In a "major reform" of the health sector, all 20 District Health Boards are to be replaced over three years by one national authority called Health NZ.
The new Crown entity will have four regional divisions. It will be responsible for running hospitals and commissioning primary and community health services.
A new Māori Health Authority will be set up with the power to commission health services, monitor the state of Māori health and develop new policy.
A new Public Health Agency will also be established in response to COVID-19, so New Zealand is better prepared to respond to future pandemics.
The system will be overseen by a "strengthened" Ministry of Health, which will advise the Government on policy matters. The current system of 20 DHBs can be difficult for the Ministry of Health to monitor and assess performance.
The Ministry of Health will monitor and report on the outcomes achieved by the new system as a whole. Health NZ and the Māori Health Authority will design, commission and deliver health services.
When things aren't working well, such as care outcomes not being achieved, it's hoped Health NZ will be able to quickly identify problems through its regional offices. If problems persist, the Ministry of Health will identify the issues through its simplified monitoring.
An interim Health NZ organisation will be set up in late 2021, before legislation is passed to establish the formal organisation.
The first 18 months will be for preparation and transition. It's expected legislation will be passed around mid-2022. The second phase from late 2022 will be the expansion and development over two-to-three years.
The transition will be planned, staged, and managed to minimise disruption to services. DHB employees will transfer to Health NZ with existing terms and conditions. The formal date to transfer to the new structure is likely to be July 2022.
The huge shake-up of the sector is in response to the Health and Disability System Review, led by Helen Clark's former chief of staff Heather Simpson, which found the public health system was under stress, not equitable for Kiwis, and bogged down by "racism".
The review recommended reducing the 20 DHBs down to no more than 10, but the Government's plan is much bolder. It also recommended abolishing elections for DHBs, but with DHBs set to be axed, it's no longer a concern.
"The reforms will mean that for the first time, we will have a truly national health system, and the kind of treatment people get will no longer be determined by where they live," said Health Minister Andrew Little.
"The reforms will also ensure the system is able to cope with the effects of an ageing population and respond more quickly to public health crises like the COVID-19 pandemic."
