Objective

1. The division of roles should contribute to the Government's objectives for the health and disability support sectors - improving the health and independence of the population, reducing disparities, and improving community participation in health and disability support - in the most effective and least-costly manner.

   Statement of the problem and the need for action

2. Although DHBs will ultimately be responsible for planning and funding health and disability services, DHBs are unlikely to be able to do this individually for those health and disability support services which: span DHB districts; may be difficult for individual DHBs to manage financially; are developing; or which concern disability issues which are of a different nature.

   Feasible options to achieve desired objectives

3. The paper takes each issue in turn and assesses the relative merits of:

   1. collaborative DHB arrangements, with accountability arrangements and administrative and policy support from the Ministry of Health

   2. direct planning and funding of specific services by the Ministry of Health.

   3. separate local funding structures in the case of disability support.

4. The proposal is 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. The exceptions will be identified during the implementation phase in a report-back in November to the Ministers of Health and Finance.

   Non-regulatory measures

5. The division of roles, and the extent and timing of devolution, can be largely managed within legislative provisions already decided on.

   Regulatory measures

6. The proposals include provision in the New Zealand Health and Disability Bill

   1. for the Ministry of Health to contract for health and disability services with non-DHBs, on behalf of the Minister of Health to facilitate standardised contracts and reduce transaction costs on all parties

   2. the ability of DHBs and Ministry of Health to issue notices with the terms and conditions for payment of providers.

   Statement of the net benefits of the proposals

7. The exact net benefits of the proposals will not become known until Government has decided on the exact planning and funding arrangements for the types of services that are considered in this paper.

8. The arrangements are designed to improve co-ordination in planning and funding and minimise administrative costs, keeping DHBs accountable for funding the best mix of health and disability support services for their populations, within budget, and giving local users and communities a greater say over health and disability support services.

   Consultation

9. The following agencies were consulted in preparation of this paper: the Health Funding Authority and Pharmac, Crown Company Monitoring Advisory Unit, Department of the Prime Minister and Cabinet, the Treasury, Te Puni Kokiri, the State Services Commission, and the Office of the Auditor-General.