Organisational Design


Many of the organisations that provide services to the public  are normally democratic in nature. Bill quoted by Powell noted that such systems can not work well without attaining the basic consensus among most citizens. Such institutions must also seek the acceptability of their state and the social systems. Various organisations have therefore, through various bargains reached various compromise settlements. These process is facilitated by the need for prosperity in the context of all the stake holders.

The influence of the external environment on such organisation as providing laboratory, pharmaceuticals and the primary care services  is unavoidable. Such influences ranges form majorly affect the organisational design specifically their structure, personnel and the services that they offer. A part from the sound parameters set by the external factors, Ian Powell noted that internal morality and a generative culture is also a basic necessity for the realisation of quality health care. External factors that influence the design of an organisation are numerous. They include; funding constraints, Change in the government systems, labour alliances, and other factors.

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These services can be primary care which are in most cases provided free to the patients. Examples of such services are the community pathology and some community radiology. While general practice consultations are subsidised for children under the age of five. Other factors that affect health care service provision include the cultural barrier driven by ethnicity, language barrier and disability. These factors lowers the ability of certain individuals to use certain cervices.


Like in other developed countries, major restructuring of organisations have occurred in the New Zealand’s Health care organisations. Such restructuring have been caused/ necessitated by a number of factors.

Reports and Reviews:

From the year 1975, there are various reports and reviews that influenced the design of New Zealand’s Health or Organisations. The perceived failure of one paper consequently led to the research and publication of the subsequent one. In the year 1975 was the White Paper titled a health service for New Zealand written by McGuigan. It recommended integration services, preventive medicine, and provision of health care to all. the paper led to the replacement of the Department of Health with the Health Authority. Health Authority was to provide planning strategies and set national priorities and targets. It brought accountability by recommending the evaluation and monitoring of the health service performance. Regional health authorities were formed whose functions replaced that of the hospital boards.

However, the paper was criticized by the medical professionals, hospital boards, private hospitals and the voluntary sector. The stakeholders believed that the Department of Health was seeking to dominate the process of policy making to increase their control. They described the paper as a tool for the health workers rather than the public. According to them, it failed to address the issues of fragmentation, mal-distribution of general practitioners and access to services. However, it is believed that the paper contributed to major structural change. It led to the demise of the Local Government.

The consultative approach:

This approach was used during the Area Health Board Era as a corrective measure to the perceived weaknesses of by the labour Governments’. This approach by the government ensured a grater opportunity for the medical sector in the policy formulation.

The next report was by the Special Advisory Committee on health sector. The paper emphasized the need for consultations. It led to the Establishment of the Service Delivery Groups (SDGs) which combined all the stakeholders. Other proposed bodies were the Fourteen Area Health Boards (AHBs), Amalgamating hospital boards and the Department of Health’s district offices.

It also proposed a transparent, open and inclusive approach to policy development and organisational change. The report also harmonised the work of a vibrant public, private and the voluntary sectors. They worked together in the planning of the appropriate services in line with the needs of the community. Thirdly, it recommended decentralisation and integration where the needs of the population are to be set at the local level. It strengthened the focus on the consumer.

With the re-election of the labour Government in 1984, the ministers were reluctant to accept the continuation of the consultative and incremental approach to the decision making. The new political environment could hardly ensure efficiency, equity and accountability. These led to a major structural, organisational and management change.

The market was then liberalized, state entities privatised and a major cutting on various government programmes. The focus of the government changed to more of accountability and performance outcomes.

The Health benefit Review of the 1986: the team researched and report on the state role in the delivery of health care and recommend the way forward for reform. It addressed the continuing costs of health care, deteriorating health standard of the population, and the on going strengthening of the power bases in different professional groups, rising consumer expectations and little research for future planning.

The report utilized equity and efficiency concepts in their analysis on how the roles and performance of funders and providers could be enhanced. It addressed unequal distribution of primary health services and their in accessibility. The report recommended that the state would be the major funders. A mix of state-provided services and contracting was seen as preferable to allow for a healthy competition.

The changes that occurred in the 1990s were majorly caused by Government transition. The transition were from the conservative government by the Labour-Progressive governments. Powell noted that prior to this transition the market forces were the major drivers of the New Zealand’s health system.  With the new government, the New Zealand Public Health and Disability (NZPHD) Act of the year 2000 signed. This led to a total transformation in the design of the health organisations in New Zealand. The most significance transformation was the establishments of the District health Board.

The Board was mandated to provide for the public funding and provision of personal and public health, and various disability services.  The Board was also to establish policy owned organisations responsible for these provisions. The board was also to streamline the objectives to ensure that they are achievable within the available funds. The board was also to work hard to promote the integration of all health services, especially the secondary and the primary care. The NZPHD provided a new external morality replacing that of the previous legislation. It also new parameters to guide the work of all health professionals.

Funding constraints: it is challenging to meet the quality required in the health care in situations of funding constraints. Powell noted this is a challenge that market experiments failed to solve. This necessitated another strategy which was the prioritisation strategy. The strategy was a recommendation by the National Health Committee. An advisory committee to the Minister. They analysed the reasons for the failure of the earlier proposed surgical booking system that was based on fiscal thresholds and the subjective clinical criteria.

They observed that the strategic was unrealistic and could not achieve its main aim. It was to provide a cure to all through eliminating the length of time the patients have to wait before being served. They thus recommended an explicit and transparent prioritisation as a solution. This measure was to ensure equity, effectiveness, efficiency and acceptability.

