Health and Disability Sector Reform

Stephen McKernan

Director – Transition Unit (TU)

Kia ora koutou

During this time, with the highly infectious Delta strain of COVID-19 in the community, it's important that we acknowledge our outstanding health workforce, the vast majority of whom are at the forefront of our response. The countless hours they’ve put in, and huge collective effort to keep our community tested, vaccinated and safe is incredible, and greatly appreciated.

We are very aware that our health system is currently under significant pressure. With this in mind, our first consideration in the Transition Unit, is to ensure that we don’t further impact people in the health sector, especially those directly responding to the COVID-19 response. At the same time, our work does need to continue if we are to realise the ambitions of this reform programme which has at its heart, a strengthened health system in the future.

The health reforms remain on track, and we are confident that we will meet key milestones that will ensure that the new health entities – Health New Zealand and the Māori Health Authority – will be in place from July 2022. However, and in light of the outbreak, we are reviewing our work programme to ensure that we continue with critical elements of the reform, such as progressing with legislation, and the establishment of the interim entities, and other areas of work, without having a direct impact on the sector.

We've made great progress since Minister Little announced the health reforms in April this year – and like you, I am committed to maintaining that momentum and delivering on the reform ambitions. I look forward to providing you with further updates in the coming weeks. In the meantime, look after yourselves and stay safe.

News in brief:

  • Board appointments: The Transition Unit is working with the Minister of Health's Office to finalise the process around appointment and announcement timings for the interim Boards of Health New Zealand and the Māori Health Authority. The Minister expects to make an announcement about Board appointments in September.

  • Public Health news: The Ministry of Health announced in early August the appointment of Simon Everitt as Director, Public Health Agency Establishment. Simon's focus will be on setting up the interim Public Health Agency within the Ministry of Health. The interim Agency will be established in September 2021 and will be the first component of the new Ministry to be designed as part of the wider health reforms.

  • CE recruitment update:The Transition Unit has appointed Mana Recruitment(external link) and the Hardy Group(external link) to begin the search for interim chief executives for the Māori Health Authority and Health New Zealand. Advertising for these roles is likely to appear in the market during September.

Discovering great insights into 'localities'

The Transition Unit has made good progress in our work to catalogue and understand existing sector practice and enablers that would support a population health approach to 'localities.' Localities is a term that's being used to help underscore the 'nationally coordinated, locally-driven' aspect of the future health system. A locality is a geographic concept – it's about tailoring services to meet the needs of people in a particular place.

As part of this work, insights have been gathered from a range of sources including DHBs, PHOs, the GM Māori network in DHBs and a range of other stakeholder groups. Engagement is also underway with a kaupapa Māori reference group, Pacific providers and other community-based providers.

Transition Unit Deputy Director Martin Hefford says that based on the information collected from the initial discovery phase, it’s clear that a number of districts have begun planning for or are already implementing a 'locality approach', and the Transition Unit is seeking to understand and learn from these experiences.

"Initial findings from the discovery phase reinforce the importance of local relationships and the time and investment required to build trust. Other key insights include the importance of having a common purpose and agenda, shared measurement that reflects what’s important to communities and whānau, and a strong support function which is able to coordinate and foster collaborative ways of working across providers," says Martin.

Also identified were a number of examples of integrated models of care across key care pathways such as mental health and addictions, māmā and pēpē, rural models and cross-sectoral initiatives aimed at uplifting the wellbeing of communities. The design and development of localities will seek to build on these existing arrangements and what’s already working well across the sector.

Martin says that more detailed discussions with PHOs, DHBs, iwi/Māori providers and other key stakeholder groups are planned to gain insight into good practice and emerging ideas and innovation, as well as insights into the things that haven’t worked so well. This also includes findings from the Hauora Māori discovery work that are currently being collated.

Alongside the discovery phase, the Transition Unit is also working on developing an approach to prototyping the locality model with a small number of initial locations. This includes confirming the initial selection principles, criteria and process. The prototypes are intended to be the first localities in the future system and will provide critical insight and feedback to help refine the approach before implementation more widely across the system. The prototypes are planned to be up and running in early 2022.

Engaging with Iwi Māori Partnership Boards

The Hauora Māori team within the Transition Unit has planned a series of hui with the current Iwi Māori Partnership Boards to explore their future role and the functions they will undertake in the future health system.

The engagement will focus on the development of a transition plan that can help shift the Boards towards their roles in the future. As part of the engagement, the team will also provide the Boards with a capacity assessment tool to help identify any areas for development that we hope will help further support a transition to the future.

The engagements were planned to take place in mid-to-late August and be face-to-face, but due to the current challenges with COVID-19, the start of the engagement has been delayed, and the hui will now be virtual. This will mean the engagements will continue until mid-September and may need to be extended further.

Developing the NZ Health Charter

The Transition Unit Health Charter team has been working closely with health unions, industry/peak bodies and other sector representative groups to develop an effective engagement approach for developing the Charter with people working in the health sector.

