Conclusion
47. Officials consider that, given the parameters already set, the structure and relationships between the committees, the DHB and the Chief Executive should be as follows:
    1. Health Improvement Advisory Committee advises the DHB Board on health improvement priorities and the prioritisation process for health services for the DHB population. A relationship is maintained with the Chief Executive, but this is not an accountability relationship
    2. Hospital Governance Committee advises the DHB Board on the hospitals performance. In assessing hospital performance it would need to monitor the hospital against the performance expectations set in the annual plan and other relevant accountability documents. A relationship is maintained with the Chief Executive who may be required to provide reports to the Hospital Governance Committee on hospital performance in order to inform performance monitoring.
    3. The DHB Board may also delegate authority to the Hospital Governance Committee to undertake specific tasks.
    4. Chief Executive maintains overall accountability to the DHB Board for the management of the DHB. The Chief Executive will function as directed by the DHB Board.
    5. The DHB Board maintains its governance capacity to focus on high level strategic issues and to receive advice on these matters from its committees.

48. It is proposed that a review of the effectiveness of the DHB Committees in fulfilling their functions and assisting the DHB Board in managing the DHB occur periodically. To allow for any review of the roles of the DHB Committees to be easily reflected in their future operation it is proposed to establish the requirement to form committees in legislation and their overarching objective in regulation. Any review of committees would occur in the context of overall sector and DHB performance monitoring.

49. Officials have not discussed how the DHB organises itself internally at a managerial level since this is not likely to be a matter for legislation and will be the responsibility of the Chief Executive. It is recognised however that this will be important for the effectiveness of the system. It is expected that there would be a strong internal separation between planning/funding and service delivery with service level agreements linking the two sides of the DHBs operations.

    Size and Membership of Board Committees

    Size

50. The size of committees should be determined by the Board and will be constrained by the overall budget of the Board.

    Membership

51. Given the overall accountability of the DHB Board, all positions on the DHB committees should be appointed by the DHB Board. The Board is likely to form committees with a majority of Board members with external appointees as required for skill mix. Committees should also be able to obtain additional advice as and when required.

52. ctual membership of the committees would reflect the overarching objectives as detailed in regulation, and the decision that committees will have equitable representation of Mäori (CAB(00)M2/4 refers).

53. It is not desirable that the detailed composition of committees is spelt out by Government, as each DHB will be different and will have to establish committees which are fit-for-individual-purpose, for example the needs of the West Coast DHB Committees may not be identical to the needs of Auckland Central DHB. The Government will expect, however, that the DHB Boards appoint committees with the skills, experience and expertise to ensure that they receive sound advice.

54. Cross membership between the Hospital Governance Committee and the Health Improvement Advisory Committee within one DHB should be excluded, or restricted, but at the discretion of the Board. The reason for this is to ensure that the streams of advice objectively reflect the two 'interests' in the organisation (this constraint need not be extended to other committees the Board may establish, including the Audit and Finance Committee). Given the possible skill shortages within DHB Boards it is appropriate to give the Boards flexibility in this regard recognising that they will be accountable for ensuring that any committee member does not undermine the focus and function of the committee.

    Committee meetings

55. Cabinet has decided that DHB Board meetings will be open to the public [CAB(00)M11/1A(3)vv refers]. It is likely therefore that committee meetings should also be open to the public to avoid DHB Board issues being inappropriately considered by committees in order to keep them out of the public arena. If committee meetings are open to the public, the committees will need to reserve the right to 'go into committee' on particular agenda items.

CONSULTATION

56. This report was prepared by an interagency working group led by the Ministry of Health, and including Te Puni Kökiri, DPMC, The Treasury, the Health Funding Authority, CCMAU, and the State Service Commission.

FINANCIAL IMPLICATIONS

57. Full identification of the one-off costs and ongoing fiscal impacts of the proposed structural changes, including those related to the DHB Committees, will be reported back in the final paper on fiscal implications in May.

