From fragmentation to integration: Lessons for the NHS from New Zealand

On 14th August, Public Policy Projects (PPP) held a dinner for a group of carefully selected stakeholders to share lessons from international and devolved nations on the delivery of integrated care. Speaking to the assembled guests was David Meates, who, while current interim CEO of Rowing NZ, was CEO of New Zealand’s Canterbury District Health Board (DHB) from 2009-2020. During his tenure, Canterbury DHB undertook an ambitious series of reforms aimed at integrating the fragmented elements of the health service, which turned the ailing system into one of the most integrated health systems anywhere in the world.

Many of the issues Canterbury faced have parallels within the NHS, and as such, it provides valuable lessons for UK health and care transformation. Prior to Meates’ arrival, Christchurch Hospital (the district’s largest) was regularly ‘gridlocked’ due to a shortage of beds, while a fragmented system and growing demand for services were damaging staff morale and the system’s ability to deliver effective healthcare.

Meates took charge of Canterbury DHB in 2009, and noted that by 2007, leaders had already realised the system was unsustainable and needed change. He described it as “broken and fragmented”, siloed by profession, dominated by providers and lacking clear purpose. Exponential increases in funding over preceding years had led to little-to-no improvement in service delivery, productivity or patient outcomes.

Without reform, the system would have required another 600-bed hospital, a 23 per cent increase in GP practices, 2,000 more aged care beds, and 9,000 additional healthcare professionals (HCPs), simply to meet demand. Meates remarked that even with the necessary funds, the workforce to do this was simply not available. What was needed, Meates determined, was a new blueprint for delivering healthcare to Canterbury’s more than half a million residents, as well as a burning platform that would inspire substantial change.

First steps: identifying the vision

Much of Canterbury DHB’s early work – under the umbrella of Project 2020 – focused on understanding the shared challenges that affect large and complex systems in other sectors, and how these insights could be applied to a healthcare environment. One key initiative was Xceler8, an eight-week experiential leadership development programme that involved 1,500 doctors, nurses, and allied healthcare professionals from across the Canterbury system. Participants, convened in cross-disciplinary groups, spent time with leaders in other sectors to understand their challenges. At the end of the programme, these groups presented ideas for system improvements to a chief executive, with some being subsequently implemented. Beyond the positive changes this brought about, the programme also helped to embed principles of system thinking among the workforce and demonstrated that each part of the system has a role to play in broader system improvement.

Other programmes included Particip8 (a six-week night-school course focusing on change management techniques), and Collabor8 (a short course focusing on skills management).

These programmes also sought to familiarise staff members with Lean and Six Sigma methodologies – prioritising customer value and continuous improvement – as well as chaos theory – the idea that beneath the apparent randomness of complex systems, there are underlying patterns and constant feedback loops that can be quantified, measured and understood.

Through these initiatives, system leaders began identifying commonalities and principles that extended beyond traditional approaches to healthcare system transformation, such as the concept of ‘value.’ While ‘value’ in other sectors might refer to profit or market capitalisation, it was determined that in a healthcare context, creating ‘value’ could be understood as not wasting patients’, and by extension, the system’s, time. This realisation led to the establishment of three strategic goals, forming a framework for “a connected system, centred around people, that aimed not to waste their time”.

1. People take greater responsibility for their own health
   Prioritising the development of services that support people and families to stay well and take increased responsibility for their own health and wellbeing.
2. People stay well in their own homes and communities
   Prioritising the development of primary care and community services to support people and families in community-based settings, close to home, and to provide a point of ongoing contact and continuity – for most, this is in general practice.
3. People receive timely and appropriate care
   Enabling the freeing-up of hospital-based specialist resources which can be responsive to episodic events and the provision of complex care and specialist advice to primary care.

These initiatives also led to a realisation that regardless of how fragmented a system may seem, all components form part of the same ecosystem. Shuffling patients around to meet ‘activity’ targets benefits the system little, whereas prioritising the patient’s best interests—minimising their time spent while achieving the best possible outcomes—benefits both the patients and the entire system. This insight gave rise to the principle of “One system: One budget”, which became the foundation for all subsequent reforms within Canterbury DHB.

One system: One budget

These guiding principles informed the first series of practical changes that Canterbury DHB implemented to better integrate the system and create better value both for patients and the wider system.

A crucial development was the creation of the community-based HealthPathways, aimed at improving the interface between secondary and primary care. This programme was initiated by clinicians who, after reviewing a backlog of referrals, identified that many common issues could have been prevented through better communication between hospitals and primary care providers. General practitioners and hospital specialists were then brought together to agree on optimal management and referral pathways for specific conditions. These pathways were subsequently presented to larger groups of hospital doctors, GPs, nurses, and HCPs for their input. Meates reflected on the traction that HealthPathways was gaining as an approach in the Northern hemisphere, with systems in England and Wales adopting the methodology as the operating system for their integrated systems.

