The advantages of this model include:
• an emphasis on partnership at all levels of the sector and strong relationships between the two partners
• flexibility and building forward - the model is equally applicable in a decentralised or centralised environment, and is easy to implement as it builds on existing structures
• a dual emphasis on both Maori capacity building and developing mainstream responsiveness
• potential to improve service integration and to develop intersectoral approaches to Maori health gain and service delivery (where Treaty partners and Maori capacity building organisations work across not only DHB boundaries but also sector boundaries)
• support from the Maori health sector.
54. Disadvantages would include:
    • its very flexibility, which would require effective accountability mechanisms to ensure the sector evolved forward in a way that maximised Maori health and development objectives
    • blurred accountabilities for achieving Maori health objectives
    • a high requirement for skilled Maori input, which could stretch current capacity
    • potentially high transaction costs
    • possible difficulty in achieving consensus between different levels of Maori input.

55. A variation on option one would be to give statutory rights to local iwi or other appropriate Maori on specified matters, for example to be consulted on specific matters such as strategic priorities, or to put up nominations for specific appointments (eg to DHB boards). Similar provisions exist in the Ngai Tahu Claims Settlements Act 1998.

56. Mandating some functions would have symbolic value and help clarify some responsibilities. Disadvantages include potentially diluting the accountability of DHBs for Maori health outcomes and relationships. In addition, it would add little to incentives to achieve Maori health gain or build Maori capacity.

58. This model would see some functions normally belonging to the DHBs delegated instead to regional or local Maori bodies. This delegation could either be specified in the Public Health Services Bill itself or through the accountability mechanisms. (Another possibility would be to use the Minister's proposed powers to intervene in DHB autonomy though these would normally be used only in extreme cases.) The Resource Management Act 1991 allows for powers or functions to be delegated or transferred to iwi organisations.

59. Similar provisions in Canada allow functions such as strategic planning, and workforce development to be 'transferred' in stages to First Nation and Inuit people who choose the option. The process is carefully staged over a number of years with support for capacity building. The Canadian model is a transfer only of administrative functions so it can be carried out without the need for a legislative mandate.

60. A related process operates in the United States, where Indian tribes can opt into a devolution arrangement known as "compacting", where they assume activities and responsibilities of the Indian Health Service. Compacting is carried out under the Indian Self-Determination and Self Governance Act. While the US model involves funding as well as administrative activities, which has been ruled out in the New Zealand context, there are other elements which could be effective in the New Zealand environment.

61. The advantages of a delegated model would include:
    • a strong Maori say in aspects of delivery and a strong Maori capacity building focus
    • clear accountabilities for specified functions

62. Disadvantages could include possible dilution of the DHB's overall accountability for Maori health gain. Option three: sub-purchasing model

63. This model is not really an alternative option, since it is one that may continue to develop as more effective ways of delivering services for population health gain emerge. It is included here, however, so Ministers can see the range of ways Maori can participate in health and disability service delivery. Under this model, DHBs would give responsibility for a Maori population to a Maori organisation (eg the existing Maori Development Organisations). That organisation would either provide or arrange for a range of services for that population to improve their health status.

64. Advantages include:
    • greater Maori say over a subset of services
    • good incentives for Maori health gain at the population level
    • strong continuity with existing directions in the sector - it can happen regardless of other developments
    • clear accountabilities.

65. Disadvantages include:
    • the need for Maori to affiliate to organisations
    • financial and service risks (including risk rating)
    • higher transaction costs.

RELATIONSHIP TO PROPOSALS FOR ROLE OF DHBS

66. The accompanying paper on the Role of DHBs and the Division of Functions between the DHBs and the Ministry recommends a model which is compatible with an evolutionary approach to building a partnership with Maori at the DHB level. The proposal is to devolve to DHBs as much responsibility for making decisions about health and disability services as they can exercise efficiently and effectively operating within the parameters of the NZ Health strategy.

67. That paper leaves flexibility to develop the way that relationships with Maori are developed under that framework.

68. Aspects of governance issues have been covered in discussing partnership options, but this paper recommends a further report to Ministers on the specific issue of equitable representation on DHBs and their committees.

CONSULTATION

69. In preparing this paper the Ministry of Health consulted with Te Puni Kökiri, the HFA, Treasury, the Ministry of Justice, the State Services Commission, CCMAU, DPMC, and a focus group of Maori health and disability sector representatives. Their views are incorporated in the paper.

FINANCIAL IMPLICATIONS

70. Full identification of the one-off costs and ongoing fiscal impacts of the proposed structural changes will be reported by 31 March 2000 (Cab 00 M2/4 refers).
71. 71. The financial implications of the proposals in this paper have not yet been fully costed but relate to: ˇ the costs of expanding Maori partnership arrangements from the existing ones to include all DHB areas and a national forum under option one for generic partnership arrangements ˇ the costs of delegating functions to Maori organisations under options two or three for partnership arrangements ˇ any additional costs associated with electing or appointing Maori members to DHB boards or committees.

72. Decisions made on the basis of this paper will contribute to a paper due on 31 March 2000 on legislative matters to be included in the Public Health Services Bill.

73. Initial legal review indicates the proposals are compatible with the Human Rights Act 1993, although this would need to be confirmed as options were developed.

74. Attached as Annex 3.

75. Communication on these matters will be included in the communication strategy on the overall sector changes.