‘Rearranging deckchairs’: Health system devolution criticised

Tuesday, 9 June 2026

Waikato will call more of its own shots amid a health system shake-up, but a doctors’ union warns without additional funding, it’s like rearranging deckchairs on the Titanic.

The Association of Salaried Medical Specialists said more decision-making was a great idea — in theory.

Association executive director Sarah Dalton said without “significant increases” in funding, the devolution back to a system with more local control was just deckchair-shuffling.

A health system report flagged several issues facing the Waikato region ahead of the devolution, including “significant infrastructure deficits” and shortages of beds and theatres.

Health Minister Simeon Brown said the changes, which will take place from July 1, are not a return to the District Health Board model, but will cut down on bureaucracy and give hospitals greater authority to make decisions.

As part of the changes, hospitals will be able to recruit and deploy staff without central sign-off.

The cumbersome process of requiring central permission was recently criticised by a Waikato nursing union delegate, who described “huge” recruitment delays.

However, Dalton said a hefty funding boost was what would make a real difference.

Outsourcing, low staffing, and poor access to primary care were all factors impacting hospitals, she said.

“While devolution might look OK on paper, what I fear will happen is it’s just pushing accountability back onto the local hospitals without the resourcing to actually do what’s needed to be done.”

Some managers she had heard from were incredibly anxious about the situation due to limited central funding.

“They’re not able to do the things they’re supposed to do…but now they’ll be holding the accountability for that, when they don’t really have the authority to enact the things they know need to be done.”

For example, they might need 20 psychiatrists but only have funding for 10, she said.

There could be benefits to the change — for example, it might open up opportunities for staff collaboration between different hospitals and health providers, and was a chance to think about how to best provide different levels of care throughout a region.

However, large hospitals such as Waikato Hospital were not nearly stable enough to provide the kind of tertiary support required by smaller hospitals in the region.

A Health New Zealand Te Whatu Ora (HNZ) report from February showed the self-assessments of health regions throughout the country, carried out in preparation for the devolved operating model.

Several issues were flagged for Waikato.

The area rated low on service delivery for the funded sector, as well as low on performance and planning.

“Operational capacity and capability needs to be strengthened and developed,” the report noted.

Health, safety and wellbeing also rated low, as did infrastructure.

There were some significant infrastructure deficits and challenges, both at Waikato Hospital and “all of the rural hospitals”. There were insufficient acute inpatient beds, theatre capacity, and mental health and forensic inpatient beds to meet demand.

In a statement HNZ spokesperson Mitchell Alexander said: “We are building a better health system that’s nationally planned, regionally coordinated, and locally delivered so more people get the right healthcare when they need it.”

Mitchell said Budget 2026 provided an additional $1.37 billion annually to address rising costs and growing demand across the health system. He said districts would receive their budgets and decision-making authority at the start of the new financial year, enabling more operational decisions to be made locally and based on community needs.

“We are committed to ensuring our districts are ready, able, and supported to have more autonomy. This will mean decisions about resources are informed by those closest to delivering care and focused on achieving the greatest benefit for patients.”

Announcing the step away from centralisation in March, Brown said the change would shift decision-making closer to patients, communities and hospitals, and would improve people’s access to care.

“Regions and districts will have clearer authority over workforce, resources, and service delivery, while national leadership focuses on strategy, standards, and system planning,” he said.

“Health New Zealand’s regions and districts will be responsible for delivering the health targets in their areas, with delegated budgets, the ability to deploy staff where they are needed, and the flexibility to respond faster when demand rises – helping reduce wait times and improve access to care for New Zealanders.”

HNZ was unable to provide any response to Dalton’s criticisms before the Waikato Times’ deadline yesterday.