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Health Reforms Heading For Trouble

The Government's health reforms look to be heading for trouble if the widely held concerns heard at the select committee come to pass, National Health spokesperson Wyatt Creech said today.

"There is widespread fear that the restructuring will lead to increased bureaucracy and costs, and there are similar concerns about duplication and fragmentation of services.

"The select committee has had a clear message there's no appetite for this major structural change. National's minority report on the health legislation sets out the concerns from submissioners - including the Alliance.

"The poor handling of the Treaty of Waitangi clause with a major back down on it and the mana-whenua issue have hurt race-relations.

"National warned at the outset that including the Treaty in this legislation in the way it did would never work. Such a clause wasn't needed to address poor Maori health statistics.

"Maori will be deeply disappointed that the Government raised expectations at the outset with its Treaty policy, and has now backed off. The rest of New Zealand will be worried that the Government was willing to go down the track in the first place.

"Labour's John Tamihere can chalk the mana-whenua changes up as an achievement. They're a major blow to Tariana Turia. The Prime Minister's dumped on her. She's become a classic case of someone entering Parliament with high ideals and back tracking once they're a Minister.

"The Government members have censored National's minority report. The full version is attached and available on

"The Parliament has received strong warnings and detailed concerns about the impact of the legislation on our health system. The Government's ignoring these detailed fears.

"What we've now got is a Government ploughing on with health restructuring against the advice of almost everyone involved."

Ends Full minority report attached

NZ Public Health and Disability Bill Minority Report of Health Select Committee National MPs Tuesday 14 November 2000

The minority (National Party) members of the Committee listened carefully to the submissions on the New Zealand Public Health and Disability Bill. While obviously known to have a different philosophical approach to the Government on this legislation, the National minority adopted an open approach to submitter's comments. Certain clear themes emerged.

While there was general support for a more collaborative approach in health, it was generally conceded that the health system had been moving to that focus in any event over the last few years. The new Bill acts on the premise that the competitive model of the delivery of health care is still in place. This model was removed in 1996 and this bill has not recognised the significant improvements that have occurred in health delivery over the last ten years. Further there was criticism from a number of submitters (including the Alliance Party) at what was seen as undue haste in the implementation of this legislation. The fear expressed was that undue haste would mean that a less than properly considered law governing the heath system structure would negatively affect the performance of the health sector.

The funder/provider split that accompanied that previous health system model and the importance of national consistency for health delivery in this country of only 3.8million needs in the view of the minority to be recognised. Having a central funding agency allowed this to occur. With finite resources and infinite demand the funder/provider split provided a key financial discipline. Absorbing the HFA into the Ministry will lose this key requirement. Many submitters made reference to the need for national consistency in New Zealand health delivery systems. While local communities want input into health structures, a significant group of submitters felt there is no mandate for wholesale radical restructuring of the health sector.

What was particularly striking was that there was no enthusiasm for the structural changes proposed by this Bill from any quarter. In fact, reservations about the lack of national consistency, increased bureaucracy, confused accountability, secondary dominance, DHB favouritism of themselves as service provider over more effective non public providers (including NGOs and Mäori providers), fragmentation flowing from twenty one potentially different purchasing agents, need for both a regional and national service delivery tier for services it make sense to deliver at those levels, lack of ability for genuine community input in key areas, and similar thoughts flowed through the comments of submitters generally. These concerns appear justified and are certainly shared by the minority.

The concerns heard related to the fact that the new system proposed by this Bill appears to rely on high-level strategies to give national consistency to health delivery. While strategies can set directions, it is unlikely they will translate into local nationally consistent goals and objectives. We heard from many submitters like the Disabled Persons Association and Aids Foundation who are extremely worried that district health boards will not have the expertise in their area to understand the over-arching needs of certain sectors of the health community. Local interpretation of high-level strategies will vary. As pointed out further on in this report we have reservations about how the Crown funding agreement will be used. Certainly we do not support the introduction of 21 district health boards and see this as a huge duplication of service, increasing bureaucracy and administration costs. In our view, the bill needs to have more explicit criteria to allow for and incentivize district health boards into purchasing regional and national services.

A number of submitters, including Mäori groups (e.g. Ngati Porou) called for the gains that they had made in recent years in controlling their own services to remain as is. They saw real risks that the significant gains made being lost. Likewise there were submissions we believe should have been taken up that called for the inclusion of provisions to prescribe a transparent and contestable process for selecting providers to stop DHB dominance.

Major issues raised included the role of the Treaty of Waitangi in social legislation. The National Party did not support the inclusion of a Treaty Clause in social legislation from the start. We listened to the submissions carefully. After fully considering the issues involved, we remain of a consistent view on this matter. Treaty references should not be included in social legislation.

Submissions came from both sides on the Treaty references issue, both strongly for and strongly against. There was a distinct confusion as to what this clause as drafted would mean. Many called for more specific definition. Mäori generally saw the inclusion of the clauses as written (clause (3) and (4)) as indicative of commitment to Mäori although as pointed out above they also gave credit for real gains in recent years under the structure of the health system being replaced by this Bill (HFA etc.). Those opposing the inclusion of the Treaty clauses saw them as racially divisive and creating the potential for Mäori to receive a preference in access to health services based solely on race. One very carefully considered submission from the Race Relations Conciliator pointed out concern that this approach was likely to worsen race relations in New Zealand.

The clause as rewritten by the Labour/Alliance majority of the Committee will satisfy no submitters. It represents a huge watering down of the position put in the Bill and considered by submitters in that the Treaty is no longer mentioned at all in clause 3. In clause 4 the reference is no longer a generic commitment but merely notes that Part 3 of the Bill provides mechanisms to enable Mäori to contribute to decision making on and to participate in the delivery of heath and disability services.

