Intended for healthcare professionals


What can England’s NHS learn from Canterbury New Zealand?

BMJ 2013; 347 doi: (Published 29 October 2013) Cite this as: BMJ 2013;347:f6513
  1. Nicholas Mays, professor of health policy 1,
  2. Judith Smith, director of policy2
  1. 1Department of Health Services Research and Policy, London School of Hygiene and Tropical Medicine, London WC1H 9SH, UK
  2. 2Nuffield Trust, London, UK
  1. nicholas.mays{at}

That integrating health and social care in a similar system is possible

A recent King’s Fund report describes impressive progress made by Canterbury New Zealand.1 It moved from a situation in the mid-2000s when the main acute hospital was regularly “gridlocked” with no possibility of affording additional capacity, to one where there is an extensive system of care coordination across hospital, community, social, and primary care. As a result, emergency medical admissions, lengths of stay, and readmissions have fallen appreciably. This raises two important questions: how was this achieved; and what can the English NHS learn from Canterbury, given the strong similarities between the two countries’ systems?

What did Canterbury do? From the mid-2000s, Canterbury District Health Board (which is the statutory local funder of health and social care, and also the manager of hospital and some community health services) began a process to persuade local health professionals and the public that provision in the district was financially and clinically unsustainable. The board argued that it needed to plan for the coming 20 years on the basis of “one system and one budget,” transcending the usual organisational and financial divisions. New strategic goals and principles were agreed locally, in particular, to deliver “the right care, in the right place, at the right time by the right person.”

Over 2000 staff and contractors were trained to identify and bring about service change, enabling design and implementation of new “health pathways” across general practice, social care, and hospitals. Activity based payments for hospitals were replaced with bottom-up budgeting for each specialty, and contracts for externally provided services were moved from a competitive, often fee for service basis—to a form of alliance contracting that was derived from the construction industry. This entails organisations agreeing contracts in which maximum collective gain can only be realised if all parties support one another and agree to share any losses.2

What enabled this to happen? In 2008, an incoming, right of centre coalition government pledged that it would not impose reorganisation on the system, and has kept its word through two parliaments. Sustained policy goals have focused on clinical leadership, service integration, and delivering locally to a set of national outcome measures.3 This wider stability of the health system seems to have given local health managers (most of whom have been long in post by English standards), clinicians, and board members space to implement plans that meet local needs and national outcomes. Critical to this has been a longstanding, highly developed network of general practices established in the early 1990s,2 which had steadily built a culture of collective peer review, service development, and practice support across Canterbury. This network, Pegasus, has enabled Canterbury to involve primary care in new ways of developing and using clinical guidelines and pathways, sharing data, and working with the wider healthcare community.

Canterbury has largely removed two factors frequently cited as obstacles to service integration in England4: the goal of competition between providers; and a payment system that tends to incentivise hospital activity. In New Zealand, the bruising experience of aggressive pursuit of quasi-market reforms in the 1990s seems to have ruled out any return to the use of market forces between hospitals.5

Unlike the current context in England, Canterbury’s budget grew reasonably in real terms: between 3% and 6% per year throughout the process. This allowed it to invest the increases outside the hospital while restraining the rate of growth in hospital spending. Efficiency improvements in hospitals did not lead to the removal of funds from hospitals—rather, they allowed more elective work to be done.

Alliance contracting is widely regarded as important for service integration. How far it represents true sharing of financial risk and reward, and can withstand the future challenge of reducing hospital capacity to extend primary care provision further, is yet to be proved. The contracts have not been through the stress of renewal, but they have enabled a more collective approach to local health funding that seems to encourage service integration.

A final factor impossible to quantify is the effect of the 2011 Christchurch earthquake in reducing hospital capacity in the city by over 100 beds, bringing health and social care staff together to develop innovative solutions to deliver safe services, and quickening the plans for service integration that had been long in discussion.

The Canterbury experience offers several insights for the NHS in England. Firstly, there is the uncomfortable message that frequent reorganisation of the system, and particularly of the commissioning function, undermines local attempts to make significant and sustained changes to services.6 The New Zealand government has upheld its promise not to reorganise the system. Likewise, at a local level, continuity of clinical and managerial leadership is an important enabler of changes to services.7

Secondly, organised general practice is a vital prerequisite to developing new forms of coordinated care. This is something that English general practitioners have sought at various times over the past two decades, and with the current interest in general practice federations and networks, seems closer than ever before.8

Thirdly, as noted in analyses of evidence on integrated care, district wide coordination of care benefits from careful crafting of governance, contracting, funding, and information sharing to support the overall approach.9 In particular, a focus is needed on sharing risk and responsibility across health organisations as a way of driving out care fragmentation, rather than encouraging competition between organisations.

Finally, it seems that having a local statutory funder with responsibility for both health and social care helps integration of care for frail older people in particular.


Cite this as: BMJ 2013;347:f6513


  • Both authors developed the line of argument in the article and contributed equally to drafting the article.

  • We have read and understood the BMJ Group policy on declaration of interests and declare the following interests: none.

  • Provenance and peer review: commissioned, not externally peer reviewed.


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