Andrew Norton, who leads the workstream within the Transition Unit says, "The NZ Health Charter is essentially a way to support the culture, behaviour and respectful relationships we wish to see between those working in the health sector.  It will also help to enable better services for those who use the services, and better health outcomes for all New Zealanders. We also expect the Charter to strengthen our obligations to Te Tiriti o Waitangi and to all those served by the sector.  It is essential that this is developed by the workforce for the workforce."

The Transition Unit is planning a two-phased approach to engage with the sector on the Charter.

Phase one, which will run from September to December 2021, will focus on exploring ways that the Unit can get ideas and test assumptions for developing the Charter with key stakeholder groups such as unions, industry/peak bodies and other sector representative groups.

This will be followed by a second phase, between January to May 2022, which will be much more extensive.

Andrew says the second phase will include extensive engagement with the wider health workforce, through the form of face-to-face workshops, surveys and a mixture of other online and face-to-face methods.

“During this phase, we will aim to reach as much of the health workforce as possible, so they can help develop the shape and content of the Charter.”

Data and Digital are ambitious

Two ambitious digital and data initiatives in the health sector – the Finance, Procurement and Information Management System (FPIM Oracle) and Health System Catalogue (HSC) Programmes – continue their momentum.

Better data, better systems for better health outcomes is a goal of the programme.

The FPIM programme is implementing FPIM Oracle across a number of DHBs, replacing existing finance systems and implementing the HSC in all DHBs.

The HSC is a single, integrated and always up-to-date catalogue of uniquely identified and clearly described products and supporting information and a spend data repository, reporting and analytics. It will enable digital engagement with suppliers, better information for hospital purchasing staff, improved purchasing, and reliable and comparable data to support national-level procurement and supply chain data and insights. It is a foundation enabler of greater benefits – accurate, reliable and maintained master data for products and services is an asset for the health system.

Approved by Cabinet in 2019, the FPIM Programme is led and governed by the Ministry of Health and delivered by NZ Health Partnerships. The HSC was reconfirmed via joint approval by the Finance and Health Ministers in 2020. The programme aligns to the principles of the reforms and the new system operating model.

"The FPIM Oracle and HSC programmes are laying solid foundations to benefit patients, the health system and taxpayers in step with the Health and Disability System reforms," says Deputy Director General, Data and Digital and FPIM Oracle Senior Responsible Owner, Shayne Hunter.

FPIM Oracle mitigates operational risk, around information technology platforms, faced by 10 of the 20 DHBs, which together look after the health and wellbeing of about 80 percent of all New Zealanders.

In its foundation stage, the HSC is focused on enabling the best outcomes for New Zealand from limited funding resources, allowing contract owners to refine and implement strategies for spend management (specifically medical devices).

This is only the first step toward realising greater long-term goals such as improved inventory management, supply chain optimisation and greater system resilience during crisis, improved health outcomes through product traceability, advanced analytical capabilities, and access to a universal health sector marketplace.   

Aligned to Government's Health and Disability System reforms, the programmes seek to deliver better value and health outcomes to the people and patients of Aotearoa New Zealand.

This includes strong and stable IT systems; reduced duplication and enabling economies of scale; better value from the $4 billion of addressable spend each year on products and services and freeing up funds for frontline care; and, knowledge and insights, enabled by robust data and system-wide tools, to provide the foundations for innovation, improved system performance and patient care.

Fast facts

  • The FPIM programme started in mid-2019 to migrate 10 DHBs to the FPIM Oracle solution. To date, six DHBs have migrated and four more DHBs will have done so by end-2021.

    • Migrated: Bay of Plenty; Canterbury; West Coast; Waikato; Southern; SSEs – NZ Health Partnerships, HealthSource, HealthAlliance, Northern Region Alliance

    • Migrating: Counties Manukau; Waitemata; Auckland; Northland.

  • Work on the HSC has started, and the foundation phase is underway and is targeted for completion by July 2022. This phase will deliver early benefits including supporting more efficient procurement on a day-to-day basis, providing one place to view medical device information and easier visibility of medical device spend.

Next steps – our newsletter

We’ve recently had some feedback on our newsletter which we really appreciate. We now have more than 1,700 people subscribed to get their own copy, and we know it's also distributed further from there too.

We've got a few things underway to improve your reading experience – including changing how we send out the newsletter. Rather than use a regular email, we'll soon be using an integrated digital platform that means the format of your newsletter will be much easier to read, you can view it on a mobile device, and we should be able to use the analytics in a way that means you get more of what you want.

We also know many people want to share the newsletter further, and often that means printing a copy off to put into lunchrooms and on noticeboards. We’re going to make sure we can provide a PDF version of the newsletter too – to make this much easier.

The next edition will look a bit different too, with a new simple visual identity on display. The new design will be used on all reform-focused communications and information in the future, to make it much easier to quickly identify.

We enjoy getting your feedback on things you want to hear about. Please keep in touch with us at

Further information about the progress of the health reforms is available on the Transition Unit pages of the DPMC website.(external link)

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