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The Riseand Fall of a Crown Entity: a Case Study of the Public Health Commission

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The Riseand Fall of a Crown Entity: a Case Study of the Public Health Commission The Riseand Fall of a Crown Entity: A Case Study of the Public Health Commission by Todd Alan Krieble 1996 submitted for the Degree of Master of Public Policy at Victoria University of Wellington November 1996 Preface I have written this paper because it needed to be written and it needed to be written for two reasons. People working in the health system, in my view, can benefit from a much greater understanding of the nature of Crown entities, on which the current health system is built, and in particular how this influences governance and management. Secondly, those responsible for designing institutions can benefit from an increased understanding of the nature of public health and how best to organise for it. Having worked for the Department of Health prior to the 1993 reforms, with the Public Health Commission during its short life, and now back in the Ministry of Health I am convinced that there is no one right way to organise the machinery of government. There are, however, some important design principles to consider. The architectural design of the state is too important to the welfare of the citizenry to be drawn up in haste. Even the best master builder is unable to remedy serious design flaws. And as for the occupants and users - well - they have to live, work and otherwise interact with it, which sounds like a very good reason to have some input. I am indebted to my supervisor, John Martin, for his guidance. I would like to sincerely thank Gay Keating for her comments, and Jim Brumby, Warwick Brunton, Gillian Durham, Michael Hyndman and David Skegg for granting me interviews and for their comments. I would not have written this paper without the encouragement and support of Annette Dixon, Gillian Durham and David Lambie as my employers during the last three years. The views expressed in this paper are of course my own and cannot be taken to represent the views of the Public Health Commission or the Ministry of Health. Lastly, and most importantly, I would like to thank my family for their patience and understanding. TAK 1 U4t4 kAuALTYi- • Ld&.iJ ___ ¶V1 1! a Rw 1. I5c CLCW- I;hiiI 11 The Rise and Fall of a Crown Entity: A Case Study of the Public Health Commission Table of Contents Chapter Subject Page 1 Introduction 1 2 Theoretical Framework 7 3 Rationale for the Public Health Commission 29 4 Experience of the Public Health Commission, 1992-1995 39 5 Analysis and Discussion 48 6 Conclusions 61 Appendices Appendix 1 Crown Interest in Public Sector Organisations 64 Appendix 2 The Public Health Policy Community 65 Appendix 3 Public Health Organisation, 1992-1996 66 Appendix 4 Public Health Commission 70 Establishment and Board Membership References 71 N Chapter 1 Introduction Purpose of the Research The purpose of this research is to examine the case for and against the Crown entity form of institutional option for the provision of: • public health intelligence (analysis and monitoring of the state of the nations -} health); • public health policy advice; and • purchasing of public health services. • This paper is concerned with the public health function within the machinery of government. Public health in this context is defined as the health of the population and is discussed more fully at the beginning of Chapter 3. A Crown entity can loosely be described as a public organisation which is not a government department under direct ministerial control but which is subject to accountability requirements under the Public Finance Act, 1989 and is listed in Schedule Six of the that Act. Crown entities are discussed further in Chapter 2. The particular case of the Public Health Commission (PHC), established in July 1993 and effectively disestablished in July 1995, will be examined. The key research question to be addressed is: was the PHC the optimal model for discharge of its functions? The research results expected will add support either for or against the Crown entity form for the public health functions. This research will draw on institutional design theory and interest group theory for an analytical framework. The literature on the experience of Crown entities is relatively small. It is hoped that this review of the case of the PHC will add to the knowledge base for thinking more generally about Crown entities in New Zealand. The prehistory of Crown entities Crown entities, as defined in terms of the Public Finance Act, 1989 are in direct line of descent from the category of institutions often referred to in the international literature broadly and perhaps imprecisely as quasi-autonomous non-governmental 1 I organisations or quangos. Two seminal pieces of work are of note.. The Carnegie