On a hiding to nothing? assessing the corporate governance of hospital and health services in New Zealand 1993–1998

Abstract

In New Zealand the governance of public sector hospital and health services has changed significantly over the past decade. For most of the century hospitals had been funded by central government grants but run by locally elected boards. In 1989 a reforming Labour government restructured health services along managerialist lines, including changing governance structures so that some area health board members were government appointments, with the balance elected by the community. More market oriented reform under a new National government abolished this arrangement and introduced (1993) a corporate approach to the management of hospitals and related services. The hospitals were established as limited liability companies under the Companies Act. This was an explicitly corporate model and, although there was some modification of arrangements following the election of a more politically moderate centre-right coalition government in 1996, the corporate model was largely retained. Although significant changes occurred again after the election of a Labour government in 1999, the corporate governance experience in New Zealand health services is one from which lessons can, nevertheless, be learnt. This paper examines aspects of the performance and process of corporate governance arrangements for public sector health services in New Zealand, 1993-1998.