Hon TONY RYALL (Minister of Health) : I move, That the New Zealand Public Health and Disability Amendment Bill be now read a first time. At the appropriate time I will move that the bill be considered by the Health Committee. This bill is not about a major restructuring of our district health boards or the New Zealand public health service. Rather, it is about taking the health board system and making it work better. The way forward to meeting our clinical and service challenges is not by having 20 district health boards operating independently, duplicating functions often inefficiently. This bill is about increasing district health board and clinical regional cooperation.

This is the first health bill that the new National-led Government has introduced to the House since its election 18 months ago. In this time important improvements have been delivered in a number of public health services, despite the fact that we are experiencing the worst world economic recession since the 1930s. These improvements include a quadrupling of the average annual increase in the number of people getting elective surgery, from under 3,000 more a year to an increase of nearly 13,000 in our first year. We have also seen improved emergency department waiting times, and a massive reduction in the number of people waiting for more than 6 weeks before commencing cancer radiation treatment. We have also seen the successful capping of the growth in the health sector bureaucracy, with a management administration cap being set for both district health boards and the Ministry of Health; and 1 year on, both the ministry and the district health boards have responded by stopping that growth, freeing up more resources for patient services—and these are only a few examples of progress.

Although these gains are positive, it is clear the wider public health system faces many challenges. The election of the new Government saw it inheriting a public health system that had many strengths, such as a committed workforce, but many serious challenges. Among the most important of these were workforce shortages, district health boards supplying around $155 million in health services for which they were not funded, and intensifying pressure on a number of services. An example of this was the pressure on elective waiting lists, which has seen the previous Government culling over 30,000 patients from the system, many of whom were promised operations.

It is clear that the public health system faces huge future challenges, and a potential doubling in demand over the next decade. How do we best meet the health needs of our population, which is both growing and ageing, and a population that is expecting increased access to particular health services, such as elective surgery, and rightly aspires to benefit from medical and technical advances? These sit us alongside the need to upgrade and expand our health infrastructure, including our hospitals, information technology and equipment, and, above all, to grow our health workforce in the face of competition from neighbouring countries with greater wealth. All this in a time of short-term decline in Government revenue and forecast moderate medium-term growth caused by the world’s recovery from the worst economic crisis.

An early priority of the new Government was to establish an expert ministerial review group made up of experienced people with health and management expertise from across the health sector to give their advice on reducing bureaucracy and improving front-line services. This ministerial group consulted widely, met with a wide range of health groups and individuals, deliberated, and returned to many groups to test their thinking. Building on the developing consensus on the need for improvement, the ministerial review group developed a forward-looking set of over 170 recommendations. These recommendations covered both very specific recommendations, such as reducing the plethora of committees we inherited, and higher-level major advances, such as the establishment of a national health board and consolidated planning of information technology in the health sector.

Most recommendations have been subject to ministerial and official examination, and progressed as rapidly as possible. This bill progresses some of those recommendations, more specifically to stop reinventing the wheel 20 times, through a better focus on shared services and the power of bulk purchasing. It also focuses on the need for a more regionalised approach to district health board planning of services, and a stronger commitment to ongoing improvements in quality.

The bill amends the New Zealand Public Health and Disability Act 2000 to support improvements that are required to meet those challenges. The bill provides the framework to improve national and regional cooperation and reduce duplication of back-office functions. The bill also supports a greater focus on patient safety across the health sector, and responds to calls from health professionals across the nation for an independent, clinician-led agency to establish quality improvement across the whole health service.

Cooperation between district health boards can improve quality of care, reduce service vulnerability, and improve cost-effectiveness by reducing the transaction costs of district health boards conducting their own individual processes. When the current district health board model was introduced in 2000 the intention was that district health boards would collaborate and the Minister of Health would be able to use accountability arrangements and policy settings to reinforce the importance of collaboration. Although some steps have been taken by district health boards towards regional collaboration and planning, such as through healthAlliance in Auckland, progress has been limited and it has become increasingly clear that there are barriers, including legislative barriers, preventing district health boards from making genuinely collective decisions consistently and in a timely manner. To address these problems, the bill seeks to improve national and regional service planning and decision making by ensuring that district health board planning takes into account national and regional, as well as local, requirements and this includes freeing up various reporting requirements to reduce needless administrative costs.

The bill will also amend district health board objectives and functions to ensure they work collaboratively to meet national, regional, and local service needs, provide dispute resolution measures to support district health boards working collaboratively, and enable elected district health board members to be appointed to other district health boards. These amendments will ensure that district health boards collaborate to ensure a better balance of district, regional, and national priorities in decision making, which will allow the most efficient use of available resources.

The bill also includes proposals to accelerate improvements in quality and safety by establishing a health and safety commission. High levels of quality and safety are the cornerstone of an effective, trusted, and efficient health service. To support this, the Government has decided to establish a Health Quality and Safety Commission as a stand-alone Crown entity. This will bring a focus on quality and safety not previously achieved. The commission will be clinician-led. It will empower clinical leadership and foster the necessary clinical engagement to achieve our aims of continuous improvement, quality, and safety in health and disability services, including services and private providers like rest homes.

In addition, it is estimated that avoidable adverse events cost the public health service between $500 million and $600 million a year. Realistically, we cannot save all of that overnight but even a 20 percent reduction in errors, arising from a greater focus on quality and safety, could save us $100 million a year that could be reinvested in other front-line services.

Finally, the bill seeks to minimise administration costs and reduce bureaucracy in the public health service by supporting shared administrative support and procurement services across the public health service. The bill includes a backstop power for Ministers to direct greater collaboration and use of shared services by district health boards. We have identified that improving the national approach to shared services could yield significant cost savings, reduce personnel, ensure more efficient systems, and provide a better health service. At the moment, while district health boards can be encouraged to use shared services or processes to obtain administrative support and procurement services, they cannot be compelled to, even when there are clear benefits to that approach.

The bill contains a last-resort power that enables, after due process and consultation, the Minister of Health and the Minister of Finance to direct district health boards as to how to obtain administrative support and procurement services, as well as whom those services will be required from. This provides the opportunity for a dedicated shared services agency for the public health service to realise the benefits of bulk purchasing and the gains that could come from that.

In conclusion, this bill is not a major restructuring of our district health boards or the New Zealand public health service. Rather, it is about taking the health board system set up by the previous Government and making it work better. It is about recognising that the way forward to meeting our clinical and service challenges is not through having 20 district health boards reinventing the wheel—duplicating functions, often inefficiently. Rather, it is about recognising that the way forward is through increasing district health board and clinical regional cooperation. A greater emphasis on regional planning and cooperation, with the accompanying ability of the Government to move district health boards in this direction if necessary, is part of the plan for protecting and growing our New Zealand public health service and for meeting tomorrow’s health challenges. I commend the bill to the House.

