Health Minister Simeon Brown has announced a major overhaul of the public health system, including reinstating a board and "partnering" with the private sector.
In his speech to an invitation-only Health Forum hosted by BusinessNZ in Auckland on Friday, Brown slammed Health NZ bosses for poor leadership and lax controls over the last two-and-a-half years, and signalled plans to strip back the agency's role.
An independent financial review by Deloitte - published on Health NZ's website - showed the previous Government's 2022 health reforms were "rushed and poorly implemented, with disastrous results", he said.
"The report shows, in black and white, that under the previous government, Health New Zealand lost control of the critical levers that drive financial and delivery outcomes.
"Meanwhile, Labour's plan was to support unions over patients," Brown said.
As a result, wait times for elective surgery, emergency departments and GPs blew out massively, while childhood immunisation rates plummeted, he said.
"This is a system under significant pressure and a system which was recklessly mismanaged under the past government, thrown into turmoil at the worst possible time, and left to drift without accountability."
Despite the fact core operating funding almost doubled between 2014 and 2024 - and huge growth in the health workforce - productivity was "declining".
For instance, during that period, the number of first specialist assessments only increased by 17 percent and the waiting list more than doubled to almost 195,000 people.
Health Minister Simeon Brown speaking at the BusinessNZ Health Forum. Photo: Calvin Samuel / RNZ
Shift to 'local decision making' by July
Brown said Health NZ had "failed to create a cohesive team" to lead the organisation.
Its senior leadership team had only just started weekly in-person meetings after two-and-a-half years, despite most of them being based in Auckland.
"Today, I'm outlining my expectations for Health NZ to deliver a nationally planned and consistent, but locally delivered, health system."
Brown said he had directed Commissioner Lester Levy to "accelerate the shift" to local decision-making and expected local delivery plans to be done by July.
"This will enable local leaders to plan effectively, be clear about their budgets, allocate resource to where it's most needed, and deliver better outcomes for their communities."
Board to replace Commissioner
Brown also announced plans to appoint a board for Health NZ, with nominations opening within weeks.
"Now that the plan is set, it is time to begin the process of transitioning to traditional governance."
The previous board was sacked last July by then Health Minister Shane Reti, who appointed Levy as Health NZ's commissioner for a 12-month term.
At the time Levy said Health NZ was losing $150 million every month, and he had been charged with implementing a "Reset Plan".
In December, Health NZ revised down its forecast deficit in 2024-25, to $1.1 billion, from the $1.7b it forecast several months previously - but indicated more restructuring to save $660m this financial year.
Clearing the elective surgery backlog
Brown said the current and growing backlog for elective surgery was "unacceptable" .
In September, 27,497 people were waiting more than four months for surgeries.
"At the moment Health NZ undertakes both elective surgery, and also responds to acute need, with planned elective surgery often being disrupted by acute need, leaving patients waiting for treatment and waitlists continuing to grow.
"At the same time, the small amount of planned care that is outsourced to the private sector is often done on an ad hoc basis, meaning Health New Zealand is paying premium prices."
It was time to "partner" with the private sector, to New Zealand could achieve value for money through long-term contracts with the private sector.
"I expect Health New Zealand to work closely with ACC - which already has many of these arrangements in place - to ensure value for money for taxpayers and faster treatment for patients."
As a first step, Health NZ would invest $50m between now and the end of June this year to reduce the backlog of people waiting for elective surgeries.
"That will see an extra 10,579 procedures carried out between now and the middle of this year, with work also underway now to negotiate longer term agreements."
He had also asked Health NZ to work with the sector to agree principles to underpin future outsourcing contracts, including longer-term multi-year agreements.
"Long term, I want as much planned care as possible to be delivered in partnership with the private sector, freeing public hospitals for acute needs.
"To be clear, the system remains publicly funded, so everyone has access, but this will allow Health New Zealand to leverage private capacity to reduce wait times for patients."
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