28 Jul 2015

Health board funding could be in for a shakeup

6:12 pm on 28 July 2015

More leaked documents reveal the funding of district health boards could be in for a shakeup.

hospital bed

Photo: 123RF

The funding review shows DHBs could have money withheld if they miss targets and boards may need to bid for shares of funding pools.

Yesterday Radio New Zealand revealed details of a review ordered by Director-General of Health Chai Chuah, which advocated taking the control of DHBs away from elected representatives.

Chai Chuah

Director-General of Health Chai Chuah has ordered a review of DHB funding. Photo: Supplied

Senior health officials have said proposals to change the funding structure - outlined in a three-page document obtained by Radio New Zealand - would pit board against board and be highly destructive.

The proposed changes are being described as "the 1990s in drag".

The document is a precis by the Director-General of Health's office of a fuller review led by former Treasury Secretary Murray Horn. It has been sent to all DHB chairs and chief executives, but they have not been shown the fuller reviews.

The review reveals the Ministry of Health would hand out funds to DHBs on achievement of planned milestones. If those targets were missed, the money would be withheld and would then go to other providers.

Four pools of funding would also be created under the plan, which the minister-appointed Canterbury DHB chair, Murray Cleverley, said he would find difficult to operate within.

"There are some things under the funding that I would find it more awkward and more challenging to deliver the outcomes that are expected of us.

"I like to be judged on my outcomes, and I think most district health boards, be it governors or managers, or the staff, like to be judged on their outcomes rather than inputs, and if you were splitting up the funding model, that actually was three or four buckets of money, rather than one for example, I would find that more difficult to operate in."

'Open to discussion'

Health Minister Jonathan Coleman said he was open to a discussion on ideas on funding services, saying there needed to be greater transparency in the health budget.

Labour Deputy Leader, Annette King.

Labour's health spokesperson Annette King Photo: RNZ / Alexander Robertson

"We've also got to make sure that as we shift more services to the community that we've got a way of sustainably funding that."

He reassured voters there would not be any wholesale changes and said the proposals were a long way from being government policy.

"Quite frankly it's not anywhere near the top of my list. I'm more focused on delivering more operations, more immunisation, getting more doctors and nurses into the system, and moving more services to primary care."

Labour Party health spokesperson Annette King said the proposal was sketchy and would create uncertainty for DHBs and people working in the health sector.

"DHBs which try to plan ahead for their services are going to find that some of their funding is now contestable to everybody and anybody that wants to put up a plan for some of their money.

"How they're going to be able to plan those services, provide the workforce to provide those services is a mystery to me."

Chairs and chief executives from about half the country's health boards met in Wellington yesterday to discuss their response to the document, as well as proposed changes to DHB governance.

They are due to give their view to the Director-General of Health next week.

Mr Chuah said the reviews were for his consideration and no decisions had been made on the recommendations.‎

Otago University professor of health policy Robin Gauld said contestable funds would create winners and losers in the public health system.

He told Morning Report most countries were moving away from competition in health services and towards collaboration in an open and honest way, and setting up competition would undermine that process.

Get the new RNZ app

for ad-free news and current affairs