing) and highly risky, and rarely achieves the expectations of its creators.

Incremental reform might promise a more gradual and consolidated pathway towards better health systems, but might also amount to a series of small steps going around in circles, without a clear direction of travel.

New Zealand health policy has experienced both these pathologies in the past 30 years. Will the review find the sweet spot in the middle?

The second dilemma is whose views should be sought out and considered. Will the review seek the input of professional groups? If so, what will be the role of the Association of Salaried Medical Specialists, and the newly formed Primary Health Federation? To what extent will constituencies such as Māori providers be consulted?

Consult too many groups, and you run the risk of developing a bland compromise solution that no one is enthused about. Consult too few, and you may miss vital information and undermine the chances of successful implementation.

The third dilemma lies in what can be learned from other health systems.

New Zealand is not the only country that debates the structure of its health system. We can learn many lessons from similar jurisdictions – in particular, tax-funded systems with similar population sizes. The best places to look are Scotland, Denmark and Canadian provinces and, perhaps, some Australian states.

In Denmark and Canada, the trend of the past 10 years has been toward more centralised models. If the review considers moving in that direction, understanding how these reforms have played out will be important. However, every country has a unique history, and ideas that work elsewhere do not always translate into different contexts.

The right scale of public sector health organisations is the fourth dilemma facing this review.

Front of mind in the sector and the media is the number of DHBs. The starting assumption here should be that there is no such thing as an optimal scale of organisations that applies to all healthcare services.

The challenge is to balance, on the one hand, the imperatives of economies of scale and management/analytical capacity (which would suggest fewer organisations) with, on the other, local responsiveness and capacity for collaborative, inter-organisational relationships (more organisations).

Any reduction in DHB numbers would fundamentally affect DHB–PHO relations. Unless PHOs, too, were rationalised, reduction would leave larger districts with multiple PHOs. This could change the balance of power, and lead to a more hierarchical relationship between DHBs and PHOs. Alternatively, it could encourage a different type of intra-sectoral collaboration.

How to rebalance primary and hospital care is a fifth dilemma.

In most health systems, resources tend to be funnelled towards hospitals at a faster rate than they are towards primary care.

For the past 15 years, resourcing for primary care has plateaued or decreased per capita, and has been harder hit than secondary and tertiary care.

The current DHB system arguably strengthens the position of specialists and hospitals vis-à-vis primary care.

This leaves us pondering whether there is an alternative system design that will rebalance primary care and hospitals, or whether the “force of gravity” is a feature of all health systems, regardless of design.

The terms of reference of this review outline a number of other nettles that may or may not have to be grasped, including accountability arrangements, flexibility of funding and inequities of access and health outcomes.

Heather Simpson’s track record as an architect of health policy reforms in 2000/01 suggests a few pointers.

We can expect the review recommendations to be detailed, the process will take place away from media and public scrutiny, and considerable control will be exerted over the nature and extent of stakeholder involvement.

The minister and the Government will then have to decide whether to incorporate recommendations into policy.

Any changes can be expected to start in 2020 – an election year. This is important because, without a degree of cross-party support that includes National, the review’s recommendations will likely become an election issue.

The differences between Labour and National on many of the issues defined in the terms of reference are not so large as to rule out a cross-party strategy. However, parties in power rarely want to give up the opportunity to make their distinct mark on policy, so don’t hold your breath.

Tim Tenbensel is head of the health systems group at the University of Auckland