Hon RUTH DYSON (Labour—Port Hills) : This is a Tui billboard: “The New Zealand Public Health and Disability Amendment Bill is not about restructuring in the public health system, and the reason for that is that National promised it would not restructure. The bill is about an administrative shake-up.” It is like the cuts in health services that every single week we have reported in the House. Every single week there are cuts to front-line health services, and the Minister of Health says that they are not cuts; they are changes.

Well, the Minister of Health should tell that to the 3,000 older people in Otago and Southland, an area that is very familiar to your good self, Mr Assistant Speaker Roy. He should tell them that the cut to their home support—which is no longer funded by Vote Health—is not a cut; it is just a change. Well, change has been pretty awful for them.

The other interesting thing is the sort of expectation the Minister built up. He did not build it up a lot in that speech, actually. I was not sure that he would not doze off part-way through it. It was not a very lively presentation, but he did talk about the huge savings potential to be made in health. He said that huge dollars would be saved by making more efficient use of our taxpayer dollar in the health system, and he talked about all the things that we would be able to buy with that saved money.

I refer to a similar report that was presented to this House and to the public of New Zealand, and they fell for it only once. The report stated that savings made yearly by health reforms could provide an extra 10,000 to 20,000 coronary bypass operations or fix half a million children with glue ear. That was said by the then Minister of Health, Bill Birch. Did we ever see any health savings in the 1990s? Did we see any New Zealander getting better access to more affordable public health services?

What we saw in the 1990s and what we are seeing now are absolute cuts. In fact, I have some very attractive cartoons, and I am happy to present the Minister of Health with a copy of them after this debate. The cartoon I am holding is from the time of the National-led Government in the 1990s. It shows a surgeon with a facemask on, but the mask is a $100 bill. The caption says “Welcome to your regional health authority. Pop up onto the bed and take off your clothes. One of our accountants will attend to you shortly.” That is the health system that the previous National Government foisted on New Zealand, and it is the health system that Tony Ryall now wants to force on New Zealand. There will less access, fewer services, and it will be more expensive.

Here is another very attractive cartoon. This is another one by Tom Scott. He will probably charge me for flashing his cartoons around tonight. It is headed “Behind the scenes in a typical New Zealand hospital.” It says “Scalpel. Clamp. Blood transfusion. Can we afford it? Calculator.” Do members remember the so-called great health reforms of the 1990s? All we got was cash registers in our public hospitals. New Zealanders did not like it. They did not think it was fair. They knew they had paid their tax dollars, week in, week out, to get access to public health services, and they did not want to pay again when they walked in the door of their local public hospital.

Minister Ryall did not refer much to the bill. It was a political rant from the start to the finish, dull though it may have been. But the bill does a couple of things. The first thing it does is establish a Health Quality and Safety Commission. This is the second new bureaucracy we have had in just 18 months under this Minister of Health. The National Health Board is chewing up thousands of dollars, and we are not sure at all what it is doing at the moment, other than replacing what the Ministry of Health used to do. So we are not quite sure what the Health Quality and Safety Commission will do, but I imagine that it will have appointees from the Minister. The Minister’s handpicked personnel will be running the show, and they will probably do the bidding of the people who are giving the Minister the key advice in the health sector.

If the aim is to improve quality and safety in our health system in New Zealand, then there would be no argument from this side of the House, but it is not at all clear why a new body is needed to do that. Will it be just a new bureaucracy? Will it just chew up more of the precious health dollars that we are seeing taken away from our families and communities, and will we see any improvement in health quality and safety as a result? That is not at all clear.

We have heard some outrageous financial claims from the Minister, and he made them again in his speech. Even though the key part of this bill is to set up a new bureaucracy, the Minister was still claiming in his speech, immediately prior to my taking the call, that we would see $700 million saved in the health system over 5 years. Nowhere in this legislation is there any indication of exactly how that money will be saved.

We have the idea of shared services. I am not quite sure what stage the establishment board is up to now. We have a ministerial dictate. No longer will the district health boards be required to work together until they get agreement on a pathway forward. If the Minister is intolerant of any disagreement, then he will make the call and he will decide. So all our local democracy has gone out the window.

If the people at Tairāwhiti District Health Board are having a discussion with MidCentral District Health Board about how to provide better services locally, and if the Minister decides that that is not what he wants to do, then he can just step in and say that they have had enough discussion. He can tell them he does not want them to collaborate in that sort of way, and he can tell them what they will do.

That ministerial determination and dictate is something that we have not seen in New Zealand since the days of the Hon Bill Birch—

Hon Member: Right Honourable.

Hon RUTH DYSON: Correct; I thank the member—the Rt Hon Bill Birch. I offer my apologies for incorrectly appropriating his title to him. Actually, his retirement was one of the best things that could have happened to the health system in New Zealand.

It is not at all clear—the Minister did not elucidate on it at all—how the new Health Quality and Safety Commission will fit in with the Health and Disability Commissioner. We have recently had a new appointment. The Minister of Health announced a new appointment to the commissioner’s position, but no relationship at all is explained in this legislation. It is a big puzzle as to why we need a new bureaucracy when a large part of the work that is described in the legislation is already under the mandate of the Health and Disability Commissioner. The idea of resolution, of protection, and of learning is the driving force behind having the commissioner, and this just seems to be an absolute duplication of that.

I thought that the Minister in his 10 minutes may well have had the opportunity to apologise to New Zealanders for the significant number of health cuts to front-line services that they have had to endure in the last little while. As I mentioned earlier, we have seen huge cuts in Otago and Southland, particularly to home support for older people. In South Canterbury health cuts for older persons have again been rife, but we have also seen a significant reduction in the number of people who are being allowed to access the accident and emergency department at Timaru Hospital. In Gisborne a programme that worked with people with mental illness and people who had been violent—a community-based programme with extremely good results—has been cut because of health funding cuts.

Mental health services in Nelson have been cut back. Gisborne Hospital decided to close its theatre for 6 weeks to save money. So for 6 weeks the people in the Tai Rāwhiti district had no access to surgery. Of course that would save money. If every hospital in the country was closed, it would save a huge amount of money, but it would not do much to assist health outcomes for New Zealanders.

In my own town of Christchurch we have seen, week after week, older people being treated in a disgraceful way because of the health cuts that Tony Ryall has signed off. At the MidCentral District Health Board—Palmerston North and Horowhenua—we are going through a consultation process now where one shift of the district nursing service, an entire 8 hours of service provision, will be cut, and the assessment, treatment, and rehabilitation beds at Levin’s health centre are under threat.

This bill does nothing to address that. I look forward to the debate at the select committee where local people will be able to tell the Minister of Health directly what they think of his health cuts.

