Health Minister Simeon Brown unveils significant health sector reform.

Health Minister Simeon Brown has promised a massive revamp of the public health system, including re-establishing a board and "partnering" with the private sector.

Brown lambasted Health NZ officials for poor leadership and lax controls over the last two-and-a-half years during his speech to an invitation-only Health Forum held by BusinessNZ in Auckland on Friday. He also hinted at plans to reduce the agency's position.

An independent financial evaluation by Deloitte, released on Health NZ's website, revealed that the former government's 2022 health changes were "rushed and poorly implemented, with disastrous results," he added.

"The report clearly demonstrates that under the previous government, Health New Zealand lost control of the critical levers that drive financial and delivery outcomes."

"Meanwhile, Labour's plan was to support unions over patients," Brown told the BBC.

He claimed that as a result, wait times for elective surgery, emergency rooms, and general practitioners increased dramatically while kid immunization rates fell,

"This is a system under significant pressure and a system which was recklessly mismanaged under the past government, thrown into turmoil at the worst possible time, and left to drift without accountability."

Despite nearly doubling the basic operational budget between 2014 and 2024 and significant growth in health personnel, productivity was "declining."

For example, during that time, the initial expert exams increased by only 17 percent, but the waiting list more than doubled to nearly 195,000 persons.

Transition to Local Decision-Making by July

Brown claimed that Health NZ had "failed to create a cohesive team" to lead the organization.

Even though most of the senior leadership team was situated in Auckland, they only recently began weekly in-person meetings after two and a half years.

"Today, I'm outlining my expectations for Health NZ to deliver a nationally planned, consistent, but locally delivered health system."

Brown stated that he has asked Commissioner Lester Levy to "accelerate the shift" to local decision-making and that local delivery plans should be completed by July.

"This will enable local leaders to plan effectively, be clear about their budgets, allocate resources to where it's most needed, and deliver better outcomes for their communities."

Commissioner to Be Replaced by Board

Brown also announced plans to appoint a board for Health NZ, with nominations available in the coming weeks.

"Now that the plan is set, it is time to begin the process of transitioning to traditional governance."

Last July, then-Health Minister Shane Reti dissolved the previous board and appointed Levy as Health NZ's commissioner for a 12-month tenure.

At the time, Levy stated that Health NZ was losing $150 million per month and that he had been charged with creating a "Reset Plan."

In December, Health NZ lowered its predicted deficit for 2024-25 to $1.1 billion, down from $1.7 billion many months earlier - but signaled more restructuring to save $660 million this fiscal year.

Reducing the Elective Surgery Backlog

Brown stated that the current and growing backlog for elective surgery was "unacceptable."

In September, 27,497 individuals had waited more than four months for surgery.

"At the moment, Health NZ performs elective surgery and responds to acute need, with planned elective surgery being disturbed by acute need, leaving patients waiting for treatment and waitlists growing.

"At the same time, the small amount of planned care that is outsourced to the private sector is often done on an ad hoc basis, meaning Health New Zealand is paying premium prices."

It was time to "partner" with the corporate sector so that New Zealand could get good value for money from long-term contracts with them.

"I expect Health New Zealand to work closely with ACC - which already has many of these arrangements in place - to ensure value for money for taxpayers and faster treatment for patients."

As a first start, Health New Zealand will invest $50 million between now and the end of June this year to reduce the backlog of individuals waiting for elective surgery.

"That will see an extra 10,579 procedures carried out between now and the middle of this year, with work also underway now to negotiate longer-term agreements."

He had also requested Health NZ to collaborate with the sector to establish standards for future outsourcing contracts, such as longer-term multi-year deals.

"Long term, I want as much planned care as possible to be done in collaboration with the private sector, freeing up public hospitals for acute needs.

"To be clear, the system remains publicly funded, so everyone has access, but this will allow Health New Zealand to leverage private capacity to reduce wait times for patients."