Association of Salaried Medical SpecialistsMonday 17 August 2009, 4:24PM
Media release from Association of Salaried Medical
"The report to the Minister of Health released today promises a mix
of fuddle, muddle and disguised potential privatisation," said Mr
Ian Powell, Executive Director of the Association of Salaried
Medical Specialists, today.
Mr Powell was responding to the report of the Ministerial Review
Group led by banker, Business Roundtable member and former Treasury
head Murray Horn.
"The report is sugar coated with generally useful comments about
clinical leadership, clinical networks, regional service
collaboration, national procurement, and quality. But these
important issues are denigrated because they serve as a velvet
glove to hide the iron fist of radical restructuring. If the
government was to accept the recommended restructuring it would
involve breaking two election promises, generating de-stabilisation
and uncertainty that risks distracting it from achieving its health
policy objectives, and stimulating moves towards
First election promise
"The first election promise to be broken if the report's
recommendation was to be accepted is the government's commitment
not to restructure the health system. The gutting of the
Health Ministry and creation of a new bureaucracy, the National
Health Board, would be major restructuring that will also affect
how district health boards function. In part, it is a return
to the 1990s by recreating in a different guise the Health Funding
Authority. New Zealand then had two central health
bureaucracies which in effect were fiefdoms wastefully competed
against each other."
"This and other fragmentation of health bureaucracy will not only
affect the quality and coherence of decision-making at a national
level but will also impact on the effectiveness of the work of
district health boards. This new second bureaucracy will have
greater powers than the old Health Funding Authority. As well
as funding them, it will be able to monitor, oversee and dictate to
"Not only will the new national health board have more power than
the current Health Ministry, it will have much less
accountability. By being established as a crown entity rather
than a public service organisation, it would be an arms length
distance from government and much more able to do what it likes
without effective scrutiny and accountability. The report
acknowledges that this new bureaucracy should not be influenced by
outside organisations, which, by implication, includes
organisations of doctors and nurses. It has the feel of a
Stalinist monolith about it."
"What is also disingenuous is the report's view that legislative
change is not required to create the new National Health
Board. In a politically sneaky move the report instead
recommends that the existing Crown Health Finance Agency be
converted into the new bureaucracy. But the two organisations
are chalk and cheese. The Crown Health Finance Agency has a
very limited role around DHB debt management employing around 20
people. The proposed National Health Board would be employing
several hundred people for the enormously larger responsibility of
funding and running the 21 DHBs. It is difficult to envisage
a crasser attempt to avoid parliamentary scrutiny."
"It is misleading to allege that the report is only recommending
minor restructuring. This is major affecting both national
and local decision-making."
Second election promise
"The second election promise that would be broken if the report's
recommended restructuring was adopted is the government's
commitment to reduce bureaucracy. It is bananas to suggest,
as the report does, that creating more bureaucracy reduces
bureaucracy. What savings are made by cutting the Health
Ministry most likely will be lost by the need to resource the
powerful new national health board, along with the other plethora
of new bureaucracies recommended including for quality monitoring,
clinical workforce development, and shared services. Each of
these will require separate 'back office' functions and will risk
duplication. John Cleese would have fun with this."
"There will also be increased time wastage as these new
bureaucracies interact with each other, particularly the national
health board with the Health Ministry. Fragmentation of
structures invariably increases bureaucratic wastage in a sea of
"The report recommends cutting several advisory committees but
selectively downplays the likelihood that its new powerful
bureaucracy (national health board) will require subsidiary
companies which can be more costly than committees."
"Increased privatisation is a real threat of this report.
Becoming a separate less accountable crown entity will make the
National Health Board more able to privatise. This is
signaled in the report with the section on laboratory and radiology
services. Laboratories alone affect around 70% of what
happens in public hospitals"
"The government will be creating a rod for its own back if it runs
with the radical restructuring in the report. Much of the
useful other recommendations in the report could be implemented
without restructuring by instead fine-tuning and giving more
authority to existing structures."
"If adopted, the recommended restructuring will distract from the
achievement of the government's health objectives. Does the
government really want to be in the position at the next election
of having to explain this to the public" concluded Mr Powell?