The purchaser-provider split: implications for dental services

In July 1991, the National Government announced proposals for a radical restructuring of the New Zealand public health system, a central feature of which is the separation of the purchasing and providing roles currently performed by area health boards. While the competitive market model suggests that the split should improve the efficiency of public health services by effectively creating a market system, this paper suggests that, in practice, there are likely to be a number of obstacles. Other potential sources of efficiency are improved accountability, improved management, and integration of primary and secondary care. For dental health services, the separation of purchaser and provider should introduce greater flexibility into State-funded dental services by opening up options for alternative providers and methods of provision. Factors such as the number and structure of provider units; the contractual arrangements between these units and the RHAs, especially in respect of payment mechanisms; and the regulatory regime which covers these contractual arrangements will all affect service delivery. If real choices between types of providers and methods of provision eventually emerge, a major challenge for RHAs will be to monitor and enforce at reasonable cost any quality measures built into contracts.