Monday, March 11, 2013

Something New

We feature each week Nicholas Reid's reviews and comments on new and recent books

“DEMOCRATIC GOVERNANCE AND HEALTH” by Miriam J.Laugesen and Robin Gould (Otago University Press, $NZ40)

            A very obvious thing has to be said at the start. Democratic Governance and Health is not a book for the non-specialist reader. Subtitled Hospitals, Politics and Health Policy in New Zealand, it is very much an academic study, written with all the conventions that that implies – copious references to sources, a technical vocabulary, tables, statistics and a tightly-focused exposition. But there are times when even the non-specialist reader (i.e. me) has to read books like this in order to be better informed about the way the country and its essential services are run. It took much concentration and commitment to read through this book, but it was rewarding.

Miriam Laugesen is Assistant Professor of Public Health at Columbia University in the USA.  Robin Gauld is Professor of Health Policy at University of Otago. Jointly researched and written by them, Democratic Governance and Health is their examination of how our hospital boards run, why they have developed the way they have, and whether they are indeed the best possible option for health governance. Particularly under their microscope is the elected nature of our hospital boards for, as Laugesen and Gauld often note, New Zealand is almost unique in having elected hospital boards. Also, health in New Zealand continues to be approximately 80% publicly funded – higher than in comparable countries, where the private health sector looms larger. Public funding of health is intertwined in the public mind with democratic representation on health boards. Hence elected boards.

Of necessity, this book is as much the detailed history of hospital boards as it is an analysis of them.

As the authors note in their introductory chapter, New Zealand’s elected health boards have endured many changes in general health governance. They were first set up in the demographically very different New Zealand of 1885, when the population was overwhelmingly rural. Their powers were only slightly modified over the years up to the 1950s, as central government limited hospital boards’ abilities to purchase land or open more hospitals. But by the 1950s and 1960s, it was clear that the system needed a major overall. At that time, only 30% of New Zealand’s population lived in the South Island, yet 60% of hospital boards were in the South Island. This meant too many hospital boards serving sparsely populated areas and, conversely, more hospital beds being available to rural patients than to urban patients. So there was some rationalisation in terms of the merging or termination of some rural boards.

Even so, attempts to remove elected boards in the 1990s were quickly reversed with the creation of DHBs (District Health Boards). Laugesen and Gauld remark:

Hospital boards represented an ethos of democratic representation and were closely associated with local hospitals within each community. Ideas and core political values played a role in the longevity of the hospital boards and their seeming monopoly in hospital policy…..Hospital boards endured because they embodied core values of democracy and care of the sick. The role of hospital boards in fulfilling representational functions and caring for the sick helped hospital boards gain legitimacy on voters’ minds.” (Pg.19)

            Yet, their introduction, asks - given the range of other options (e.g. appointed boards as in most of world; clinical governance etc.) is there really value to elected boards other than a symbolic value?

Their second chapter looks at the degree to which local or municipal hospital boards in other countries (whether or not they are elected) are able to counter central government health policies. It notes that there is a strong tradition of local independence, even in countries with appointed boards.

Thereafter, Democratic Governance and Health launches into five chapters chronicling the impact of government policy on hospital boards in the 20th and early 21st centuries. There was (Chapter Three) the big impact of the Social Security Act of 1938. Though there had been some discussion of the need for regionalisation of hospital boards, there was no reorganisation of boards in the act; but there was a major shift of funding from local ratepayers to general income tax administered by central government. This meant that by the 1950s, central government and taxation were funding nearly two-thirds of all health costs and there was a perceived blowout. Taking office in the 1950s after years of Labour government, the National government made much of this perception and amalgamated some smaller hospital boards, but undertook nothing like wholesale regionalisation. The 1957 Hospital Act did not essentially change the system. It merely gave central government some enhanced power of  “restraint” over boards.

By the 1960s (Chapter Four) there was the ridiculous disparity between the number of beds available per 1000 people in Auckland (3.6) and in Dannevirke (9.3), this being partly the result of a multiplicity of local hospital boards. Therefore, governments inched cautiously towards regionalisation. However, the Labour government’s White Paper on health in the early 1970s was not popular in this attempted reform and the incoming National government went more even more cautiously.

