NEW-ZEALAND HEALTH PROVIDERS IN AN EMERGING MARKET

Services have almost completely replaced hospitals as the organisation al units in the reformed New Zealand health care system. Within the se condary service provider sector service management, the decentralisati on of general management to budget holding clinical groupings has been an important factor in achieving a population focus, cost containment , accountability and integration. It is being further developed within the 23 newly formed Crown health enterprises (CHEs), the main provide rs of secondary, hospital and related services. The CHEs are evolving roles beyond a narrow definition of 'providers', taking initiatives to collaborate with other providers, or rejecting those elements of comp etition that might interfere with effective local co-ordination of ser vices. Service management is also being extended to the demand-driven, fee-for-service primary care sector, where inflation-adjusted expendi ture over the last decade has grown at more than 6%, compared with zer o growth in the capitation-financed secondary sector. This is being ac hieved in both general practice and community budget-holder groupings through what might be,called managed primary health care. The current health reform process has also created four regional health authoritie s (RHAs), responsible, within capped and capitated budgets, for the fu lly integrated purchasing of services from both primary and secondary providers. The success of these innovative arrangements, which could b e of international significance, will depend upon the quality of the d eveloping relationships between providers and their purchasing RHAs.