What’s in a number?

by Kevin Hague

For those working in the health sector a general election tends to bring a frisson of apprehension: will the positive momentum built with the current structure be, as usual, swept away by the political wind of structural change? The Minister’s “razor gang” review of the health sector recommends splitting the Ministry of Health in two which suggests that we may be heading back to the bad old days of perpetual change.

While particular structures can either help or hinder (and sometimes both) the truth is that the people working in almost any system can usually find ways of providing good services. The problem is that it takes a little time following a reorganisation to work out ways to do this, so there is inevitably a loss of impetus. For over a decade New Zealand’s health system suffered like a sailing boat “in irons”: successive structural reorganisations followed so quickly that the system was never able to rebuild forward momentum and sat more or less paralysed.

It is precisely this paralysis we should anticipate from the changes proposed for the Ministry of Health – paralysis we certainly can’t afford.

District health boards have both good and bad points, but their pre-eminent virtue is that they have now been left in place for eight years, creating a stable platform from which to provide services, and some great innovation is now beginning to appear.

So far Health Minister Tony Ryall seems to have taken on board the strong message from the sector to leave structural settings intact when it comes to DHBs, but the same can’t be said for Primary Heath Organisations (PHOs) – the organisations that contract with DHBs to provide primary health care services. The Minister seems perfectly willing to wade into regions and lay down the law on the number and size of PHOs he wants to see.

He needs to be careful. The Ministry of Health has previously carried out research on whether or not it should require a minimum size for PHOs, and concluded that it should not. There can be advantages for both large and small size. Large PHOs can often harness efficiency through economies of scale, and are more likely to have a pool of patients large enough to cope with extraordinary costs of care for a few. On the other hand small PHOs are more likely to have strong community involvement (and are thus more likely to be able to deliver effective health promotion programmes), and seem better able to deliver the multi-disciplinary model of care envisaged by the primary health care strategy.

By trying to require larger PHOs, the Minister makes the system less likely to deliver some of the key goals that have been set out for it. Whose interest does this serve? Perhaps he needs to ask that question when he receives advice from those recommending changes.

It is obvious that different sizes of organisation will be best suited for particular functions, so how to choose? The debate over how many district health boards we should have was invited by the previous government who, in introducing the new system, indicated that they anticipated amalgamations may ensue in the future.

But this threat of amalgamation has been an unhelpful distraction. When district health boards encounter problems, all too often commentators have looked straight to amalgamation as a possible solution, leaving more creative options unexplored. With the structure left intact, these more creative solutions are starting to percolate through anyway.

The more cynical amongst us have always viewed DHBs as mechanisms for Government to retain central control over the health sector, while devolving the risks associated with it. If we want DHBs to be responsive to the needs and preferences of local communities, then maintaining all 21 boards gives the system the capacity for community responsiveness.

For functions where economy of scale suggests larger aggregations of population or services, then DHBs are starting to show a real willingness to collaborate and share. All DHBs are collaborating on various procurement projects (e.g. clinical supplies, motor vehicles), and in joint or shared health services, or ‘back office’ functions (like IT or Payroll). Some combinations of DHBs have taken this much further, with Otago and Southland DHBs, for example, having a conjoint senior management team, as well as joint arrangements at almost every level.

This has been hampered by the law, which requires each DHB to act in the interests of its own population. This was being interpreted to permit collaboration only when all participants benefit, whereas we should expect collaboration where there is net benefit, even if some individual participants will be worse off. This obstacle is being overcome through maturing in the sector and clear expectations from successive ministers.

What is emerging is a flexible and adaptive network in which each DHB is a node, able to act independently or in concert with others, depending on need. Some of the links between DHBs will be explored and discarded. Others will prove successful, be further refined, and provide templates for other parts of the network. Decision-making about what level of collaboration best suits different issues will also develop and improve.

The biggest threat to success for this network is the risk of Ministerial restructuring, either through DHB amalgamations or some more fundamental reorganisation. What the Minister instead needs to do is commit to further stability in structural arrangements, and to encourage and facilitate innovation and as much collaboration as possible.

It is perhaps not as dramatic and eye-catching as throwing all the cards in the air again, but a much better way of serving the public good.