A key lesson from Project 2020, as Meates has argued, is that “too often, we confuse activity with progress,” a criticism frequently directed at the NHS’s Payment by Results tariff system. To better align incentives across the Canterbury system, this approach was abandoned in favour of the newly established Canterbury Health System Outcomes Framework. This change supported the principle of “One System: One Budget,” ensuring that the various components of the system would now be rewarded for achieving the best outcomes for the system or the patient, rather than merely moving patients around and being compensated for this ‘activity.’

Another change was the establishment of the Canterbury Clinical Network – a collaborative of HCPs, health system users and cross-sector partners using a principles-based framework to decide how, when and where health services are provided. These principles included taking a whole systems approach to ensure the integration and sustainability of services, ensuring that people and communities were at the centre of any changes, enabling clinically led service development, and the system operating within its financial means. Crucially, while commissioners were involved, their role was to support the process and then work out how to realise the objectives, not to prescribe the objectives themselves.

An important step towards service integration was also made by the establishment of a connected data platform – HealthOne – an electronic shared care record combining GP, hospital and community pharmacy records, along with laboratory and imaging results. Since this was not replacing existing systems, but drawing on them, its implementation was relatively non-disruptive and enabled the scope of the records to be increased over time. Citizens could opt out of all or part of the system, with the process led by the system’s Consumer Council, while regular “dynamic” automated privacy audits ensured that patient privacy was always prioritised.

Reflections

In reflecting on Canterbury DHB’s transformation journey, Meates was wary of simplistic quick fixes to complex, systemic problems, and the importance of taking a holistic and long-term approach with any proposed solutions. “You need a whole system to work for the whole system to work – focusing on part of the system will not effect the change required,” he told the assembled guests. Considering this, during its transformation Canterbury DHB paid special attention to the language it used to refer to the system and its workforce, emphasising the use of “we” in official communications, and deliberately halting the use of language which went counter to the narrative of a single system.

The principles of integration and collaboration must also be reflected in the redesign of services and pathways by actively involving relevant stakeholders and ensuring their voices are heard. Meates emphasised that “change happens at the speed of trust,” which requires meaningful engagement with frontline teams, as well as input from the clinicians who will deliver the services and the communities who will use them.

Meates also cautioned that in any large-scale system transformation, facilitating cultural change among the people involved is as crucial as any change in process or structure. With the introduction of integrated care systems and their emphasis on collaboration over competition (a significant departure from the previous way of commissioning services), this is a point the NHS could do well to acknowledge. “You can’t expect the same people that have worked in a competitive environment and who have seen their success tied to the success of their organisation to suddenly collaborate,” said Meates. This is a case of both instilling that necessary cultural change, but also of facilitating systems to be collaborative, such as by realigning incentives towards system outcomes as opposed to individual organisational sustainability.

The cultural dimension is also highly relevant to funding issues, as “too often, these involve win/lose discussions” where different parts of a system manage their activity levels to safeguard their budgets and maintain status within the broader system. While outcomes-based remuneration is undoubtedly a key solution, it is equally important to embrace the idea that the best outcome for patients is also the best outcome for the system and its individual components.

On a practical level, Meates emphasised that although reforming contracts can be the most challenging area, it is perhaps the most critical. Contracts significantly limit what healthcare providers can do and how they operate, making them essential enablers of any strategic change. “While the goal is integration,” Meates argued, this is undermined if “existing contracts and reporting requirements continue to move in the opposite direction. Contracts give you all the reasons why you can’t change what you are doing.”

Conclusions for the NHS

The transformative journey of Canterbury DHB under David Meates offers critical insights for the NHS as it continues its transitions towards integrated care. The success of Canterbury’s reforms, driven by a commitment to collaboration, system-wide integration, and a focus on patient-centred outcomes, illustrates the importance of addressing systemic fragmentation holistically. According to Meates, people in Canterbury were “30 percent less likely to be admitted medically unwell compared with the rest of New Zealand” because of these reforms.

Canterbury DHB’s experience shows that applying process and quality improvement techniques like Lean and Six Sigma to complex systems such as healthcare is no simple task; it demands a long-term vision and strong commitment from leadership to act. For too long, the NHS has been consumed by day-to-day pressures, and the introduction of ICSs has not been accompanied by the necessary cultural changes that can only clear, top-down strategic direction can bring.

Additionally, while the NHS has sought to place greater emphasis on citizen-centred care, it still often fails to adequately engage marginalised communities and provide co-designed, holistic care services that meet their needs. The establishment of community diagnostic centres is certainly a positive step in this regard, more needs to be done to ensure that these services are accessible and tailored to the unique challenges faced by marginalised and underserved groups. This includes overcoming language barriers, addressing cultural sensitivities and ensuring that services are easily reachable for those most in need. Citizen-centred care required continuous engagement with these communities, fostering trust and enabling them to have an active role in shaping their own health outcomes.

Key lessons from Canterbury DHB include prioritising cultural change, realigning incentives to emphasise system-wide benefits, ongoing community and patient engagement and leveraging technology like shared care records to enhance communication across care settings. By adopting these principles, the NHS can achieve meaningful, sustainable reforms that deliver value for both patients and the wider healthcare system.