The NZPHCS implies significant transaction and management costs, leading to the question, how justifiable are they?
It has been argued throughout this report, that if the DHB system functioned more effectively, then the separate PHO system would not be necessary. Pharmac, by comparison, has very efficient use of transaction and management costs. What this stems from, are well defined responsibilities and processes, where the Pharmac’s systems are designed in response to its requirements. Pharmac is generally very well supported by its stakeholders (excluding the pharmaceutical industry) a feature that be attributed to the presence of clearly defined roles and relationships.
If the NZPHCS was to be implemented throughout the current DHB system, it would incur a significant management cost to the Ministry of Health to ensure the DHBs were ensuring the PHOs were working effectively and that funding was not being diverted to other sectors. When the current method of management and accountability of the PHO system is considered, it is noted that the DHBs are already involved as funding flows through them to the PHOs. In addition to this they are also involved in the accountability measures, however, not as the lead agent.
What results is an ambiguous, in-between system which is designed to exclude the DHBs from having an influential role, however due to the existing structures in place, ends up putting the DHBs in position where they may as well have been the central structure for primary care provision in the first place.
What can be concluded by comparison to Pharmac, is that this complicated DHB/PHO relationship does not have clearly defined roles and responsibilities. Small adjustments to the DHB system would allow for a reduction in overall cost, as well as the ability to better utilise local information. This would mean the system is much easier to navigate and would open the possibility for primary care to be delivered via the DHBs. It would also mean that as needs change over time and policy is designed in response, it will be much more effective, as it would be able to target areas of need without requiring a complicated system orientation.