Back to the Future? Reflections on past reforms and future prospects for health services in New Zealand

In 1991 the New Zealand health system began to experience what has been termed the `turbulent decade'. Without health sector consultation or public mandate, an era of imposed market oriented reforms began. These changed the overall culture of health care delivery and the expectations of New Zealanders regarding the role of the state in the provision of welfare. In retrospect the ideologically driven imposition of the market-oriented reforms was not an exercise of bold leadership but one of political arrogance and rejection of established community values. Within the community, the neoliberal experiment heightened income and health inequalities, created a loss of social cohesion and generally provoked feelings of powerlessness. In the health sector, the reforms polarised clinical and commercial cultures and changed the geography of health care delivery. This occurred not only because place was de-emphasised, but also because decentralisation of purchasing created four health systems with widely divergent contracting arrangements and standards of care. The lessons of the health reforms have been painful, and must not be lost. A fundamental lesson is that market approaches to the delivery of health care have major limitations and that the ultimate goal of a health system should be the equitable, effective and efficient provision of care, not the profitable sale of commodities. Since 1997 there has been a retreat from the market, although it is not clear whether recent policy developments represent a new or distinctive `third way' or a pragmatic `pick and mix', combining the best from the market and the managerialism first introduced by Labour in the 1980s. Quite clearly, the experiment with the market was not sustainable. Whether this will also be true of the more recent and pragmatic `pick and mix' approach of the `third way' to health care reform is uncertain. This revised version was published online in July 2006 with corrections to the Cover Date.