Editorial: Brave move to help the sick

OPINION: Ever since Tony Ryall was assigned the health portfolio, he has stressed the Government's desire to strip out what he calls "back office" costs and redirect them to the "front office", otherwise known as patients.

Bar his daft decision to fund Herceptin, most of his steps toward achieving that goal have been sure enough.

The minister has, for example, overridden the Clark government's aversion to working with the private health sector, and also announced that 200 unfilled positions within the Health Ministry are being scrapped, diverting the $20 million saved to district health boards to spend on the unwell.

It is with these 21 beasts that the minister is now starting to grapple, albeit timidly. He should be braver and insist that neighbouring boards merge and seriously downsize – why should Wellington, for example, have two DHBs as well as another over the Rimutakas?

However, before last year's election – and acutely conscious of Kiwi weariness with, and wariness of, anything that smacks of more public sector restructuring – the party indicated that it had no plans to scrap DHBs. Instead, Mr Ryall created a ministerial review group, chaired by former Treasury secretary Murray Horn, to recommend how he might improve the quality of performance of the public health system.

When the group reported in August, it calculated that real spending on health had to nearly double in the next 20 years just to meet existing expectations. The minister knew that would never fly. As he told orthopaedic surgeons meeting in Wellington last week, New Zealand can no longer lift health spending by 8 per cent a year as it has been doing; more modest increases lie ahead because of the recession's profound effect on the national accounts. Our straitened circumstances have gifted the Government an opportunity, nonetheless – using the Horn Report as a guide, Mr Ryall is embarking on overdue reorganisation of public health, which aims to end the inane duplication of administrative roles at DHBs and might save up to $700m over five years. That kind of money, as he says, would build two new hospitals or fund 16,000 hip operations.

The first priority will be to set up a national health board within the ministry to supervise the $9.7 billion that the health boards spend on hospitals and primary healthcare. It will also be responsible for national health services, such as child cancer treatment.

IT, workforce planning and capital investment will be managed centrally, as will procurement for more than pharmaceuticals.

The minister also wants to strengthen health board collaboration, something MidCentral and Otago, for example, have already begun. Given that 500 or so jobs will go in the process, staff nervousness is understandable. But public health services are in place with the chief aim of treating the unwell, not of employing people.

The Dominion Post has, for years, criticised the district health board model as a cruel hoax. Although it will take time to ascertain if Mr Ryall's changes live up to his rhetoric, any initiatives that mean scarce health dollars can be spent on the sick, rather than on spin-doctors and other administrative overheads, can only be welcomed.

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