By the 1980s (Chapter Five) Rogernomics and monetarism were riding high and “the apparent success of economic liberalisation … made the government ambitious to apply the same theoretical framework to policy design in all areas of policy, even those that seemed to have long-standing problems and served quite different purposes, such as the hospital sector.” (pg.82)

It was under Labour in the late 1980s that a Taskforce on Health (generally known as the Gibbs Taskforce) was set up and produced a report. This commission was originally dominated by libertarians and monetarists, who wanted to shift the focus in health care onto prevention rather than cure, and onto a “user-pays” policy. In other words, they were interested in less public funding of health and an increased private health sector. But this proposal was unsaleable and there were divisions in the Labour government’s reaction to it. Ironically, the report ended up accepting existing board structure but making boards more accountable to government in the way they used funding. The outcome was an increased, rather than a diminished, role for central government in health care – the diametric opposite of what the report’s supporters had originally intended.

It is wryly amusing at this point of Laugesen and Gauld’s account to be told that their archival research revealed Treasury advising government to publicise the most extreme proposals of the original version of the report, in order to make such changes as were made seem more reasonable. Thus is the public often persuaded to accept the indefensible.

Then in the early 1990s (Chapter Six) came a National government’s attempt to change the system under urgency in parliament, by removing elected officials from Area Health Boards. But there was a strong negative reaction to what the government attempted to sell. Say the authors: “the overall public perception was that government was intent on shrinking the welfare state and privatising the health care system. This perception was helped by well-organised public hospital staff who emphasised the threat of privatisation in their communication with the press.” (pg.107)

So (Chapter Seven) by the mid-1990s, the National-New Zealand First coalition adopted the strategy of moving more cautiously. A short-lived Health Funding Authority was set up and there were some curbs on privatisation through the influence of the populist New Zealand First. But by the end of the 1990s, a new Labour government came in and the direction of policy changed again.

Are the authors getting exasperated by the time they chronicle this?

They note that under Labour “The new legislation stringently codified the expectations of public oversight and participation, particularly consultation requirements, and this gave the governance of local health services back to local communities, where it had been prior to the 1990s.” (Pg.137). But almost immediately follows the tart statement that “The Labour-Alliance reform package set in train yet another involved and costly process of change, with wide-ranging questions over whether the extent of change was justifiable.” (Pg.138)

So at last we reach (Chapter 8) the establishment and performance of District Health Boards (DHBs). To the authors’ apparent satisfaction this system, set up by a Labour government, has remained in place and is “the only example in the world of a publicly funded national health care system governed for an extended period by locally elected boards.” (Pg.139) The Health Funding Authority was gone and funding was now split between central government and DHBs.  Given the power of DHBs, the authors produce a demographic analysis of how people have voted for boards and how people are represented on them. But a key question is finally posed on Pg.149 - “How well have the DHBs performed?”

Laugesen and Gauld argue that voter participation in board elections is weak. Also “it is not clear that the boards have been able to provide the all-important capacity expected of a governing board to drive innovation, monitor and question the performance of providers, and act as a sounding board for the chief executive and other full-time employees, because boards lack the expertise needed in several key areas.” (Pg.150) One area they often lack expertise is in Information Technology, and this deficiency may have contributed to the notorious case of the Otago board being extensively defrauded by one of its members.

Coming to the present time, the authors consider the influence of economic recession and cost-cutting on DHBs. After a National government was elected in 2008, it pledged to continue with DHBs and not to restructure the health sector. But it did create a National Health Board in 2009 to oversee DHBs and also was “reducing local decision-making capacity through centralising various administrative functions.” (Pg.160)

 Laugesen and Gauld entitle the conclusion to this political and social history “Realism and Representation”. They do not weight their argument unnecessarily, but they do note that the very legitimacy of DHBs is questionable, given the low voter turnout that elects them. Given this lack of practical interest in their election, how truly representative can they be said to be? They also note the low competence of some boards in certain key areas. But they conclude tactfully that the whole issue of elected hospital boards requires more discussion and debate.

            In the early pages of this book, the authors set out some generalizations about hospital boards that the rest of the text verifies. These are:
* That local support for hospital boards makes it politically difficult for governments to reconfigure them
* That sometimes they have channelled party political goals that not always in the best interests of patients
* That they have been assigned a symbolic value by those who see them as part of resistance to marketization of New Zealand
* That they probably fail to provide the skill set necessary for effective health care planning and financial arrangement
* And that they don’t gain much attention at election time, while still being able to rally support when threatened.
            As a non-specialist, I think they make their case.  But this is not the same as saying that they make the case for an alternative system.


    Hi Nicholas, in your review (para 20) you refer to the Otago board being defrauded by one of its “members”. As Laugesen and Gauld state in their book (p 151), it was the chief information officer at the time who committed the fraud, not a Board Member.

    Jeanette Kloosterman
    Board Secretary

    1. I apologize for this inaccuracy. Thank you for this correction and I am pleased to see you have posted it on the blog.

  2. Thank you very much for adding this comment. I regret that reviewers such as I do sometimes commit these minor factual errors.