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Cabinet papers on health sector changes

1 August 2000 Media Statement

Cabinet papers on health sector changes

Health Minister Annette King today released a further series of 19 Cabinet papers on changes in the health sector, and said they would give New Zealanders an increasingly clear picture of how the new system would look and work.

Mrs King said the release of the papers would help New Zealanders understand the New Zealand Public Health and Disability Bill, tabled in Parliament yesterday.

"These papers show how our vision for a new public health and disability service in New Zealand will be translated into reality."

One paper confirms a Health Workforce Advisory Committee will be established to advise on health and disability workforce issues. "The committee will advise me how best to ensure there is an adequate, appropriately-trained workforce to meet current and emerging health and disability sector needs," she said.

The committee would work with the Ministry of Health, the new District Health Boards (DHBs) and other agencies such as the Mental Health Commission and education and training providers. "This will ensure its independent advice is coordinated with the work of the other agencies."

Mrs King said a key change from the current health system would be that DHBs would be exempt from tax. "This reflects the not-for-profit approach that DHBs should be taking and will ensure boards are focussing on provision of services rather than managing tax liabilities."

Because of the Government's key interest in hospital assets, and the fact that decisions impacted on communities for long periods, DHBs would be required to seek approval from the Health and Finance Ministers for significant investment in, or sale of, assets, she said. There would also be extra planning requirements to ensure hospitals were appropriately maintained to provide high quality services.

DHBs would face a capital charge to help ensure they made decisions that provided the best value for money. "This will ensure they recognise the cost of capital in their investment and financing decisions, and that they do not over-build hospital capacity or over-invest in assets. "We need to make it clear to DHB managers that community-based services can often be more effective in closing the gaps in health.


"The Government has also made a decision in principle that the Government, rather than the private sector, will lend funds to DHBs for large capital investments such as new hospitals. This decision reflects the Government's desire to ensure assets are managed in the best way possible. DHBs will still be able to borrow from the private sector for day-to-day cash needs, and existing obligations of HHS debt will continue to be met."

Another paper relates to options in the future for conducting investigations and inquiries once the New Zealand Public Health and Disability Bill is passed.

"We don't want to limit our options. The circumstances of each inquiry vary and the best procedure must be adopted in each case. Therefore, it is important there is a range of options open to Ministers for inquiry procedures," Mrs King said.

"This means Ministers can select the most appropriate option, taking into account the issue under consideration, the need for a timely resolution, public transparency and other issues specific to each case."

Mrs King said options such as commissions of Inquiry, Royal Commissions and the use of formally negotiated accountability arrangements between the Minister and District Health Boards would also continue to be available.

Another paper establishes a specific unit, set up within the Ministry of Health, to assist Hospital and Health Service (HHS) boards make the transition to DHBs. The team, of existing Ministry and Health Funding Authority staff, will support the HHS Boards as they prepare for a wider, population-focused role.

Cabinet papers are available on the Minster's website: www.executive.govt.nz/minister/king.

ENDS

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