Dr PAUL HUTCHISON (National—Hunua) : It is with great pleasure that I speak on this very timely New Zealand Public Health and Disability Amendment Bill. But it is with profound regret that I had to listen to the Hon Ruth Dyson give a speech that she probably gave in 1992. She has failed to move on to the reality of the legacy of the previous Labour Government, which basically left our health system bloated with bureaucracy and absolutely fragmented all over the place. It had the lowest productivity score that one could possibly imagine, and I will go on to that in just a minute.

It is highly relevant that this bill is a response to many of the recommendations of the ministerial review group that was so ably led by Murray Horn. In that review he pointed out that the sustainability of our public health and disability system is under serious threat. That, by no coincidence, follows the 9 long years of the previous Labour Government. The review group noted a variety of things. It noted that New Zealanders want to have a public health and disability system of the same standard as that of other OECD countries, yet we do not earn as much as those countries, so our system needs to be more effective and productive than the OECD average in order to bridge the gap. That is exactly why we have this bill today and why the National Government will be introducing tomorrow a Budget that is committed to putting in a system that focuses on achieving economic growth and on encouraging saving, exporting, and investing, rather than the rampant consumption and spending seen under the previous Labour Government. In order to achieve a sustainable health service we need, firstly, sustainable economic growth, which we did not have under the Labour Government, and, secondly, an efficient and effective health system, which was totally forgotten during the 9 years of the previous Labour Government.

The ministerial review group also said the public health system still struggles to sustain itself financially, despite the substantial increase in funding over recent years. In 2009 the district health boards were running deficits of about $150 million, and had significant unfunded capital requests. It is absolutely rich for the Hon Ruth Dyson to go back to the 1990s, given the abysmal performance under Labour during the previous 9 years. In fact, the Treasury review report of 2005 showed that real hospital expenditure between 2001 and 2003 was 13.4 percent higher than at the beginning of Labour’s term in Government, which basically meant that hospital efficiency fell by 7.7 percent between 2001 and 2003. During the previous 3 years, it had had a modest increase in efficiency of about 1.1 percent. But that absolutely, clearly outlines the problem of the Labour legacy, whereby hospital efficiency fell by 7.7 percent and consequently cost billions of dollars to the New Zealand taxpayer. We know that during that time an extra $6 billion was put into the system, and we know that there was hardly any increase in elective surgery. Yet in the last year, under this National Government, there has been an increase of 11,800 elective surgeries carried out.

But to emphasise the point ever further, it is relevant to look at the Auditor-General’s report on primary health care in 2008. Primary health care was going to be one of the flagships of the previous Labour Government. I freely acknowledge that an extra $1 billion worth of funding made access to primary health care more affordable. However, the Auditor-General points out the hopeless lack of tools that Labour put in to accurately measure the result of its investment. In fact, Labour brought in a radically new system, but failed to ensure that there was value for each health dollar spent.

If Labour members are to be critical of this bill’s aims—which include amending the objectives and functions of district health boards to ensure that they work together for the most effective and efficient delivery of health services to meet national, regional, and local needs; and supporting the provision of shared services across the public health system—I remind the Hon Ruth Dyson of what Annette King said in August 2000 in the first reading of the New Zealand Public Health and Disability Bill. She said “District health boards will be expected to work together and to enter into cooperative and collaborative arrangements … to ensure service delivery for their populations.” That failed to happen under the 9 years of the previous Labour Government. Annette King said that back in 2000, but she missed out the words “efficient and effective” before “service delivery”. That is precisely what Labour failed to achieve in its 9 years in office, and precisely what this bill is about: efficient and effective health service delivery to individual patients throughout New Zealand.

But more than that, this bill is about the National Government’s determination to develop new modules of care that see the patient, rather than the institution, put at the centre of service delivery, and that emphasise clinical leadership. This bill is also, highly appropriately, creating a Health Quality and Safety Commission to improve the quality of individual patient care. I very much look forward to this bill progressing through the House to the Health Committee and being enacted in a timely manner.

IAIN LEES-GALLOWAY (Labour—Palmerston North) : It is a bit of a novelty to speak on a health bill. As the Minister said, it is 18 months into the term of this Government and finally we have health legislation before the House. But, as the Minister said, that is not to say that things have not been happening in the health sector. He took some time to discuss what he thought was happening out there in the health sector, and I intend to follow his lead by talking about what is happening in my electorate. The cuts—changes, as the Minister likes to euphemistically call them—that have been occurring at MidCentral District Health Board have been extensive and varied. They have all come about because the Minister wandered up to Palmerston North, read the Riot Act to the district health board, and then wandered back to Wellington to leave them to it.

So it is good to finally see the Minister of Health taking some accountability for his efforts. But what is happening at MidCentral District Health Board? Well, as Ruth Dyson said, probably the biggest and most significant cut is that to district nursing services. We see a cut to the overnight service, which is particularly important to those people who are most vulnerable and who receive palliative care from our district nursing staff. They are wonderful nurses, who will respond to any call-out in the middle of the night, and who will go and deal with people in their homes so that those people do not have to go through the discomfort, the agony, and the trouble of going all the way into hospital and being admitted.

People do not want to see that service disappear. So instead of the district health board taking responsibility for it, the core Government responsibility will have to be shifted to the hospice—a hospice that is already stretched, and a hospice that welcomed the additional funding, which this Government promised and this Government actually did give it. But of course the Government did not say that the hospice would have to fund a whole extra service with that money. The hospice thought that was a kindly gesture to help it balance the books and to help it maintain its current services, but no, it was not that at all, it was a little sweetener before it got hit with the information that it was going to have to provide another service.

Another service that is going is the Diabetes Lifestyle Centre, along with sexual health services. That is about right for this Government, because it seems to have no interest whatsoever in public health and health promotion. These are two facilities that help to keep our population well so that people do not end up having to go into hospital, but this Government seems to have no interest whatsoever in keeping people well. It wants to see people arrive in hospital, get an acute admission so that it is easy to measure and easy to tick the box to say that that person has been through hospital.

Rehabilitation services will be cut as well in Palmerston North, as are the assessment, treatment, and rehabilitation services in the Horowhenua. So yes, the Minister is absolutely right, there is a lot going on. There has been a lot going on in the health sector in New Zealand, even though this is the first health bill we have seen before the House, and none of it is good. It is all about cuts to front-line services.

I suppose this is where we have to call into question the accountability of the Minister. The bill refers a lot to the accountability of the district health boards, but what about the accountability of the Minister? He has studiously avoided any requirement to be accountable, with nothing going through the House, so we as MPs do not get to scrutinise his work. His work never goes to the Health Committee, so the public do not get to scrutinise his work, and all the difficult decisions and all the bad news are passed off to the district health boards. That is probably why we saw 500 people in Levin attend the MidCentral District Health Board meeting this week. Those 500 people wanted to go along to the district health board—the people whom they see as making the decisions—and plead their case. Why? Because the Minister is not listening. He does not accept responsibility for his actions, and he would rather pass it off on to other people.

