136. Current legislation provides Ministers the power to:
     1. require the HFA to provide financial information (Minister of Finance)
     2. direct the HFA on any lawful matter, which may include funding particular services (with the requirement that such direction is given following consultation with the Board and subsequently published in the Gazette and presented to the House of Representatives) (Minister of Health)
     3. require the provision of services by HHSs (with the requirement that the Minister consult the HHS and present a copy of the requirement to the House) (Minister of Health).

137. It is recommended that similar provisions are provided for Ministers in relation to DHBs. To mitigate inappropriate use of these powers the requirements that DHBs are consulted by Ministers before the powers are enacted, and that the results of the powers are tabled in the House and published in the Gazette should also be maintained.

138. The Minister of Health may also wish to reserve the power to merge DHBs where there are good reasons for doing so. There may be situations where to ensure DHBs are viable, and to take advantage of economies of scale a merger would be desirable. Further consideration of this issue, with regard to accountability and the meeting of performance targets, is needed before this power is proposed.

139. Current legislation also provides powers to the Minister of Health and the Director-General of Health to undertake investigations and inquiries, the recent Cervical Screening Inquiry is a good example. It is recommended that it is in the public interest to carry these provisions over to new legislation. The applicability of the provisions in Section 39 of the Resource Management Act (which allows only the inquiring team to question witnesses and does not allow for cross-examination in court) for DHB inquires will be considered further by officials. Without this provision inquiries will be very long and expensive. A properly resourced inquiry team will then be able to make findings without the need for a lawyer for every party to do this for the inquiry team.

Board Committees

140. Cabinet has agreed that, as a minimum, DHBs will be required to form:
     1. a Hospital Governance Committee
     2. a Primary Care Advisory Committee.

141. It is necessary that the legislation require Boards to establish these Committees and give them the ability to establish these and Committees. Other types of committees which DHBs may wish to establish include a Maori advisory committee, a mental health services committee, a public health committee, or a disability support services committee. Formation of other committees will be at the discretion of the Board.

142. The Committees will sit beneath the Board and are designed to provide a vehicle for separating the decision making on primary care and hospital care/ownership issues. This separation is particularly important in managing the risk of hospital dominance in Board decisions. The responsibility for managing the resulting tension, and making the necessary trade-offs will rest with the Board.

143. The appropriate membership of the Committees has yet to be determined, and will be in large part driven by the precise role of the Committees. It may be appropriate that the Committees are largely made up of Board members who are encouraged to co-opt other members.

144. The precise roles of the committees, their relationship with the Board, and their autonomy is largely dependent on the degree of devolution of decision making determined in the paper on the roles of DHBs, and the management of service delivery. Operational and procedural provisions for these committees (similar to those for the DHB itself) would apply to committees.

145. Considerable further work on these issues is required and will need to be put to Ministers for consideration.

146. Further advice on this issue, and the equitable representation of Maori on Board Committees will be provided to the Ad Hoc Ministerial Committee as part of the report back on 31 March 2000.

Transitional DHB Boards

147. In the first instance, DHBs will be established with transitional boards which will be in place until the local body elections in 2001.

148. t is proposed that the members of transitional boards are wholly appointed by the Minister of Health.

CONSULTATION

149. This report on governance arrangements for DHBs was prepared by an interagency working group led by the Ministry of Health, and including Te Puni Kökiri, the Department of Prime Minister and Cabinet, The Treasury, the Health Funding Authority, CCMAU, and the State Services Commission.

FINANCIAL IMPLICATIONS

150. Full identification of the one-off costs and ongoing fiscal impacts of the proposed structural changes, including those related to the establishment and management of DHBs, will be reported by 31 March 2000 [Cab 00 M2/4 refers].

151. The financial implications of the proposals in this paper have not yet been costed but relate to:
     1. the costs of elections
     2. any additional costs of Board members (for example, the aggregate number of DHB Board members may be the same or somewhat larger than the current number of HHS directors and HFA Board members, plus the any costs of running the Board's primary care and hospital committees)
     3. the administrative and transactions costs associated with Maori partnership arrangements
     4. any additional administration costs for DHBs over and above HHS and HFA administration costs
     5. any additional costs for the training of Board members over and above HHS and HFA director training already budgeted for.

LEGISLATIVE IMPLICATIONS

152. The legislation required forms part of the New Zealand Public Health Services and Health Reforms (transfer and transitions provisions) Bill.

HUMAN RIGHTS ACT 1993

153. The proposals do not have Human Rights Act 1993 implications.

REGULATORY IMPACT STATEMENT

154. A Regulatory Impact Statement prepared in accordance with the requirements set out in CO (98) 5 is attached.

PUBLICITY

155. Any publicity on matters related to this paper is being managed as part of the Communications Strategy that forms part of the wider work on health sector change.