The strategy achieve greater openness. However, it was criticized of low quality of care and fiscal in effectiveness. The critics also noted that the strategy was not properly implemented. It had subjected and variable points system and made it difficult for people to access essential services.

Reports of the series of papers to the New Zealand Orthopaedic  Association’s Annual Scientific Meeting of 2003. Criticised prioritisation such as high level of internal inequality, low quality and social problems, high level of patient dissatisfaction and negative effect on the work of the general practitioners.

As a measure to improvement New Zealand shifted their strategy to that of quality improvement. This strategy improved the level of the engagement of both the health professionals and the public at all the stages of its services. However, the strategy was criticized for not being able to bridge the critical gap between micro and macro issues and performance.

External morality:

Lan noted that the wider society’s ethos and the parameters that guides the operation of the internal morality of the medical practitioners are reflected in the external morality. They are in the policies such as the single-payer funding and the high level of public provision. The strategy, has helped in the avoidance of unnecessary fragmentations and promoted a more effective integration. The external morality also provided for the position of the Health and Disability Commissioner. The office is responsible for the operation of statute-derived Code of Patients Rights.

Laws and policy formulations:  Ian noted in his work that the District Health Board objectives and functions concur with the provision of a universal public good. The provision stressed on the need proactively confront various heath needs rather than waiting to react. The s23(1)(g) of the NZPHDA require DHBs to  carry out regular investigation, assessment and monitoring of the resident’s health status. Such assessment must also investigate the service need of specific populations.

Just like the other strategies, different views have emerged over the effectiveness and value of the elected members of the Board. Some Scholars have also criticized the size of the Board and even proposed that some should be merged.

At the policy level, the Government in conjunction with DHBs, and the Council of Trade Unions initiated a tripartite forum process. This step was favourable to New Zealand given its large number of Unions by health professionals. This strategy is therefore seen to the best way if improving contribution to development and implementation of effective national policies.

New Zealand has therefore successfully confronted some of the challenges in its health sector by developing an external morality. However, the system has failed to attain the capacity to shift to a medium-to-longer term approach.

Other challenges the led to restructuring and the change in function and the responsible work force.

The internal Structure of DHBs

The governing boards are composed of both the elected and the appointed members. All the members re directly responsible to the minister of health. It is observed that the difficult financial situations pose a challenge to Board. This is because of the conflict of responsibility to the minister and that to their electorate. It is therefore vital for boards to have as much community support. This calls for much engagement with the community. They must be involved in constant consultation with the with the community during strategic planning processes.

Their meetings are open to the public and may only be closed under the conditions provided for in the NZPHD. The open meetings allows for high participation by the public. The media reporting of the board and advisory committee has increased the public awareness. The new challenge is how to ensure that the public understand. Many DHBs use newsletters, websites and community meetings to ensure proper passage of the information on the health issues to the community. Otago DHB has even gone further to establish board consultative subcommittees on different health issues affecting the public. These sub-committees are chaired by the board members and have representatives from all the stakeholders.

Adam has also noted that the size of the DHBs and other circumstances such as inter-district patient flows is often solved through amalgamation of a number of DHBs. This enables them to improve on the quality of the services that they offer to the public. However, the process of amalgamation must be approved by the minister of health. In such and arrangement, it is possible that one management structure could be the sole provider of a given service within the district.

Working together Nationality and rationality

Every heath service provides operates under the legislation and policy guidelines of its government. The DHBs must therefore get the direction from the government in developing their annual strategic. Examples of such policy frameworks in New Zealand include; the legislated objectives in section 22of the NZPHD Act of 2000 and the New Zealand Health Strategy. In some cases the ministry also uses sub contracting rather than devolved responsibility to the DHBs. This is a conflict of interest by the government.

Case study: New Zealand Laboratories

The community pathology services are free and are provided by a well established laboratories. Some of such laboratories have underwent amalgamation to improve on the efficiency of their services. Many of the private pathology services are today provided by  well established international laboratories guided by the national association of laboratories.

DHBs could not be effective because just like the individual laboratory, they were awarded community pathology contracts. The services they offered were strictly limited to the amount of the funds obtained. Such funds always came with a clear direction on how it is to be used. DHBs laboratories were also of low capacity and had no control over the prize charged for every test. It can also not levy part charges on the laboratory service providers. DHBs have no mechanism to control the number of tests but may only be influenced by education or sharing of the cost with referring practitioners.

The private pathology laboratories cross DHB boundaries. The services offered by these laboratories especially for sample collection and in reporting can not easily be replicated. DHBs therefore have limited options for negotiating with the laboratories. They can only negotiate prices in cases where there is a sole provider of the service. Adam noted that, this option also depends on the number of the pathology laboratories in the local market. Even though sole-provider contracts might offer short opportunities, it posed a long term risk in the difficulty of changing service providers. Adam noted that the existence of the private laboratory services and the circumstances of the devolved contracts may encourage the imposition of a national approach to pathology purchasing.

The number of employees and their qualifications are determined by other external bodies. Work force professional registration councils define who may practice laboratory services. Other professional bodies such as different specialist collages plays a major role in both the employees life and that of the contracted service providers. It imposes requirements on both the members and the DHBs. The professional associations advise registration councils on the specialist registrations qualifications of an individual and the time and resources required the training of such an individual.


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