1. The National Health Board in New
Zealand: Delivering Better, Sooner,
More Convenient Healthcare
Professor Gregor Coster
University of Auckland
22 September 2010

2. Overview
• Purpose of this paper is to discuss the rationale for setting up
the National Health Board (NHB, Board)
• legislative framework in brief
• board accountabilities; how the role of Ministers has changed
• how the Board was set up in practice; how it is intended to
operate; the role, if any, of the public in the Board’s workings
• how the Board’s impact will be assessed
• overlapping roles, including with the body responsible for new
technology assessment
• comparison between NZ National Health Board and UK NHS
Commissioning Board
• lessons that can be gained from the New Zealand experience.

3. Arrangements until 2009
• Health Funding Authority till 2000
• health reforms shifted from a single purchaser to 21 District
Health Boards (DHBs) 2000/01
• DHBs responsible for planning and funding of all services in
district except some services e.g. disability
• provide hospital services
• democratically elected boards, with some appointed members
• intended to ensure local needs are met
• evaluations found that intended devolution did not occur
– central control continued
– local autonomy difficult to achieve
– prioritisation of services limited by level of control by central
government over services (Coster, 2010)

4. Arrangements until 2009
‘The reforms involved a shift away from a ‘quasi’-market model
to a more collaborative set of arrangements for purchasing and
providing health and disability support services with a stronger
community voice in relation to decision making about health
and disability support services’
(Mays et al., 2007).

5. National Party manifesto

6. Expenditures in
USA = $7,290 $US PPP
(purchasing power
parity)
Netherlands is
estimated
OECD Health Data,
2009
Australia = $3,357
NZ = $2,454
Davis et al 2010 The
Commonwealth Fund

7. $ billion Core Crown Revenue & Expenses
80
FORECAST
70
60
50
40
30
1998 2000 2002 2004 2006 2008 2010 2012 2014
Year ended 30 June
Budget 2010 Expenses Budget 2010 Revenue

8. Growth in health expenditure 1950-2010

9. Growth in health expenditure 1950-2010
Assuming that relative health spend will remain at
about 20% of total Government expenditure, then the
maximum tolerable increase in the health budget will
be about 40% between now and 2020.

10. NZ Population Projections by Age Cohort (Assuming medium population growth)
Source: NZIER (2005)
400,000
2001 2011 2021
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
0-4
5-9
90+
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89

11. Age Distribution of Population
Statistics New Zealand, March 2006

12. Ministerial Review Group Report 2009
‘… we must find a way to deliver these public services within a
more sustainable and, therefore, slower path for health
expenditure growth… Bureaucracy, waste, and inefficiencies
must be reduced and resources moved to the front-line as
spending growth slows. We must focus on quality which will
deliver better patient outcomes and on ensuring better access
to health services through smarter planning and resource
utilisation, at regional and national levels.’ (Ministerial Review
Group, 2009) p.3.

13. MRG recommendations (1)
• Stronger clinical leadership in decision-making
• accelerating improvements in quality and safety
• higher system performance and secure future
sustainability
• improved national and regional service planning and
decision-making
• minimising administrative costs and reducing
bureaucracy and waste.

14. MRG recommendations (2)
• The MRG considered that the complexity of the current roles of
the Ministry made it difficult to focus on its core responsibility
of policy development. They believed that a much clearer focus
on the Ministry’s core policy and regulatory functions was
required, along with reduced bureaucracy and a smaller
Ministry of Health.
• Foremost among the recommendations was a proposal that a
new National Health Board be created by revamping the Crown
Health Funding Agency to manage national capacity and
service planning, to plan and fund national services, and to
fund and monitor DHBs i.e. to establish a separate Crown
Entity.

15. Cabinet decisions
• Rejected the notion of a separate Crown Entity –
established a NHB within MoH with a GM
– Chair of NHB reports directly to Minister
– Take over funding and planning of certain national services
(paediatric oncology, clinical genetics, major burns)
– Infrastructure planning for IT, Capital, Health Workforce
• Establish Shared Service Organisation
• Strengthen regional cooperation in service planning
and delivery
• Devolve funding of $2.5b to DHBs, where appropriate

16. Accountability arrangements in the New Zealand health system in 2010
Minister of Health
Director
General Ministerial Committees
Crown Entities
of Health
National Health
Board Pharmac
Health Workforce
Regional District Health New Zealand Health Quality and
consortia Boards Safety Commission
National Health
Information
Technology Board Shared Service
Organisation
National Health
Committee

17. Reconfiguration of the Ministry
• National Health Board Business Unit (750 staff) – National
Director – reports regularly to NHB
• Health Workforce New Zealand Business Unit (50-60 staff) –
Director – reports regularly to HWNZ
• Ministry residuum => policy and regulatory functions, plus
service delivery responsibilities (e.g. disability) (600 staff)
• split ministry
• public accountability for MACs through State Sector
accountability framework => MoH SOI, information supporting
the Estimates, and Annual Output Plan.