But the Minister has responsibility, because before the election National made two promises in particular—two promises to do with health care. One was about front-line services. Well, we have seen so many cuts to front-line services it is not funny. And the second, of course, was less bureaucracy. What have we seen? We have seen the establishment of a National Health Board, and now we are seeing the establishment of the Health Quality and Safety Commission. These are two more layers of bureaucracy flying directly in the face of the promises made by National before it was in Government—two more broken promises to add to all the other broken promises we have seen from this Government.

Setting up the Health Quality and Safety Commission is one part of the bill, and the other part includes amendments to support the provision of shared administrative support procurement services across the public health system. Listening to Dr Paul Hutchison and to the Minister, members would imagine that this is something they just dreamt up all by themselves, and that it was not happening in any way whatsoever before the National Government came into office. This is part of the mythology that the National Government is trying to create about the previous Labour Government, which is that it was overloaded with bureaucracy and had no interest in effective outcomes and shared services.

We have already seen the two district health boards down in Southland and Otago reach a point where they are in merger. That did not happen just overnight; collaboration between those two district health boards was happening long before National came into Government. It has not all suddenly happened since Tony Ryall became the Minister. It is an utter myth to say that there was no collaboration between district health boards before this Government came into power. Again in my own area in the lower North Island, there is an awful lot of regional collaboration between Wairarapa, Hutt Valley, Capital and Coast, and MidCentral district health boards, all the way up to Wanganui, Taranaki, and Hawke’s Bay. They do an awful lot of collaboration and they have been for some time. In fact, Wanganui and MidCentral entered into an alliance, perhaps the first step towards merger—we do not know. That may or may not be the best thing for those district health boards. We would like to see more coming from the clinicians and from the public there to tell us what they think about whether this is the right path for them.

But it is an utter myth—and Dr Hutchison attempted to reinforce it—that collaboration was not happening before the National Government came into power. So, yes, this bill does extend it and perhaps brings it into a more formal structure. I look forward to the opportunity to discuss it at the Health Committee. It is about time we had public discussion about what this Government is doing.

But make no bones about it, a lot of this bill is about coercing the district health boards into amalgamation—because another one of the myths is that 21 district health boards are too many. Well, if that is too many, how many is enough? What is the right number? If this Government thinks that the Labour Government brought in 21 district health boards and that was too many, how many is enough? We have not heard from this Government how many it thinks is the right number of district health boards. But we are seeing through this bill, and other measures, a coercion of district health boards and primary health organisations—much more strongly amongst primary health organisations; if one wants a primary health organisation to merge, according to this Minister, one just cuts its funding off. Perhaps it is a little bit more subtle with the district health boards, but that is the direction this Minister wants to go in.

Well, that is wrong. Our communities and our clinicians should have the say over the direction of our district health boards. If they think they would benefit from closer relationships with other district health boards, or going as far as merger, then that is fine. But as we have already seen from Southland and Otago, if we do not get the consultation right, then we will get a backlash from the clinicians and we will get a backlash from the public.

I am very pleased to see the New Zealand Public Health and Disability Amendment Bill referred to the Health Committee. It is about time we got some public scrutiny of what this Government is doing in health, and I hope we see many submissions from all the people who have expressed their concern to me and other MPs on this side about the disastrous direction in which this Government is taking our health sector.

KEVIN HAGUE (Green) : The New Zealand Public Health and Disability Amendment Bill, as the Minister of Health said, makes the legislative changes arising from the Government’s response to the ministerial review group, the Horn report. I am pleased to say that the Green Party will support the bill tonight.

Hon Member: There’s a rarity.

KEVIN HAGUE: It is, indeed, a rarity.

The Horn report itself was a bit of a mixed bag; I do not think I could share the Minister’s glowing praise for the report. Although it contained some good analysis, it also contained a significant amount of needless reworking of things that the health sector was already doing, and an awful lot of ideological, structural ideas looking for a home. We were certainly relieved when the Government did not proceed with many of the recommendations from that review.

This bill sets out, effectively, to do two things. It overhauls the quality improvement structure that is in the principal Act, upgrading the structure from an advisory committee through to a commission, and it provides the machinery for closer collaboration between district health boards. We support both of those objectives.

First of all, in relation to quality, the first iteration of the structure was the advisory committee that had the brief of dealing with both epidemiology and quality—an unusual marriage of subjects and one that, despite the best efforts and intentions of those involved and those behind the committee, did not really work. That committee received a shot in the arm from the previous Minister of Health, the Hon Pete Hodgson. I pay tribute to the work of the Minister in establishing the Quality Improvement Committee, on which I had the pleasure to serve for a time. I think that the Quality Improvement Committee did a great job in accelerating the quality improvement agenda in health. I pay tribute to Pat Snedden, the chair of that committee, to the other members of the committee, to the ministry staff who supported it, and to all of the district health boards and others in the sector who took on board those quality improvement projects. They picked up the ball and ran with it, as it were.

The last 5 or so years have really seen a quantum leap in quality improvement in health, perhaps starting with Peter Davis’ research work. That work really highlighted the extent of errors occurring in our hospitals. The work of the Office of the Health and Disability Commissioner has also been important in pinpointing the places and the mechanisms involved where things go wrong and also in establishing a culture of open disclosure and an approach of analysis of the root causes of errors with a view to health improvement. District health boards have been very willing partners in this work and have made concerted efforts both individually and collectively to improve the accessibility, acceptability, effectiveness, efficiency, and, above all, safety of health services. So I think this new commission has the potential to move that on to the next stage, and I think that is a good thing.

I sound a note of caution that in providing this greater central capacity to coordinate and steer quality improvement it is really important that we do not end up disempowering those who work at the coalface on quality improvement, because it is really at that level that the big gains can be made. It is critical that the commission gets that balance right.

The bill also provides the machinery for requiring collaboration between district health boards. I guess that from the beginning of our current iteration of health sector organisation there has been debate on how many district health boards there should be. Iain Lees-Galloway has just spoken about that issue. The fact is that whether it is 21, 20, 10, or one, the number will be right for some things and wrong for other things. In broad terms the tension is this: the more locally services are organised the more sensitive those services will be to local need and the more innovative those services are likely to be, yet, on the other hand, the bigger the unit the greater the potential for economy of scale and for coordination of highly specialised services. Those are the tensions. The trick is to find a system where we can base our health services organisation at local levels but then have the capacity to aggregate up where appropriate. That has occurred already quite a lot in the health sector, as others have mentioned.