58. The financial implications of the proposals in this paper have not yet been costed but relate to:
    1. payment for members to sit on Board committees
    2. committee functions (holding meetings, producing reports etc)

LEGISLATIVE IMPLICATIONS

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

HUMAN RIGHTS ACT 1993

60. There are no Human Rights Act 1993 implications in this paper.

REGULATORY IMPACT STATEMENT

61. A Regulatory Impact Statement prepared in accordance with the requirements set out in CO (98) 5 prior to submission to Cabinet is attached.

PUBLICITY

62. 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.

CABINET

1. noted that options for District Health Board (DHB) committees have been considered: within the parameters set by Cabinet decisions that there will be two DHB committees [CAB (00) M 2/4 refers]; and according to the Minister of Health's letter to the Director-General of Health, which states: "this model provides for a single Chief Executive for each DHB and Primary Health and Hospital Governance sub-committees as a minimum (as set out in Labour Party policy). The Chief Executive will be responsible for the management of all the DHB's functions, including delivery of services by publicly owned hospitals";
2. agreed that the two committees - the Hospital Governance Committee and the Primary Care Advisory Committee (see paragraph (g) below) - undertake an advisory role to DHBs;
3. agreed that the DHB Board be able to delegate its powers to a committee on the basis that the DHB Board remains accountable for any action taken by that committee;
4. agreed that the Chief Executive be accountable for all the operations of the DHB (including the hospital(s)) and be directly accountable to the DHB Board for exercising this function;
5. noted that the role of the DHB Board is to provide governance, strategic oversight and overall accountability for the DHB to the Minister of Health;
6. agreed that, to avoid confusion about the Chief Executive's responsibility to the DHB Board, the committees be subordinate to the DHB Board and decisions of the committees will be ratified or rejected by the DHB Board except where the Board has explicitly delegated authority;

HEALTH IMPROVEMENT ADVISORY COMMITTEE (PRIMARY CARE ADVISORY COMMITTEE)

7. agreed that the "Primary Care Advisory Committee" referred to in paragraph (b) above, be known as the "Health Improvement Advisory Committee", recognising that the interest of this committee is wider than primary care provision, and includes all services required by the DHB population;
8. agreed that the focus of the Health Improvement Advisory Committee be to provide advice to the DHB Board on the needs of the population and priorities for utilising scarce health funding (within the framework established by the New Zealand Health and Disability Strategies);
9. noted that the focus referred to in paragraph (h) above aims to ensure that the best interventions (both primary and secondary focused) are adopted by the DHB in order to achieve overall health improvement for the DHB's population;
10. agreed that the membership of the Health Improvement Advisory Committee be chosen by the DHB Board;
11. agreed that the DHB Board will be responsible for ensuring an appropriate mix of skills and expertise on committees;
12. agreed that the Health Improvement Advisory Committee be able to obtain external advice as necessary in fulfilling its functions;

HOSPITAL GOVERNANCE COMMITTEE

13. m agreed that the Hospital Governance Committee focus on: monitoring the performance of the hospital (and related DHB-owned services); strategic issues associated with the provision of hospital services; and provide advice and recommendations to the DHB Board in this regard;
14. agreed that the membership of the Hospital Governance Committee be chosen by the DHB Board;
15. agreed that the Hospital Governance Committee be able to obtain external advice as necessary in fulfilling its functions;

OTHER ISSUES

16. agreed that cross-membership between the Hospital Governance Committee and the Health Improvement Advisory Committee within one DHB should be excluded, or restricted at the discretion of the Board (this constraint need not be extended to other committees the Board may establish, including the Audit and Finance Committee);
17. agreed that DHB Boards be required to establish an Audit and Finance Committee, but that this requirement not be included in legislation;
18. agreed that DHB Boards can establish other committees as they see fit;
19. agreed that a review of the effectiveness of the DHB Committees in fulfilling their objectives occur periodically;
20. agreed that, to allow for any review of the roles of the DHB Committees to be easily reflected in their future operation, the requirement to form committees be reflected in legislation and their overarching objectives in regulation;
21. noted that officials have not discussed how the DHB organises itself internally at a managerial level since this is not a matter for legislation and will be the responsibility of the Chief Executive;
22. agreed that DHB Hospital Governance Committee and Heath Improvement Advisory Committee meetings should be open to the public.

Hon Annette King
Minister of Health