Health NZ’s responsibility for developing the national health plan will likely begin with hospital configurations in the context of networks. The culture that is the basis for determining the services that should be provided at Gisborne Hospital, for example, will determine the quality of the outcome. Photo: RNZ Pacific

An omission from the Pae Ora Act is a major deficit, write political opposites Ian Powell and Heather Roy, in the second part of their series on Te Whatu Ora

The New Zealand Public Health and Disability Act 2001 marked a return to cooperation from competition as the driver of the public health system. Although the writers differ on which was best, we are agreed that based on subsidiarity, one of the most distinctive features of the Act itself was the requirement for integrated care between primary and secondary (hospital). This featured in the Act’s purpose and in the responsibilities of DHBs.

It correctly identified that by focusing horizontally between care in communities and care in hospitals, the health and wellbeing of the public would be significantly improved. This was part of the endeavour to establish empowered localities in some DHBs. But the healthcare and fiscal benefits were most acutely demonstrated by the health pathways pioneered by Canterbury DHB (discussed further below).

* Part One: How Te Whatu Ora can succeed: Put patients first
Mental health ‘invisible’ in health system revamp

Unfortunately, integrated care does not form part of the Pae Ora Act. This omission is a major deficit of the legislation. Instead of horizontal, the processes for decision-making have become more vertical. And yet this horizontal integration is where the most significant healthcare improvements can be made from within the health system.

This weakness creates a major challenge for Te Whatu Ora. To help overcome this difficulty, the new body will need to work hard on integrating community and hospital care as a matter of policy rather than legislation. Public hospitals and community care providers should be encouraged to focus on this.

Ideally the new localities could play a constructive role. But first they have to exist and, second, they have to be empowered and representative of its communities and providers. Close collaboration with local city and district councils will also be important.


Culture is the most decisive driver of the effectiveness of a health system. Patient-centred care can’t be achieved without the right culture. In general terms, culture encompasses the social behaviour, institutions, and norms found in human societies, as well as the knowledge, beliefs, arts, laws, customs, capabilities, and habits of the individuals in these groups.

Cultural change focuses on the influence of ‘cultural capital’ (people’s social assets) on individual and community behaviour. In health systems, cultural change can be described as repositioning or reconstruction of culture whereas cultural capital can also be taken to mean or include intellectual capital.

On the one hand, it is a mantra in the health system that culture trumps restructuring (and strategies) when seeking to achieve sustainable system improvement. On the other hand, this ‘sacred utterance’ can be quickly forgotten when system improvement is being considered, especially when politically, ideologically, or business consultant driven.

This latter forgetfulness unfortunately prevailed in the replacement of DHBs by Te Whatu Ora. Consequently it will be even more important for it to grasp and adhere to engagement based and driven culture as the driving force of sustainable system improvement.

The intellectual capital in the delivery of healthcare in health systems predominantly resides with those different but integrated professional occupations which are responsible for the diagnosis and treatment of patients. No sector in New Zealand has such a concentrated critical mass of intellectual capital as our health system (few sectors, if any, have as much). It is the best resource Health New Zealand has to draw upon.

Consequently, Te Whatu Ora’s leadership and system culture should ensure that through engagement (a stronger word than more limited and formal consultation), decision-making should be distributed as close to the workplace as practically possible. It should commit to workforce empowerment as the main driver of innovation and sustainable system improvement. As a general rule, those who do the job know best how to improve it.

In other words, Te Whatu Ora should commit to and require ‘distributed clinical leadership’ to be the workplace ‘business as normal’ in order to achieve continuous quality improvement. We use the word ‘clinical’ broadly to include diagnosis, population health, and all health professionals. Governance shouldn’t be allowed to unduly constrain or obstruct this leadership culture from flourishing; instead it should require it to operationally flourish.

This distributed leadership is different from formal clinical leadership with designated positions such as clinical director and head of department. These positions are important but only a small part of the clinical leadership potential of the wider workforce.  

This is especially important because of Health New Zealand’s responsibility for developing the national health plan as required under the Pae Ora Act. It appears more likely that at a practical level this will begin with hospital configurations in the context of networks. The culture that is the basis for determining the services that should be provided at Gisborne Hospital, for example, will determine the quality of the outcome.

Decision-making needs to be based on local engagement, including with health professionals and communities whose expertise and experience is essential for ensuring the right outcome is achieved. On the other hand, if decision-making is instead based more on distant (centralised) and prescriptive desktop analysis and only limited formal local consultation, then the outcome is destined to be poor for the healthcare of the population that depends on Gisborne Hospital.