The basic problem is one of asymmetry of need: in general, a smaller district health board—and I have some experience in this area—will have need of collaboration where a larger district health board may well not. One of the obstacles to progress on that issue has been the wording in the current New Zealand Public Health and Disability Act. The Act requires district health boards to act in the specific interests of their people and of their region. That means that we end up with collaboration occurring between district health boards only when it is to the universal benefit of all. That means that situations where most people would benefit from closer collaboration do not necessarily result in that collaboration occurring. That is a problem that we must fix, and I think this bill provides the machinery and the mechanism to fix it.

The other important aspect to it is another that Iain Lees-Galloway touched on, and that is the solution that some have advocated: amalgamations, either encouraged or forced. Certainly, it is not a solution that I favour. I favour, instead, the idea of an intelligent network of smaller district health boards, or perhaps district health boards around the same size that we have now, that have good mechanisms for collaboration. I think that although amalgamations have some potential to fix the central problem of collaboration not occurring, they also have some costs. They have the cost of the change itself and they also have the cost of the loss of innovation. I think that we would face those costs at our peril.

We support those two central thrusts of the bill. I say in relation to collaboration that it is a shame that the same approach is not being adopted in relation to primary health organisations, because exactly the same dynamics apply with primary health organisations. The Ministry of Health undertook some analysis a couple of years ago of what the right size for a primary health organisation was. It found that small primary health organisations and big primary health organisations both have strengths and weaknesses, so it could not come up with an optimum size. A smart solution to that problem would be better than the Minister’s intent of requiring primary health organisations to amalgamate.

We supported other changes in the Government’s response to the Horn report. One of those was the change to Pharmac’s role: expanding it into medical devices. It is not in this bill, but, as I read the Act, it does not require legislative change to facilitate it. So we are confident that it is still on track. We also support the change to the role of the National Health Committee. I am reminded of Gareth Morgan’s recent book where he talks about the fundamental problem that every health system in the world faces: potentially unlimited need. His solution has two elements. He says that one of the things that we need to do is to prioritise health spending, and the change to the National Health Committee facilitates that. The other is to prioritise expenditure and investment in public health and primary care. It is unfortunate that the Minister has chosen not to do that.

RAHUI KATENE (Māori Party—Te Tai Tonga) : Today is a very good day to speak to the New Zealand Public Health and Disability Amendment Bill and to share the good news for Te Tai Tonga health. The district health board results for the third quarter, which were released today, show that in four of the Government’s six health targets district health boards in the Te Tai Tonga rohe featured in the top four results of performance. That is great news. It is fantastic. In fact, there were some exceptional results for the Southland District Health Board, which has improved access to elective surgery by 110 percent, and for the Canterbury District Health Board, which has improved access to elective surgery by 109 percent. In the area of increased immunisation, Otago, Southland, and South Canterbury district health boards took up first, second, and fourth places in improving the targets for 2-year-olds to be fully immunised.

There is a bit of bad news though, I am sorry. The results were not as good in comparison with other district health boards in respect of the target of providing better help for smokers to quit. As members know, that is an area of considerable interest to the Māori Party, and I, for one, will be keeping a good eye on that one over this next quarter. Hopefully, those district health boards will pick up their performance in those measures.

But with this bill, such accountability and transparency will become par for the course. The Māori Party welcomes the initiatives in this bill to respond to the challenge of providing high-quality health care and disability support services. I want to establish from the outset the context in which we read this bill. We read it in the context of the emphasis on Māori health and the principles of the Treaty of Waitangi expressed in the primary bill. Importantly, we see many of the initiatives specified within the bill as being closely aligned to Whānau Ora.

Much of the thrust of the bill is about increasing efficiency by removing duplication between corporate and administration functions. In this way, it is a clear expression of a policy commitment we campaigned on, which was to review the duplication of corporate and administration functions between hospitals, primary health organisations, and district health boards to see whether any savings would be available if these duplications were removed. As the Minister of Health would say, it is about working better, smarter, and sooner.

It is also about a system in which public services have to be monitored by reports against targets. The bill amends the objectives and functions of district health boards to ensure that they work together for the most effective and efficient delivery of health services to meet national, regional, and local needs. In these three key points—streamlining bureaucracy, monitoring against targets or, more appropriately, outcomes, and provider collaboration—there is a tight synergy with Whānau Ora. We absolutely believe that district health boards should work together for the more effective and efficient delivery of health services.

But I want to make it quite clear that although the changes are positive, we do not believe that it is necessary to legislate for such change. Collaboration to work more effectively and efficiently should be done naturally without people being forced into it. As members will know, my colleague Minister Tariana Turia has been zooming around the rohe to Whānau Ora hui, and she has been sharing with us the amazing response that has accompanied the hui throughout—

Hon Tony Ryall: 3,500 people already.

RAHUI KATENE: That is amazing. There is so much interest in the Whānau Ora approach; it is fantastic, an amazing response. One of the most exciting aspects of those hui has been the willingness of providers to consider collaboration in the interests of a cohesive and comprehensive approach to whānau well-being.

Another aspect of this bill is the structural changes to enhance quality improvement activity, including the establishment of a new Crown agent, the Health Quality and Safety Commission. The Māori Party health policy includes the notion that the community must receive accurate information about the performance of hospitals, primary health organisations, and district health boards, including the public reporting of adverse results. Although we welcome the emphasis on quality improvement, we have some questions about the structural change and we would like to know the impact that setting up the commission may have on the Public Service. How many jobs will be cut as a result?

While talking about personnel, another initiative in this bill is to enable the appointment of elected district health board members to the boards of other district health boards. In Te Tai Tonga, for example, Tahu Pōtiki is a member of both the Southland and Otago district health boards, so in many respects this bill reflects current practice. This is a positive development, and will certainly assist in reducing duplication. Our only question around extending this approach to the nation is that we must ensure that we elect the right people to the board in the first place.

Finally, there is just one question that we would like to raise, and that is the concern about whether this legislation will give the Minister of Health a lot more power over district health boards; if so, what controls are in place to ensure that power is used wisely and not abused?

There is a great deal of change activity currently occurring within the health sector, and in most respects this legislation reflects the direction by investing in a system where outcomes matter, where whānau matter—a system in which Whānau Ora becomes the norm. On that note, we are very pleased to note that at one of the hui the former Minister of Health Annette King was present with her husband, and was showing interest in the Whānau Ora approach. We support this bill at its first reading.

NICKY WAGNER (National) : I rise to support the first reading of the New Zealand Public Health and Disability Amendment Bill.