The concept of "mana whenua" was controversial, but generally welcomed if not universally understood in the same way by most Mäori submitters. Those expressing support for the concept frequently complained of experiences where their own status in this regard was not properly recognised. The Waipareira Trust and Labour MP John Tamihere expressed opposition to the mana whenua concept in the Bill on account of it not reflecting the modern situation of Mäori in New Zealand although most Mäori submitters were in favour of the concept.

Having raised expectations so high with the original inclusion of this provision and the Treaty clauses, the removal of these clauses now by the Labour/Alliance majority of the Committee will deeply disappoint many Mäori.

Submitters expressed real concern at the way the Bill proposed to deal with surplus public hospital land, be it trust or Crown endowment. The minority notes its view that suitable mechanisms are required to remove surplus land from hospital ownership, but that the disposal of land should be managed in a way that is sensitive to local community concerns. The history is such that treating the land without such consideration understandably will invite a strong local adverse reaction. The minority took the view that RHMU should be used as a transitional vehicle and facilitated change to the legislation to advance that approach. The Minister would be well advised to use these provisions as intended.

There were some important suggestions expressed to the Committee that in the view of the minority should have been taken up. Unfortunately, the majority did not share that view. One example was the submission from the Deans of New Zealand's Schools of Medicine. They sought recognition of certain DHBs as teaching hospitals so that the necessary contribution of clinical experience to the training of health professionals is seen as a fundamental part of the structure of the health system.

Debate also flowed around the new provisions governing inquiries. Little justification was provided for these changes, the only submissions on them being opposed. Although changes that improve these provisions were agreed by the Committee, they are insufficient to deal with the real concerns. The minority is therefore not satisfied with them. There is a clear natural justice issue involved; it is wrong in principle for the key adviser to the Minister that has significant powers with regard to depth and intensity of inquiries, to be a party to the inquiry itself.

The minority shares the concern of submitters with the potential lack of public involvement in real decision making resulting from a lack of requirement to consult on the annual plan. While noting Ministry advice that consultation at this phase may be used by DHBs for "gaming" (in essence, building a DHBs case for funding by raising local public pressure prior to opening negotiations with the Ministry in their annual funding appropriation round), the minority were concerned at the extent that the Ministry propose to use funding agreements to achieve what could only be described as broader policy goals. The lack of ability for public involvement in those considerations not only goes against the philosophy of this Bill, it will sooner or later cause considerable local public concern. The minority also were concerned at "gaps" in the proposal - areas of important concern that officials advised had still not been resolved. An example was the allocation of responsibility for payment services provided for residents of one DHB in another DHB.

Numerous small confusions were addressed by the Select Committee considerations. There was confusion between the governance and the management role of the proposed DHBs. Following submitters' views, the Select Committee saw them as covering the governance function but the language of the Bill less clearly made that point. The structure for the health system introduced by this Bill creates three statutory committees for each DHB. While the Committee agreed to recommend a small change to the Hospital Governance Advisory Committee (it is now known as the Hospital Advisory Committee) this did not go far enough to address the concerns of submitters. Many felt that their particular interest was not covered by this approach and wanted more committees formally required to be appointed. Given the different size and complexity of issues in the various DHB districts up and down New Zealand, in a practical sense it would be impossible to pick up all such requests.

A considerable number of submissions were received on advisory committees. Many felt that these committees confuse the role and responsibility of the district health boards. Submitters felt the ability of the district health boards to devolve responsibility and decision-making to these committees has the potential to reduce the accountability of the district health boards. The addition of three statutory advisory committees for 21 district health boards increases bureaucracy and costs, and they have the potential to decrease district health board local accountability. The function of district health boards should be expanded to be able to seek appropriate advice, as required, and short term committees with specific aims could be set up.

After careful consideration, the minority took the view that a more flexible approach in which each DHB determined the range of advisory committees it would need to serve their population would be the appropriate arrangement. This had in the view of the minority the added advantage of clearly placing responsibility for all decisions made by a DHB for its population with the DHBs themselves. This would remove the confusion currently surrounding the statutory advisory committees in the minds of submitters, who feared the delegation powers given to DHBs would mean that responsibility for major decisions could be handed over to what are called (and indeed are supposed to be) advisory committees. We believe there should be no advisory committees.

Another area of considerable concern was the electoral provisions. There was widespread concern, especially noted from rural and provincial areas, that the proposed system will leave them seriously under-represented. While the Local Elections and Polls Act 1976 is under review by Parliament, it is difficult to make recommendations about how the district health board electoral system should be run in the longer term. The aim must be to avoid confusion, reduce costs and ensure adequate community representation. Local body and district health board voting systems should be the same. We support the submission of Federated Farmers. The use of a ward system while first-past-the-post is used will ensure adequate community representation from all areas covered by a district health board. We recommend that for the first vote in 2001, first-past-the-post should remain with a ward system in place.

Concerns were raised on the proposed mortality review committees. While supporting the concept of such committees, the minority is concerned that these committees are very limited in their function. Collating statistics alone is unlikely to improve health outcomes. To achieve that would require the establishment of a well resourced National Epidemiology Unit that had direct links to providers to ensure that data from Mortality Committees were used for purposes of monitoring quality assurance and improvement of outcomes. Further the mortality committees should specifically include a Perinatal Mortality database with appropriate National linkage to quality control and improvement initiatives. The National Party members also take the view that participants in Mortality Review Committees should have complete protection from litigation. Practitioners who may have committed serious offences can be prosecuted through other avenues. The mortality committees should be totally non punitive so that all participants can freely be involved, with the sole aim that the findings of the Review Committee can be used for health improvement outcomes.

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