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MEMORANDUM TO CABINET SOCIAL POLICY AND HEALTH COMMITTEE
THE DIVISION OF ROLES BETWEEN DISTRICT HEALTH BOARDS AND THE MINISTRY OF HEALTH
PROPOSAL
- I propose that DHBs should ultimately be responsible for the planning and funding of all health and disability support services, with the exception of those determined by the Government.
EXECUTIVE SUMMARY
- Cabinet [CAB (00) M11/1A refers] has previously decided that:
- DHBs will be accountable for funding or providing the mix of services which ensures the best health and independence outcomes for their populations, within available funding
- DHBs will move to a state where they have a high degree of autonomy, but will start out in a highly regulated and prescribed environment
- The Minister of Health (assisted by the Ministry) will play a strong leadership and monitoring role: DHBs will work within the parameters of the New Zealand Health Strategy, the New Zealand Disability Strategy, and nationwide requirements that will form part of Funding Agreements.
- This paper focuses on the ultimate division of roles. In the transition the Ministry of Health is expected to be accountable for the planning and funding of a number of services to give the transitional DHBs the chance to develop. I propose that, apart from exceptions identified by the Government, DHBs will ultimately be responsible for planning and funding all health and disability support services, so that:
- DHBs have an unambiguous accountability for funding the best mix of health and disability support services for their populations, within budget
- local users and communities have a greater say over health and disability support services
- any conflict of interest between the Ministry of Health funding services and funding and monitoring DHBs is minimised.
- Unavoidably, given that DHBs are responsible for a geographic area, some providers will provide services for more than one DHB. Within nationwide frameworks, each DHB must understand and pursue local needs and preferences, and will need the skills and resources to do so. This does not mean that DHBs should aim to deliver all services themselves: DHBs will need to closely collaborate in relation to certain services.
- It would be inappropriate for some services to be planned or funded by each of the 22 DHBs on an individual basis, because concerns are that:
- regional or national organisations may face additional administration costs from multiple, complex contracts with many DHBs, and some services require much inter-district co-ordination
- some small DHBs may find it difficult to manage within budgets when faced with exceptional or unpredictable high-cost services
- parts of the disability sector feel that DHBs may not be appropriate funding agencies, because disability issues are different from health care, and DHBs may put low priority on disability support services
- some small DHBs may find it difficult to plan for services that are rare or require specific expert knowledge
- development in Mäori, Pacific, and mental health, and in disability support, may be put at risk without national management.
- Regulation, accountability arrangements (including funding agreements and monitoring), and powers to direct (if required) give the Minister of Health powerful means to support achievement of necessary co-ordination, specific performance standards and policy objectives. The Ministry of Health will support DHBs through service frameworks and policy guidelines, provision of information and expert advice, and facilitation.
- For a small number of health and disability support services, however, planning and/or funding functions are better undertaken regionally or centrally. This may be done by the Ministry of Health or through DHB collaborative arrangements. There is no systematic way, however, to identify what the best option is without being able to compare actual proposals for DHB collaborative arrangements with the alternative of direct funding of specific health and disability services by the Ministry of Health.
- However, removing funding responsibilities for some services from individual DHBs raises serious risks, namely:
- confusion on who is accountable for prioritisation and improving health and independence of DHB populations - the DHB or another agency
- greater potential for cost-shifting between multiple funding streams, for example by redefining secondary services as tertiary services
- a conflict of interest between the Ministry of Health funding services and funding and monitoring DHBs
- barriers to local service coordination and integration
- reduced responsiveness to local needs, preferences and opportunities.
Unintended consequences could include poorer decisions on service mix and levels, and budget overruns.
- For these reasons, I recommend that, as principles:
- all health and disability services funding should be indicated to DHBs before allocation to any regional or national budget. This will ensure DHBs are aware of which services they contribute to and their costs
- if services need to be planned or funded for at a regional or national level, then, as far as possible, such arrangements should keep DHBs accountable for performance.
- The enhanced HHS boards will report to the Minister of Health by 1 September 2000 with proposals for DHB shared services, and national and regional funding alliances. The HFA, CCMAU and the Ministry of Health will work with the boards on those proposals. I propose that officials report back in November on those plans so that the Ministers of Health and Finance can assess:
- whether the Boards' proposals will be effective at addressing the concerns of additional administration costs and coordination, or whether other funding arrangements should be imposed
- which specific responsibilities for planning and/or funding services should be retained in the Ministry of Health
- what the process and timing should be for devolving all other planning and funding functions to DHBs, guided by the criteria and processes that will be set out in the DHB development framework to be reported to the Minister of Health by November 2000 [CAB (00) M11/1A refers].
- The Director-General has set up a DHB Establishment Unit within the Ministry's Sector Funding & Performance Directorate. This unit, incorporating staff from the Ministry and the HFA and with formal links to other central agencies, will work closely with HHSs and the DHBs once they are established.
- The Ministry of Health, following consultation with officials, will provide a further report on funding options specifically for disability support services. In November, officials will also advise Ministers on enhanced HHS board proposals to address the concerns around disability issues, and the timing of devolving DSS functions.
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