There is no doubt that the provision of more than just adequate public health and disability services to the people of New Zealand is one of the biggest challenges in our country now and in the future. New Zealanders expect that, living in a First World country, they should have access to the very best, cutting-edge health services available. But as our population ages and as our economy struggles in comparison with those of other nations, this is a real economic challenge. We all want a champagne health service on a beer income. But this is not new in New Zealand, and I take inspiration from Ernest Rutherford’s quote “We haven’t got the money, so we’ve got to think.” Back in the early 20th century at Cambridge University when Rutherford was working on splitting the atom, he had funding challenges, but he used his money intelligently and well and finished up with a Nobel Prize for his work. New Zealand’s health services face similar funding challenges today.

The Government’s responsibility is to use the funding we have in the most efficient and effective manner. This bill introduced today is a drive for better value for money out of our public health sector, with the intention of providing a framework to foster economies of scale through national and regional cooperation in the sector, and to reduce duplication and bureaucracy. Just like Ernest Rutherford, “We haven’t got the money, so we’ve got to think.”, and I would add, nearly 100 years later, that we have to think smarter.

New Zealanders want and need more for their money out of the health system, but we definitely do not want to sacrifice quality, and that is a tough call. But, fortunately, it is not always impossible. Different groups within the health system are working hard to find ways to simplify processes, to reconfigure premises, and to work in different ways to improve both efficiency and effectiveness. There are situations where we can maintain quality but spend less money doing it. Sometimes if organisations are particularly creative, they can even find new ways to improve services that still cost less.

Members of the Health Committee have seen a number of examples where district health boards have managed to improve their services without additional cost. In my home town of Christchurch we have seen the Canterbury District Health Board focus on the patient’s journey, and that has meant that patients can move through the system more quickly, and therefore at less cost, and often with better health outcomes. Canterbury District Health Board’s emphasis on better and more convenient health-care sooner is showing real benefits for my community.

The bill will provide a range of amendments to the way that administrators run the health system, and I can see particular benefits in the amendments that support the provisions of shared administrative, supportive, and procurement services. It is just a matter of economy of scale. New Zealand is a small country and our health system is particularly fragmented. To provide goods and services to a multitude of small organisations is enormously costly. So members can be sure that right now the district health boards will be paying top dollar for their products and their delivery.

Organisations that work closely together to share the overhead costs of procurement and supply chain will cut costs, and if they can collaborate over efficiency measures, such as integrated information technology systems, they will certainly be able to stretch our health dollar further.

I support this bill. It is a good step forward in providing a framework to help New Zealand bridge the gap between our expectations of health care and the dollars that we need to provide it.

LYNNE PILLAY (Labour) : I am really pleased to take a call on the New Zealand Public Health and Disability Amendment Bill. As everyone in the House knows now, Labour is supporting this bill’s referral to the Health Committee, but we do so with some concern. I listened to the speech made by Nicky Wagner, which was pretty much in line with the speech notes that were given out the other day. The same thing happens. The notes go to all members of caucus—

Nicky Wagner: Actually, you’re wrong.

LYNNE PILLAY: Wow, Nicky made them up herself; we really have underestimated her! But in terms—

Hon Tariana Turia: It’s Labour that sends around the notes.

LYNNE PILLAY: If I were the Māori Party I would not talk about notes. We have notes here.

Labour supports the bill going to a select committee to enable the public to have their say, which is the most important thing. Some pretty sweeping statements are being made and some pretty big promises are being made in terms of what will be delivered. I have a headline here stating: “Really big health savings estimated”. Whoops! Sorry, that is a 1993 statement from the National Government. It was its statement then about how it was going to save money and put it into health, etc. Then we have this statement: “Big savings envisaged in health reforms efficiency”. When was that statement made? It was in 1993. It was made not by Tony Ryall but by that champion of health reforms, Bill Birch.

I am saying to the House that we need to be very careful about this bill going forward. As I said, we support this bill going to a select committee, but with caution. It is really important that the Health Committee enables New Zealanders to have their say and that the committee ensures that all New Zealanders are given ample opportunity to do so. Unlike many things that have happened with this Government, this bill should not be rushed through. The process should be very prolonged to enable Kiwis to have their say on what their expectations are in terms of health reforms.

I heard the members of the Māori Party talking about Whānau Ora. We in Labour certainly do not disagree with the principles of Whānau Ora, but we have not heard National agree with them in the past. Usually they refer to them as race-based funding, but on this occasion National is on side with the Māori Party. That is what happens with a Government that works together with its coalition partners, and that is fine. We have no problems if this programme delivers for Māori, but we are saying that we need to make sure that the funding does not come from other well-meaning organisations that are delivering very, very good health-care. I say to the Government and to the Māori Party that we are keeping a very watchful eye on that.

Hon Tariana Turia: Oh, we’re sure you are.

LYNNE PILLAY: Pardon? I did not hear that.

Hon Tariana Turia: We’re terrified about it!

LYNNE PILLAY: They are terrified. I know that the Māori Party has such a cosy relationship with the Government. It is really good. I just hope that it delivers, because some very big promises have been made at the cost of tremendous stuff. Where do I hear the Māori Party protesting and making noises about the health cuts for elderly people, whether they are Māori, Pākehā, or Indian? Where do I hear the Māori Party talking about the health cuts we are seeing throughout the country? That Minister has a bit to say.

I ask about this because I am talking in this debate with my disability hat on. I am saying quite clearly that the principles of this bill are about public health and disability. We have heard a lot about how district health boards are going to work much more efficiently, how things will be much better, and how we will have so many more savings. For example, this statement says: “Big savings envisaged in health reforms efficiency.”—sorry, that was from 1993. “Health cut savings estimated.”—sorry, that was from 1993. I have a diagram from the 1990s that says it all. It shows people around the operating table looking for a scalpel and clamps but, at the end of the day, they find a calculator.

On this side of the House we have real concerns about that. We support efficiencies in systems. When Labour was in Government we worked very hard to get efficiencies, but not at the cost of care. I notice that the Māori Party does not have much to say on this, but we clearly see some real areas of cuts under this Government. Where do we see the Minister for Disability Issues advocating in respect of the cuts to disability services in this country under the National Government?

Hon Tariana Turia: Name them.

LYNNE PILLAY: Name one? There are cuts in terms of support for children with disabilities in schools, for people with disabilities who live at home, and for older people with disabilities who live at home. The cuts are across the board. If the Minister for Disability Issues is sitting in the House and saying that she does not know what I am talking about, then clearly she has to get off the Whānau Ora bandwagon and listen to the other things that are happening. Whānau Ora will not deliver everything for all New Zealanders. We need to look at a health system that delivers for all New Zealanders, whether it is in the hospital system, whether it is in primary health care, whether it is for people with disabilities, whether it is in maternity services, or whether it is support for our young children. I tell members that that does not happen when money is pulled out of the health system.

