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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
CABINET
DIVISION OF PLANNING AND FUNDING ROLES
- agreed that District Health Boards (DHBs) will progressively move to the appropriate degree of devolved responsibility for planning and funding health and disability support services, as determined by the Government;
- noted that the Minister of Health can, if required, use accountability arrangements and powers to direct to achieve necessary co-ordination among DHBs, as well as specifying performance standards and policy requirements;
- noted that the planning and funding of some health and disability support services is better undertaken regionally or centrally by collaborative DHB arrangements, or in some cases by the Ministry of Health;
- noted that the enhanced Hospital and Health Service (HHS) boards will be reporting to the Minister of Health by 1 September 2000 with DHB transition plans which will include proposals for collaborative DHB arrangements such as national and regional health and disability services funding alliances;
- directed the Ministry of Health, in consultation with the Treasury, State Services Commission, Crown Company Monitoring Advisory Unit, Department of the Prime Minister and Cabinet and Te Puni Kokiri, to advise the Ministers of Health and Finance and the Cabinet Committee on Social Policy and Health (SPH) by the end of June 2000 on:
the advantages and disadvantages of the DHB transition plans;
which specific health and disability services funding responsibilities might be undertaken by collaborative DHB arrangements, and which by the Ministry of Health (following the framework that is discussed in the paper attached to CAB (00) 319;
how planning and/or funding responsibilities for all other health and disability support services will be devolved to DHBs following their establishment, including a timetable, according to the DHB development framework which will set out the criteria and the process to steer the transition;
- noted that a DHB Establishment Unit has been set up by the Director-General of Health, within the Ministry of Health, to incorporate staff from the Ministry and the Health Funding Authority (HFA), maintain formal links to the other central agencies and work closely with HHSs/DHBs;
- agreed that formal responsibility for managing DHB establishment issues rests with the DHB Establishment Unit referred to in paragraph (f) above;
DISABILITY SUPPORT
- noted that the following governance and accountability levers are available to give a clear identity to disability issues and to drive national consistency and performance in disability support services:
the New Zealand Disability Strategy, to articulate priorities and expectations;
DHB funding agreements, to set down specific performance accountabilities for disability issues on which DHBs are monitored;
appointments to the DHB Boards, to ensure the board has knowledge of disability issues where it is lacking;
the provision to set up additional advisory committees of DHB boards (e.g. a disability issues committee), to give disability issues a clear identity;
- noted that the Minister for Disability Issues and the Minister of Health will write to the enhanced HHS boards to ensure that the boards' transition plans will include proposals for how they would address disability issues;
- noted that the Ministry of Health (following consultation with other officials) has submitted a further report to the Minister for Disability Issues and Minister of Health on funding options for disability support services, which Ministers will submit to the Ad Hoc Ministerial Committee on Sector Change and then to SPH, to inform decisions on the division of planning and funding roles for disability support services;
RESIDUAL MINISTRY OF HEALTH SERVICE FUNDING AND ACCOUNTABILITY
- noted that the Ministry of Health will be accountable for planning and funding a number of health and disability support services during the transition period, until responsibility for planning and funding all agreed health and disability support services is devolved to DHBs;
- agreed that Ministry of Health spending on health and disability services will be funded through a separate output class in the Ministry's Estimates of Expenditure;
- directed the Ministry of Health, the State Services Commission, and the Treasury to report back to the Ministers of Health and Finance and then to SPH on accountability arrangements for each health and disability support service to be funded directly by the Ministry of Health on an ongoing basis, with an initial report back by the end of November 2000, to ensure that:
there is a clear definition of the health and disability support service to be directly funded;
non financial and financial monitoring arrangements are sufficient for the purposes of service delivery and financial control;
conflicts of interests between the Ministry's planning, policy, funding and monitoring roles and dilution of DHB accountabilities are minimised;
- agreed that, to facilitate standardised contracts and reduce transaction costs on all parties, the new legislation incorporate the ability of DHBs and the Ministry of Health to issue notices with the terms and conditions for payment of providers (currently referred to as "section 51 notices");
- agreed that the New Zealand Public Health and Disability Services Bill provide for the Ministry of Health to contract for health and disability services with non-DHBs on behalf of the Minister of Health;
PRINCIPLES
- agreed that:
initially DHBs will be subject to strong central control - they may be responsible for only a limited range of services with the balance being funded directly by the Ministry of Health;
additional responsibilities will transfer to DHBs as and when they have clearly demonstrated that they are capable of dealing with them;
if a DHB's performance is not good enough, it will not be allowed to expand its responsibilities, and if performance deteriorates the Government will be able to withdraw functions from DHBs and return them to the Ministry of Health;
responsibility for funding some tertiary and quaternary hospital services, some disability support services, and some public health programmes and services delivered by national organisations will remain at the national level indefinitely;
- noted that the Minister of Health expected a report from her officials on public health programmes by November 2000;
invited the Minister of Health to bring that report to SPH as soon as possible;
- agreed that, as a principle, all funding for health and disability support services (and subsequent reports on expenditure) be indicated to DHBs before allocation to any regional or national budget;
- agreed that DHBs be responsible for managing the financial risks of all services for which they are responsible (including costly and unpredictable services) in accordance with requirements set out in their funding agreements regarding 'operating environment policy' (which will also define specific circumstances in which risks would be managed by the Crown);
EXCEPTIONS IDENTIFIED TO DATE
- noted that there will be specific exceptions to the general principle that DHBs will ultimately have responsibility for planning and funding all health and disability support services;
- agreed that decisions on future arrangements for national screening programmes be made at a later date, when officials can ascertain how this will be managed within the DHB environment and when the results of the Gisborne Cervical Screening Inquiry are known;
- agreed that, following a process of consultation with DHBs and forecasting by PHARMAC, the Ministry of Health will advise the Minister of Health on the 'notional' pharmaceutical budget requirement to which PHARMAC will work to manage the Pharmaceutical Schedule;
- agreed that, in future, DHBs will be advised of the PHARMAC forecast of expenditure for their population, but that each DHB will be responsible for managing their pharmaceutical expenditure within the whole population-based funding budget allocated to them, and they will be charged for the actual pharmaceutical expenditure of their population;
CONSULTATION
- directed the Ministry of Health to consult the Ministry of Pacific Island Affairs on future health reform papers.
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