Health Minister Tony Ryall says establishing a National Health Board within the Ministry of Health is cheaper and faster than setting up a new organisation, despite a recommendation to do so.
Mr Ryall has announced changes that will see the creation of a new body within the Ministry of Health to supervise district health board spending and an agency to do administration for all the DHBs.
The changes are expected to save $700 million over five years. Five hundred administration jobs within DHBs and the ministry expected to go.
Mr Ryall told Morning Report that appointing the board is the Government's immediate priority and having it within the ministry makes sense as it will keep costs down.
He said the Government is trying to make current health legislation work and cutting administration costs by harnessing the power of bulk purchasing was instrumental in this.