Working for better health care in New Zealand

The Association of Salaried Medical Specialists (ASMS) is the professional association and union uniting doctors and dentists in New Zealand.

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Government stealthily returning to failed market approach to health

18 January 2016 ASMS - Media Release

“The Government appears to be sidling back to a market-drive approach to the provision of public hospital services,” says Ian Powell, Executive Director of the Association of Salaried Medical Specialists (ASMS).

“It’s all happening in the background and largely below the radar, which is of concern, and it really warrants active scrutiny,” he says.

“For example, when we look at the Ministry of Health executive restructure announced recently, we note that the functions of the apparently disbanded National Health Board appear to be reduced but there is an increased emphasis on market mechanisms such as tendering through commissioning, and the language of the market – clients and customers.”

Details of the Ministry of Health restructure are available at

Mr Powell says there are also signs of a return to the failed market health experiments of the 1990s in the updated draft New Zealand Health Strategy.

“The Government’s health funding review, whose controversial recommendations were leaked to the media last year, underpins the draft updated health strategy.  This strategy document clearly points to a competitive market model of health service provision and opens the doors to more involvement of multi-national health insurance companies.

“Proposals currently being considered by the Government include opening up DHB services to competitive tendering, with indications that funding will be dispensed only if planned ‘milestones’ are achieved.  If they’re not, then funding will go to another public or private provider. A leaked document from the funding review suggests that these milestones will include tighter financial targets.”

He says proposals also suggest separating DHBs’ funding and providing roles, with the funding role eventually being carved off and given to some other unidentified organisation.  This was tried and failed in the discredited market experiment of the 1990s.

“Doing that would be all about creating a structure more suitable for market mechanisms.  It’s not about providing the best care for patients and a decent clinically-led working environment for people employed in public hospitals.  It’s about awarding contracts to the lowest bidder.

“Multi-national companies can afford to make loss-leading bids to secure a contract, with the aim of making a profit over the longer term by cutting costs.  As a country we really don’t want to be going down that track, especially under the deeply flawed Trans Pacific Partnership Agreement.  The wrong move could prove very costly for New Zealand because once multi-national companies get their hooks into our public health service contracts, they may be very difficult to dislodge.”


For more information contact:

Ian Powell, ASMS Executive Director