Health systems are arguably the most complex of all systems in a developed country. This complexity is a huge challenge but the capabilities (but not the capacity) exist within its health professional workforce. The numerous clinically developed and led health pathways between community and hospital care, first developed by the innovative Canterbury DHB (CDHB), demonstrate the value of distributed clinical leadership.

These health pathways became means by which Canterbury was able to develop the most effective acute demand risk management system. Nationally, for some years, acute hospital demand has increased at a greater rate than population growth. CDHB succeeded in bending the curve of rising demand. It is interesting that Canterbury DHB’s innovative integrated care has had a significant influence in the development of ‘integrated care systems’ in the National Health Service in England.

Te Whatu Ora should commit to taking the successful lessons of distributed clinical leadership of Canterbury (which also includes impressive innovation within and between hospital services) as the basis of its strategic and operational culture.


Centrality of the health professional workforce to ensuring accessible patient-centred care highlights the priority of addressing, as a matter of urgency, the severe and extensive health professional shortages. By health professionals we refer to doctors and dentists, nurses, and allied health professionals. They are the wherewithal to deliver patient-centred care and the drivers and implementers of innovation.

Allied health professionals are an underestimated and very diverse group of the workforce. They provide a range of diagnostic, technical, therapeutic, and support services in the health system. Their specific occupational groups include physiotherapists, perfusionists, physiologists, psychologists, scientists, anaesthetic technicians, physicists, audiologists, laboratory technicians, and dieticians.  

The extent of the severe shortages among all health professionals is worse than being in a crisis; it is beyond that. The outcome ranges from presenteeism (working while ill) to fatigue to burnout. The consequence is not just that the health of this exhausted workforce suffers. Too many patients are denied access to the healthcare that they need. Those who are fortunate to access healthcare often receive it in sub-optimal conditions which increases the risk of errors leading to adverse patient outcomes.

The national responsibility for workforce development and planning has, for various reasons, been ineffective, which made it more difficult for DHBs to address. This responsibility now rests with Te Whatu Ora. If it is going to ensure timely and accessible patient-centred care, then it must give high priority to developing practical strategies for both recruitment and retention.

Generally, and for good reason, when considering recruitment and retention, more emphasis is placed on the latter. A workplace with high retention (ie, low turnover) is more attractive for recruitment than one that is not (within hospitals these workplaces are sometimes known as ‘magnet departments’). However, the shortages are now so severe, and made more difficult by the aging of the workforce, that the greater emphasis needs to be on recruitment.

While each of the multiplicity of occupational groups have severe shortages, there is much variability in their labour markets. Length of training is an influential factor. The shorter the training for an occupational group (say three years), the better the ability to address shortages by training more in New Zealand. The longer the training (13 years minimum for medical specialists is the longest), the greater the reliance on international recruitment.

The variability of labour markets means that competition is also variable. It can include with the private health sector, outside the health system (for example, laboratory scientists are highly employable in the wine industry), or internationally (especially Australia) which is the case for medical specialists, nurses, and some allied health professionals.

Australia is important not just for its proximity and similar training. Although less severe, Australia has its own shortages. By offering much higher remuneration and other conditions (in 2019 BERL estimated the basic 40-hour pay gap for medical specialists to be over 60 percent), Australia is able to recruit specialists and nurses from New Zealand.

But the effect of this is worse. Australia can easily compete with New Zealand when recruiting from other parts of the world. HNZ will not be competing for specialists and nurses in Australasian labour markets; it will be competing in Australian labour markets.

The relevant health unions and professional bodies need to develop practical recruitment strategies targeted at the specific occupational groups, and the different labour markets in which they are situated. This should include competitive remuneration and other conditions to give substance to the strategies.

For the foreseeable future Aotearoa New Zealand’s health system will depend on successful international recruitment for much of its health professional workforce. This requires immigration policy settings and culture to be ‘fit-for-purpose’. Unfortunately, present immigration settings fall well short of this threshold and are completely inconsistent, thereby adding to the crisis confronting the existing workforce.

It is positive that Te Whatu Ora proactively advocated to address the ridiculous immigration policy of placing nurses on the residency B list rather than the A List. The Government, however, waited far too long to change policy settings when the shortage situation and its repercussions were obvious to all. This would have influenced the subsequent position of the Immigration Service. But much more is required to ensure that immigration policy settings and culture resonate, and are consistent with the workforce needs of the health system.

