Beyond Ideology: The Emerging Roles of New Zealand's Crown Health Enterprises

Abstract

New Zealand has experienced radical public sector restructuring over the last decade, including the corporatization and subsequent privatization of state trading units and the reform of social services, including health. In 1991 a new government proposed and then implemented more radical health reforms, which included the corporatization of state-owned provider units (23 crown health enterprises) and the creation of an internal market with purchasers (four regional health authorities) separated from providers. Interviews with chief executives of crown health enterprises suggest that provider units are seeking a wider role than envisaged, with an interest in the health needs of their populations and undertaking some purchasing on their behalf. The purchasers see a narrower role for crown health enterprises. Both purchasers and providers report that competition between providers is not particularly helpful (and with only limited opportunities for this to occur), with collaboration being seen as more useful. Providers are critical of purchasers' ability to adopt a strategic approach. Unlike other aspects of New Zealand's restructuring, there appears to be a retreat from some of the more radical facets of the reforms, reflecting both the resistance of the health sector and a newly uncertain political climate.