SPECIFIC SANCTIONS FOR DISTRICT HEALTH BOARDS REQUIRED FOR INCLUSION IN LEGISLATION
   

MEMORANDUM TO CABINET SOCIAL POLICY AND HEALTH COMMITTEE

SPECIFIC SANCTIONS FOR DISTRICT HEALTH BOARDS REQUIRED FOR INCLUSION IN LEGISLATION



REGULATORY IMPACT STATEMENT

    Objective

  1. The policy objective is to motivate good DHB performance through using an incentives-based framework. This will support transparency, and provide certainty that the appropriate measures will be taken to ensure that the Government's and the public's expectations are achieved over time. The sanctions included in the New Zealand Public Health and Disability Bill will provide a safety net to protect the Crown's fiscal and other interests in DHBs.

    Statement of the Problem and the Need for Action

  2. The problem is to ensure that DHBs are clear about the Government's performance requirements and the associated rewards and sanctions that will apply in the case of performance/non-performance.

    Feasible Options to Achieve the Desired Objectives

  3. The paper concludes that the incentives-based framework will include using non-legislative and legislative rewards and sanctions. However, to ensure transparency, the more serious sanctions which involve high levels of intervention in the DHBs' governance and operations should be included in legislation.

    Non-regulatory Measures

  4. The rewards and sanctions that will operate below a legislative level will be canvassed in a separate report back to Ministers due by 31 November 2000. This will cover criteria for their use and an escalation path.

    Regulatory Measures

  5. This paper recommends that the mechanisms outlined below are incorporated into the New Zealand Public Health and Disability Bill to sanction the Board of a DHB. These are 'last resort' sanctions that would be applied after non-legislative sanctions have not resolved issues, or the specific situation warrants a more severe sanction to be applied.

    1. the ministerial power of direction

    2. the appointment of a Crown Monitor to report back to the Minister on the performance of the Board

    3. the replacement of the Chair and/or the Deputy Chair of the Board

    4. the replacement of the Board with a Commissioner.

Statement of the Net Benefit of this Proposal

    Benefits

  1. The key benefits of having the most severe sanctions incorporated in legislation will:

    1. ensure that the Minister of Health has the legal ability to apply serious sanctions on the Boards of the DHBs

    2. mean that from the outset the DHBs and the public will be aware of the most severe sanctions the Government can use to ensure that its objectives are met.

    Costs

  2. The cost of including sanctions in legislation is that DHBs and the community may perceive these as being those sanctions that that the Government will use on a routine basis. These sanctions, however, will only be used in the most extreme cases. Non-legislative sanctions, for example more intensive monitoring by the Ministry of Health, will be able to identify and resolve most performance issues.

    Consultation

  3. The following agencies were consulted in the preparation of the attached Cabinet paper: Health Funding Authority, Crown Company Monitoring Advisory Unit, Department of Prime Minister and Cabinet, The Treasury, and the State Services Commission.



 
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