Corporation sponsored Anglo-American Accountability Project of 1967-73 was made I up of a series of empirical studies which examined the tensions between independence and accountability in the organisation of some state functions. One I of the results of this project was a clearer classification of the types of organisations in the private-public continuum. Hood and Mackenzie (1975). classified these I organisations as being government, quasi-government, quasi-non-government and non-government. This classification gave rise to the term quango which was used to I refer to all types of non-departmental governmental bodies and remained in popular use through the 1980s. The second seminal project originates from the United Kingdom in a 1980 report by Sir Leo Pliatzky a former senior Treasury official. Pliatzky produced a report for the I then Prime Minister (Mrs Thatcher) on 489 non-departmental government bodies to which the Government of the United Kingdom entrusted £5,800m in 1978/79, 1561 advisory bodies spending £15m, and 67 tribunals spending £30m (Pliatzky, 1980). The Pliatzky rport examined whether the Government was getting value for money I and accountability from quangos. The answer was neither in Pliatzkys view. Similar attention to the proliferation in New Zealand of quangos was expressed in I New Zealand, most notably by Sir Geoffrey Palmer in Unbridled Power? (1987) who held similar views to Pliatzky, Institutional Design Theory I The institutional design theory relevant to this research relates to the literature on I quasi-autonomous non governmental agencies and machinery of government (Barker, 1982; Hood and Jackson 1991; Pollitt, 1984). There is an emerging New Zealand literature on what could be described as Crown entity theory (Boston, 1995 et al; Brumby and Ayto, 1995; Martin, 1994). 1 Interest Group Theory 1 Interest group theory relates to the very nature of a pluralistic society in which I differing values and interests affect the state, and how political institutions respond to pressures and influences from pressure groups. In this paper particular attention will I be given to the concepts of the policy community and the attentive public with which I I 2 the PHC interacted (Blank, 1994; Pross, 1986). The degree of distance from ministerial control has strengths and weaknesses with regard to the influence of interest groups in the functions being carried out by a Crown entity (Martin, 1994). This paper will rehearse the various arguments for and against establishing a decoupled Crown entity such as the PHC (Roberts, 1987). There is also a clear connection between quangos and the role of professionals in policy making which will be examined (Deeks, 1992; Dunleavy, 1982). The PHC may have been a corporatist anomaly in an increasingly laissez faire or pluralist system of interest groups (Mulgan, 1994). A significant body of recent opinion in New Zealand suggests that the balance of influence is in the hands of economically powerful interest groups at the expense of the public and consumer (Kelsey, 1995; Mulgan, 1994). A number of commentators have offered views on the effects of interest groups on the public health and most recently on the PHC (Beaglehole, 1995; Chapman, 1994; Lancet, 1995). The PHC clearly altered the pre- 1993 status quo of interest group representation on matters directly and indirectly related to public health. At the same time interest group influence was claimed to be a factor in the demise of the PHC (Coney, 1994; Pezaro, 1995). Methodology The methodology adopted will inform the evaluation of the arguments for and against the Crown entity form for discharge of the PHCs statutory functions. Data Collection The collection of data for examining the particular case of the PHC will be primarily through examination of documentation (published and from official records) on the establishment and disestablishment of the PHC. Interviews with individuals in key positions of knowledge and influence will be used to supplement and corroborate the available literature. Institutional design and interest group data will be collected from: Government documents on the health reforms, i Ministerial press releases, 1 New Zealand Parliamentary Debates (Hansard), I 3 • Social Services Select Committee submissions and reports, • Annual Statements of Performancç of the PHC tabled in Parliament, • media reports, • published articles, • officially released papers (both published documents and those released under the Official Information Act, 1982) from the PHC, Ministers, Government Ministries and interest groups, • interviews as required. Analysis This data will then be analysed and discussed in light of the framework provided by the institutional design theory and interest group theory. Hood and Jackson (1991), HM Treasury (1985), State Services Commission (1995), and Wilding (1982) identify reasons why
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