Plan to gut Health Ministry

A national Health Board to oversee and fund district health boards could be established under a radical overhaul of the sector.

The proposal is a centrepiece of a report from a ministerial review that was completed last month.

Health Minister Tony Ryall has received the review and is due to report to Cabinet on it by the end of the month, his spokesman said.

However, it is understood some ministers, including Transport Minister Steven Joyce, are worried that the cost of such a radical restructuring would delay improved efficiencies, giving the Government few "wins" to claim before the next election.

He was also concerned it may not reduce the size of the bureaucracy.

It is understood there are also concerns the report does not identify enough savings for such a big-spending portfolio. Details from a draft of the report include a warning of big cuts ahead to the rate of growth in health spending.

The health budget grew by 8.6 per cent between 2002 and 2007. Though this had been cut back to 6 per cent, nominal growth in the economy was likely to be between 4 per cent and 5 per cent. Health received about $12 billion in the Budget.

Maintaining the recent rate of growth would require ever larger slices of national income to be spent on health. "Clearly, this is unsustainable," the draft report says.

However, Labour health spokeswoman Ruth Dyson said dramatically reducing funding would come at the expense of health services.

"This makes a lie of the promises from Tony Ryall to move services to the front line. We have already seen a number of short-sighted cuts to community health services."

She said some of the lowest paid workers in health were being offered nil wage increases. "This report shows that these cuts are just the beginning of much more bad news for health services and health workers."

The report also flags a rethink of the way health services are delivered and calls for a debate about which health services should be provided by the Government.

Mr Ryall set up the review in January, saying it was aimed at giving doctors and nurses a greater say in the health system. He warned that some existing programmes, committees and strategies were likely to disappear to free up funding. "Every dollar will be reinvested into health."

He said the public wanted less bureaucracy and waste, and patients treated sooner and better.

But Ms Dyson said a new National Health Board was just another level of bureaucracy.

"The establishment of the National Health Board is just a re-run of the failed policy/operational split the old Health Funding Authorities of the 1990s.

"It is really strange that all the language of Tony Ryall has been about cutting back on bureaucrats, and yet one of the first big moves in health is to establish a new bureaucracy."

Mr Ryall had earlier given assurances the Government would continue the growth in health spending set out by the previous government, saying the review was about improving frontline services, not reducing the health budget.

He declined to comment yesterday.

The Government is expected to issue the report for public comment in the next few weeks before taking a final position on its findings.

- © Fairfax NZ News