Auditor-General's overview

The performance of district health boards is important for our health, and our health is vital to the economic well-being of New Zealand. The health sector is one of the largest areas of central government spending on public services.

The health sector is doing better at managing within its means, and has reduced its overall deficit. Further pressures, though, are expected – especially as a result of the Canterbury earthquakes.

Last year, I included my reporting on health with my reporting about the annual audits in central government. This year, I have decided to publish separate reports on the health and education sectors, as well as two volumes on the wider central government sector.

In all four reports, I note the ongoing importance for public entities of continuing to improve their performance reporting. Improvements in information about performance enable an entity to focus on initiatives that will improve the outcomes it seeks, and are relevant to all health providers and public entities. I am particularly pleased at the improvement in service performance reporting by district health boards – but they still need to improve their reporting on efforts to reduce disparities for Māori.

I am also aware that the health sector faces particular challenges because its performance reporting is entity-by-entity in a sector that is increasingly operating collaboratively, between districts, regionally, and nationally. Accountability arrangements need to keep pace with the regionalisation of planning and services.

In my view, there is still room to reduce the compliance burden for hard-pressed service providers in the health sector. I continue to encourage district health boards to explore procurement arrangements that provide for good accountability but have simplified reporting requirements.

The health sector is now focused on service efficiencies. There could be savings made through better recovery of the costs of providing health services to patients ineligible for free health services. It is an aspect of DHBs' efficiency that Health Benefits Limited is working with DHBs to improve. I will watch the progress that Health Benefits Limited makes with this.

We have reviewed DHBs' asset management planning, and concluded that the health sector needs to improve. I am currently considering asset management planning as one of the aspects that our audits will focus on during the next 12-18 months.

I have some concerns about district health boards' reporting of progress in reducing health disparities for Māori. I am also considering whether child health – and, in particular, disparities in the health status of Māori children – will be part of our work for the next 18 months on our theme, Our future needs – is the public sector ready?

Lyn Provost
Controller and Auditor-General

1 March 2012