October 21, 2009 1:33pm by David Farrar

DHB changes

“Cabinet has agreed to a number of proposals from the Ministerial Review Group’s report ‘Meeting the Challenge’ that will greatly improve national and regional cooperation and reduce duplication of back office functions, ” the Minister said.

As a package, the changes will move up to an estimated $700 million in savings over five years to frontline services. That would buy about 16,000 heart bypass operations or build two large city hospitals. The changes are also expected to reduce the health system bureaucracy by up to 500 administration jobs. These would be managed as much as possible through attrition and voluntary redundancy. …

The major changes include setting up a new National Health Board (NHB) within the Ministry of Health. The NHB will focus on supervising the $9.7 billion of public health funding the 21 DHBs spend on hospitals and primary health care.

The new NHB will manage national planning and funding of all IT, workforce planning and capital investment. It will also take national responsibility for vulnerable health services such as paediatric oncology.

Work will also start on consolidating the 21 DHBs’ back office administrative functions such as payroll and bill payments.

“Officials estimate a one-off cost of between $5 and $10 million to set up the changes and that will be met within the Vote Health budget. Up to an estimated $700 million is expected to be saved in the first five years from coordinating procurement and logistics. All savings will be reinvested back into frontline health services.”

I don’t think anyone can object to the intention of these changes. If they save even a fraction of what the official cite, that will be a good thing freeing up money for frontline services.

The challenge for the Government is to have them go smoothly. INCIS is a prime example of good intentions going astray.

But I’m pleased the Government is prepared to take the risk, in order to make improvements. The status quo is not good enough.