I come back now to the bill, after that small interlude away. Members on this side of the House support the bill and we look forward to the select committee process. We know from members of Parliament visiting from other countries that our select committee process is second to none. It is second to none because it is another level of scrutiny that takes the legislation away from a Government that says that it is the one true way, and that it is what we are going to do to get big savings in health reforms efficiencies. It takes it back to the grassroots. It means that people can come along to the Health Committee, whether they are providers, clients, people with disabilities, or young people. Those things are really, really important, and I know that the Health Committee will have a very big task on its hands. There are planning requirements and some real efficiencies to be made around district health boards working together, which is what the Labour Government did while it was in power. Labour is completely behind anything that enhances procurement and the most efficient way of purchasing and service delivery. We will go with the people of New Zealand on that.

I say clearly to this Government that it is accountable for what it does. In terms of the cuts that have happened, we have seen them all too often. We have challenged the Minister of Health; I see that he is hanging his head in shame. We have challenged the Government because it is not accountable and is not fronting up to the public about the cuts that it has made in primary health care and in the delivery of services for elderly people. From the efficiencies proposed under this bill we want to see real money going into real services for real people in New Zealand. That is why members on this side of the House welcome the fact that the bill will go to the select committee so the people of New Zealand can front up and tell this Government the areas where things are lacking and why those efficiencies have to be made.

MICHAEL WOODHOUSE (National) : I wonder whether I am in a time warp, because of all of the speeches we have heard from the Labour side on the New Zealand Public Health and Disability Amendment Bill, 80 to 90 percent of them have been talking about things that happened 18 years ago. It is a huge compliment to the Government and this Minister of Health that not a single bad word could be said about what has happened over the last 18 months.

Iain Lees-Galloway: I found some.

MICHAEL WOODHOUSE: Mr Lees-Galloway tried but I am afraid it was a pretty weak attempt.

About 18 months before the 2008 general election the Opposition spokesman on health, Tony Ryall, went around the country listening, sharing, and discussing matters relating to health issues, and that informed the National Party’s policy going into that election. I was the chief executive of a surgical hospital and president of the Private Surgical Hospitals Association, so I was in the unusual position of submitting to that process that informed the party’s policy, and then being part of the Government charged with delivering on National’s commitment to provide better and more convenient services sooner.

I think he was expecting a diatribe on the issues facing the private sector, but we did not spend much time at all on that. We focused almost entirely on the issues facing our public system, and we agreed on just about all things. We agreed on retention strategies for our young doctors and nurses, improving primary care, less bureaucracy—let us remember that under the previous Labour Government the number of district health board managers and administrators went up by 50 percent—more elective surgery, shorter waiting-times, and, most important, re-engaging clinicians who had become increasingly disenfranchised from the decision-making process as they were wrapped under layer upon layer of bureaucracy.

But there was one matter that we did not really see eye to eye on at that time, and that was structural reform. I thought it was needed, but Tony Ryall said no. Although the structure we had may not have been perfect, the appetite for such reform was very, very low, and the National-led Government needed to deliver and focus on service delivery, not structural reform. I think that very much informed the National Party’s policy, and I am interested in reflecting on what that policy said. It stated that we would continue the growth in health spending, we would reduce bureaucracy, we would shorten waiting-times, and we would ensure that doctors, nurses, and other health professionals would have a say on what was going on in their health services. We would improve maternity, we would provide more services to at-risk mums, and we would bond doctors and nurses to keep them here for longer. Well, that has a pretty familiar ring to it, because all of those things have been done and they have been done without a single change in the legislation.

So this bill is not about a major restructure of the health system; it is about some minor adjustments that will continue the Government’s relentless path towards improving clinical service delivery. I think the planning frameworks and the collaboration proposals are extremely sound. But the one that I am really very interested in, and encouraged by, is the establishment of the Health Quality and Safety Commission. I am not sure whether it was Ms Dyson or Mr Lees-Galloway who somehow tried to—

Hon Tony Ryall: Ms Dyson.

MICHAEL WOODHOUSE: Ms Dyson tried to say that it was somehow inconsistent with what the Health and Disability Commissioner was doing. Frankly, it is a completely different thing. I see no crossover there, except to the extent that the Health and Disability Commissioner does step in when things go wrong and does have an educative role. This is a much, much different beast. It will continue the really good work that has been going on in our district health boards, and, in particular, the Counties Manukau District Health Board, which has taken the lead on a number of excellent quality initiatives. I look forward to that improving and continuing with the establishment of the Health Quality and Safety Commission.

This is a really good bill, and it continues the Government’s efforts in health service delivery. I commend it to the House.

Hon PETE HODGSON (Labour—Dunedin North) : The New Zealand Public Health and Disability Amendment Bill is a rather small piece of legislation. It has some good bits in it, I think. It is confused in other respects, and there are one or two pieces that are, frankly, alarming. It is small, and the proof of its size, I suspect, is that all of the speakers from the Government side have pretty much spoken about things other than what is in the legislation. I hope to depart from that.

We had, in the speech from the Minister of Health, the Hon Tony Ryall, a great deal of mythology about what the previous Labour Government had done for health, and that mythology was repeated—

Michael Woodhouse: Another rewriting of history.

Hon PETE HODGSON: Another rewriting of history; indeed it was, as the member who has just interrupted me has said—by Dr Paul Hutchison. That was not so, however, in the case of Rahui Katene, who did not bother to rewrite the mythology of Labour’s involvement in health but decided that this bill was a warm endorsement of Whānau Ora—a bow that was drawn a little long, in my view. Then we had Nicky Wagner from the National Party, who decided that we needed to learn, just once more, the history of the splitting of the atom. So those members were involved in talking about anything except the legislation, although Michael Woodhouse did talk about it a little, I must acknowledge. That is because the legislation does not contain a lot.

The bill does contain some measures, and I want to dwell on a couple of them. The first is that I want to pick up on the word “quality”, as other members have, and say a couple of things to the Minister and to the National Government. The legislation repeals EpiQual, the predecessor of the Quality Improvement Committee. Section 17 of the parent Act, the New Zealand Public Health and Disability Act, is repealed by clause 6 of the bill, and that committee is replaced by a new commission, the Health Quality and Safety Commission. It also has the word “quality” in its name, but its functions are different from those of the committee. Although Kevin Hague thought they were quite different from those of the committee, I think they are only slightly different. We will see whether that is so. The point I would like to make is that the EpiQual, the predecessor of the Quality Improvement Committee, was put into the public health and disability legislation just after the turn of the millennium, when it was first introduced by the previous Labour Government. The EpiQual part of the Act, in my view, did not work very well. What is more, I reckon that I have worked out why that was the case. I fear that the Government might be about to repeat the mistake that was made then.