18. Role of the Minister
• Retains significant powers
• minimal devolution
• NHB may be directed => remains accountable to Minister
• may direct DHBs, regional consortia of DHBs, and numerous
Ministerial Committees and Crown entities in order to achieve
the government’s objectives for health
• requires DHBs to prepare plans that address local, regional and
national needs for health services as directed
• has power to intervene and resolve disputes between DHBs
• contrasts with UK where the government proposes to establish
an independent and accountable NHS Commissioning Board
limiting the powers of Ministers over day-to-day NHS decisions

19. Empowering legislation
The Bill, which is expected to be passed:
• amends the objectives and functions of DHBs to ensure that DHBs work
together for the most effective and efficient delivery of health services
to meet national, regional, and local needs.
• amends planning requirements for DHBs in order to provide for a
planning and accountability framework that takes account of national,
regional, and local requirements
• amends regulation-making powers in the current Act relating to
arbitration and mediation to enable these powers to have wider
application, particularly where there are disputes between DHBs about
how national, regional, and local requirements are best provided for
• provides that the Minister may give a direction to all DHBs to comply
with stated requirements for the purpose of supporting government
policy on improving the effectiveness and efficiency of the health and
disability system.

20. NHB
“Anybody holding the NHB National Director’s role would be
wise to come up with a process of developing recommendations
to the Minister that will incorporate and involve not only the
Ministry’s view but that of the NHB as well.”
– Chai Chuah, new National Director of the NHBBU

21. Planning arrangements in the New Zealand health system in 2010
Minister of Health
Director
General National Health
of Health Board
Annual, five year and
ten year health plans Service
District Health
Configurations
Regional
consortia Boards National Health Plan and Models of
Care
Regional Health Plan
IT
Capital
Workforce
District Health Plan

22. NHB Annual Plan 2010/11- eight priorities
The programme includes the following priority areas:
• developing an approach to long-term service planning that is
more effective and unified
• identifying, planning, funding and monitoring the delivery of
national health services
• supporting the ongoing development and implementation of
regional service plans by DHBs
• DHB funding and planning, and improving DHB performance
• ensuring workforce, information technology and capital
requirements support future service plans
• encouraging clinical leadership and engagement
• reducing waste and bureaucracy and improving the
productivity of the health and disability system
• devolving relevant non-departmental expenditure to the
regional and district level.

23. Comparison of New Zealand and UK Plans for NHBs
NHB NHSCB
Ministerial Advisory Committee Statutory commissioning board
Responsible for national funding, monitoring and Lead on the achievement of health outcomes,
planning of health services allocate and account for NHS resources
Deciding which services should be planned, funded Ensuring the development of GP commissioning
and provided at national, regional and local levels consortia
Planning and funding of designated national Commissioning responsibility for national and
services regional specialised services
Management of certain national services Promoting and extending public and patient
involvement and choice
Oversight of regional service planning and funding, Ensure commissioning decisions are fair and
including arbitration of disputes promote competition
Strategic planning and funding of future capacity Determining health data standards for collection
(IT, facilities, workforce) and transfer of information
[Improve quality and safety – Health Quality and Lead on quality improvement
Safety Commission]
Promote equality and tackle inequalities in access
to healthcare

24. Do we need a NHS Agency?
“The evidence is mounting that reforms of this sort rarely if
ever produce the expected benefits. Devolution can be pursued
without setting up a new agency. It is a matter of the centre
determining what it will and will not seek to control and direct.
A less disruptive approach would be simply to pass legislation
restricting the scope of business that the Secretary of State
could be legitimately be expected to be responsible for to
Parliament.”
Nicholas Mays. ‘Should the NHS be freed from political control?’ J Health Serv
Res Policy Vol 9 No 1 January 2004.

25. Do we need a NHS Agency?
“It is time for the health sector to catch up with modern
governance practices and establish an independent agency to
manage the NHS. The greatest advantage would be that it
would free government ministers and Parliament to provide
leadership in health policy rather than just NHS policy or,
worse still, policy on how best to look after Rose Addis.”
Nick Black. ‘Should the NHS be freed from political control?’ J Health Serv Res
Policy Vol 9 No 1 January 2004.

26. Key themes of the new arrangements
• ‘Devolution’ to a new agency
• Few new Crown entities
• New accountabilities
• Future change is possible

27. Effectiveness of the new arrangements in NZ
• Indications are that NHB is already showing stronger
engagement with clinicians in decision-making, and more
focussed planning of national and regional services than
previously
• better regional collaboration between DHBs is being achieved
• amalgamation is possible in order to achieve greater
regionalisation
• relative invisibility of the NHB will need to be addressed, along
with providing both the public and health sector with a clearer
explanation of the interrelationships between various
committees and components of the revamped health sector.

28. Potential for overlapping roles
• Policy-setting – NHB vs ‘Ministry’
• health workforce – HWNZ vs ‘Ministry’
• priority-setting (medical devices, new technologies,
disinvestment decisions) – National Health Committee vs
Pharmac vs NHB
• health quality and safety – HQSC vs NHB vs DHBs

29. How will the NHB’s impact be assessed?
• ‘Better, sooner, more convenient’ – achieving the aspirational
goals
• greater economic efficiency
• reduction in growth of health expenditure (capital and
operational)
• improving health and performance indicators
• achievement against NHB annual plan
• greater clinical involvement in decision-making
• less bureaucracy
• reduction in health committees
• co-ordinated regional planning
• But not decided yet

30. Lessons from the New Zealand experience
• Avoid dual accountabilities for the NHS Commissioning Board
• ensure clear pathways and responsibility for provision of Ministerial
advice in policy and administrative matters from the Department and
the NHS Commissioning Board
• legislate clearly the powers and functions of the NHS Commissioning
Board, and the ability of the Minister to hold the board to account
• clarify the accountabilities for the Care and Quality Commission,
Monitor and other statutory bodies in relationship to the NHS
Commissioning Board
• commissioning by GP Consortia may run the risk of inhibiting the
development of partnership relationships with other non-government
providers if there are no controls on commissioning behaviour
• New Zealand can learn from the model of promoting and extending
public and patient involvement and choice.