Social determinants of health

Just as patient-centred care is essential for the diagnosis, treatment, and wellbeing of patients, Te Whatu Ora must also be population focused. A critical part of this focus should be a requirement to recognise and act on the importance of both mitigating and eradicating external social determinants of health. These determinants include low incomes (the most important), poor housing, limited educational opportunities, and social and community contexts. They are a major obstacle to the provision of patient-centred care.

This focus has to be at the forefront of the new health system. It is accepted that because the causes of these determinants are external to it, the most the health system can do is to mitigate their impact.

The negative consequences of these determinants for the health system include increasing chronic illnesses (requiring continual ongoing treatment), and increasing acute hospital demand. With an empowered innovative workforce with the right capacity and ability to operate in a distributed leadership engagement culture, much can be done to mitigate the consequences of these determinants. The successful integrated care health pathways between community and hospital are an example of what is possible, but their potential (including cost-effectiveness) is immense.

While mitigation is important, government policies and legislation are required if Aotearoa is going to assertively move towards eradication. Although the authors have conflicting views on the Smokefree Environments and Regulated Products (Smoke Tobacco) Amendment Bill currently before Parliament, potentially it might become a positive example of this approach. A smaller but important example is the shifting of fluoridation decision-making to the Director-General of Health. Further legislative and policy initiatives increasing alcohol control could also be considered.

Te Whatu Ora should adopt an advocacy role for policies and legislation to be developed which contribute towards the eradication of these specific determinants. Similarly it should enable and incentivise its localities to advocate such measures drawing upon their understanding of the impact of these determinants in their communities.


Localities are a feature of the Pae Ora Act. Prior to the Heather Simpson-led Health and Disability System Review (2020), some DHBs had been exploring the formation of localities in response to vulnerabilities in the provision of primary and other community healthcare. Counties Manukau, MidCentral, and Capital & Coast were examples.

The Review proposed the formation of localities, referring to positive developments with MidCentral DHB in particular. These would replace Primary Health Organisations, with the DHBs taking over the higher transaction costs of the population, and other data analysis functions of PHOs.

In addition to MidCentral, the Review may have been influenced by the much smaller South Canterbury DHB which, with Government approval, had taken over the PHO’s functions (which were largely carried out by a third party) in order to establish a more direct relationship with the general practices. This proved to be successful, including greatly improving the previously fraught relationship between SCDHB and general practices. Given time, it was expected that this would have extended to other community healthcare providers. This was a good example of local solutions to local problems.

As proposed by the Review, localities would be responsible for working with, and supported by, their DHB, including in the development of locality plans. They would have been akin to empowered networks, unencumbered by administrative transaction costs.

These localities were to be made up of primary and other community healthcare providers such as general practices, pharmacies, dentists, and physiotherapists. By joining them up together on a relational basis there is the potential for improving accessibility to community healthcare and identifying unmet healthcare need in order to address it. In other words, they could have become empowered localities because of their DHB relationship as a point of statutory decision-making.

Localities also feature in the Pae Ora Act. However, as a consequence of the abolition of population-focused DHBs, they are not the same as envisaged by the Simpson Review. Further, localities are at best only at the embryonic stage of development. There are to be 80 localities nationwide but to date there are only nine, not all operational and full implementation is not envisaged until as late as July 2024. Consequently it will be necessary for Te Whatu Ora to proactively engage with local government to help fill the vacuum where localities are not established and fully operational. This engagement should continue following their establishment and becoming operational.

Health New Zealand (working with the Māori Health Authority) will determine both the membership of locality boards and their locality plans. Due to the more distant relationship with the new point of statutory decision-making, this top-down structure risks undermining the potential of localities.

If localities are to achieve the potential envisaged by the Simpson Review, Te Whatu Ora will need to ensure that this risk of undermining the potential of localities does not materialise. This requires sufficiently empowering and resourcing them with the right capabilities and by requiring them to be representative of their communities and providers.

It will also require close networking with the local public hospital(s) if integrated care between community and hospital is to be advanced, including implementation of clinically led and developed acute demand management measures learning from the experience of the former Canterbury DHB.

The final part of the Powell and Roy series, running tomorrow, ends with a warning: lessons of the past must not be forgotten.

Executive director of the Association of Salaried Specialists for more than 30 years until 2019, Ian Powell is now a health commentator and publisher of a health systems blog Otaihanga Second Opinion and...

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