Here is my story. EpiQual did not work well precisely because its findings, its results, and its work were not driven down through the existing accountability structures. That is to say, EpiQual sat off to one side of the district health board system. It sat off as a quango on its own, and therefore quality sat off in a quango on its own, almost absolving the district health boards from taking a more headstrong view on issues of quality. I do not want to overstate that, because, of course, many district health boards were and are very quality-focused. But it was not until the Quality Improvement Committee got going, which Kevin Hague was on and Pat—

Dr Paul Hutchison: Snedden.

Hon PETE HODGSON: —Snedden chaired, and which had some very significant champions driving quality, that we had some progress. Again, the reason for the progress was that those quality programmes were driven through the existing accountability channels.

Now, if the current Government has left the Quality Improvement Committee or some variant of that committee—some son or daughter of that committee—in place, that is fine and dandy. But if it has not, then by repealing section 17 and replacing EpiQual with another stand-alone entity—this time called a commission, not a committee—we run the risk of repeating history, which will not be pretty. At the moment we are getting runs on the board with regard to quality. The Minister, in his opening remarks, decided to try to monetise the value of quality. That is fair enough; people do these things. There will be no gains unless the current accountabilities are used to drive the quality agenda down through to hospitals and to other district health board functions.

That is not all I want to say about the repeal of section 17 of the parent Act, because one of the things that that section states is that the committee must specifically deal with morbidity and mortality issues concerning the perinatal, infant, and child and adolescent sectors. Those mortality and morbidity studies, which are now a permanent feature of our health and disability system, are themselves big drivers of quality. If we can identify why we have, for example, an increase in sudden infant death syndrome, or why we have an outbreak of alcohol-related deaths in youths, we can improve the quality of our health system. That part of section 17 is gone. I do not know whether it is gone on purpose, and certainly, section 18 says mortality review committees can be appointed by the Minister. But the section requiring that has gone, and it is not being replaced by the new sections. I am drawing that to the House’s attention, because I think that might be a mistake.

The thing I will concentrate on next is the issue of procurement. I just say there is money to be made from procurement, and money has been made there. Money has been made, first of all, through Pharmac, and it is serious money. Tribute goes to the National Government back in 1993 for setting up Pharmac. It was a good move, and Pharmac has survived successive Governments, and will survive successive Governments—at least until the United States starts talking to us about a free-trade agreement. But there is no reason to stop there. When Annette King was the Minister, we decided that we would go for joint procurement across a range of things—for example, insurance. There is no reason to stop there. We could go on to telecommunications, or to all manner of things. Some of those things have huge gross profit margins in the system. To give one example, prosthetic companies make a lot of money; it is, in essence, a racket. The racket can be dealt to if we end up with a bit more monopsony behaviour by the system, and district health boards all decide to buy one form, or only three or four forms, of hip prostheses, instead of buying 30 of them.

So I think that part of the legislation, which is amended by clause 9 of the bill in front of us, will receive quite a lot of support from members around the House. I do not expect, however, it will make a lot of difference by itself. There is a lesson there, because there are very many instances of situations where the current legislation has been treated with “ignore” by people within the health sector, and the Minister will have to have not only this legal avenue available to him but also a great deal of determination to push it through. I can remember saying at length to district health boards that progress on that issue would need to be made or funding would be cut. In fact, I took 0.5 percent off them at one point in order to get their attention, and gave it back to them only when they had started to procure a little more sensibly.

The thing that really concerns me is that clause 9 inserts new section 33B. That is a new section, which states that the Minister may give directions to all district health boards—not about procurement, and not about existing services, as the Act currently states, but about effectiveness and efficiency. On the face of it, that is not a bad thing—who will argue against effectiveness and efficiency—except that the Minister is largely untrammelled by the legislation as introduced, and, therefore, is in a position where he can force, should he choose to do so, more or less anything on to district health boards. I have two comments about that. The first is, he should bring it on. If the Minister is going to get gung-ho about requiring this and that, he will find there will be a political backlash. The second is that at some point the Minister, if he overplays his hand under that new section, will start to abrogate the democratic parts—district health board elections, and all that—of the original parent Act. You see, we do have a hybrid system: it is part elected, part appointed; part local responsibility, part central responsibility. The Minister has decided—and it is a very strange thing for a centre-right Government to do—that he will give himself command-and-control powers. That is what they are; they are broad, indeed. The Minister can smile; those powers are very broad. I just say to the Minister that further unpleasantries in this regard are eagerly awaited.

Dr JACKIE BLUE (National) : I am pleased to speak to the first reading of the New Zealand Public Health and Disability Amendment Bill. The bill proposes legislative amendments necessary to support reforms recommended by the ministerial review group earlier this year.

Importantly, the bill is not about a major restructure of the health system; it is about trying to get the health system working. The health sector has been struggling. There are 21 district health boards working in 21 different ways. There has been duplication, they have been working inefficiently, and they have been reinventing the wheel in 21 different ways. One provision of the bill is to provide shared administrative, support, and procurement services across the public health system, including additional powers, such as ministerial direction, to enhance ministerial ability to require greater system collaboration and use of shared services.

The Minister of Health has already made a number of changes to help improve the way the health sector works. He introduced six health targets, so that the district health boards could focus on the urgent issues of reducing excessive patient waiting-times in public hospitals, and providing more elective surgery, faster cancer treatment, and shorter waits in emergency departments. The Minister has been concerned about our health workforce. Too often New Zealand seems to be a training ground for Australia. New Zealand has had a health workforce crisis, with too many clinicians disengaged and leaving the country. The Clinical Training Agency was established to unify workforce planning in New Zealand, and to ensure coordination of workforce training, planning, and funding for our nurses, doctors, and other health professionals. The Minister has also gradually increased the number of appointed district health board members who sit on more than one neighbouring board, particularly people with health and financial expertise.

The ministerial review group report was a landmark document. It recommended how New Zealand might improve the quality and performance of the public health system. It was a comprehensive report with 170 recommendations on how to reduce bureaucracy, improve front-line health services, and improve value in the public health and disability sector. The report recognised that to improve front-line services, we need more input from front-line staff, and there were recommendations to strengthen clinical leadership and clinical networks. The report proposed consolidating back-office functions across the 21 district health boards to harness the power of bulk purchasing. It also proposed reducing the number of committees that advise the Ministry of Health from 157 to 54. The Minister is right on track with the report’s recommendations. This bill is about ensuring that the momentum continues.

The proposed changes represent a major drive for better value for money in our public health sector. They will enable greater national and regional cooperation in the sector, and reduce duplication and bureaucracy. These changes will enable us to improve efficiency and move more resources to the front line. I commend this bill to the House.

• Bill read a first time.

• Bill referred to the Health Committee.