My View - Health NZ funding cuts a tipping point for our health system

VIEW - Ryl Jensen, chief executive, Digital Health Association (DHA)

The recent announcement of 1,120 potential redundancies—comprising 470 unfilled vacancies and over 650 staff positions—within Health New Zealand’s data and digital teams, is a wake-up call for the future of New Zealand’s health system.

These are the people who bring modern programmes of work to life and keep aging IT systems operational—systems that often require significant maintenance and upgrades to function effectively.

Without their expertise, the risks are clear: widespread disruptions, front-line clinicians struggling to deliver timely care, stalled efforts to modernise the health system, and patients left to bear the consequences.

A compounding problem

This devastating potential loss of institutional knowledge follows earlier job cuts within Health New Zealand’s data and digital workforce this year. With so much expertise on the line, the health system faces an uphill battle to retain and rebuild the capability required to support its digital foundations.

New Zealand’s health ecosystem includes a staggering 6,000 IT systems—a fragmented landscape resulting from decades of underinvestment in technology by successive governments. Instead of addressing this systemic issue with a long-term vision, the Government has taken a short-term axe to data and digital services, compounding the problem.

Over the past two years, there had been promising progress on systems designed to transform how our health system is connected. Yet the legacy of 20 separate District Health Boards (DHBs) has left us grappling with a fractured and complex structure that perpetuates a postcode lottery for healthcare delivery. These funding cuts threaten to undo that progress, leaving the system stuck in the past.

This is not just about the present—it is about our future. The $380 million in cuts to data and digital programmes in Budget 2024 have already led to numerous transformative projects being mothballed. These projects were designed to bring the health system into the 21st century, addressing longstanding inefficiencies and enabling the delivery of equitable, modern care.

The disconnect

The Digital Health Association (DHA) recently presented a report to the Health Select Committee, highlighting the critical risks these cuts pose to the sustainability and progress of the health system. The Government’s own Policy Statement on Health underscores the importance of data and digital platforms in supporting the health workforce and infrastructure, yet the disconnect between this vision and actual action is deeply concerning.

The mixed messaging from the Government has left many questioning the priorities for this portfolio. How can we address the growing challenges when the strategy appears inconsistent and fragmented?

Does the Government perceive IT functions as merely back-office operations? This perspective overlooks their critical role as front-line tools that support and enhance the health workforce.

Modern healthcare delivery relies on robust digital systems to enable timely access to patient information, streamline clinical workflows, and ensure coordinated care across the system. By sidelining IT as a non-essential function, the Government diminishes its integral contribution to equipping clinicians with the tools they need to deliver better, faster, and more efficient care.

This narrow view undermines the potential of digital health not only to modernise the system but also to directly improve patient outcomes and the productivity of an already stretched workforce.

The need for action

The industry may well have to step in to fill the void left by these cuts. However, there appears to be no plan for how this might be achieved. These cuts have been implemented so swiftly that there has been no time to reimagine a pathway forward—one that could provide a workable solution. The result could be upheaval and disruption across the entire health system, further compounding the challenges faced by clinicians, patients, and support staff.

The need for action is urgent. We are calling on the Government to listen, to partner with those who are ready to help, and to prioritise the long-term sustainability of our health system.

The health of New Zealanders depends on it.

Picture: Ryl Jensen, chief executive, Digital Health Association (DHA)

If you want to contact eHealthNews.nz regarding this View, please contact the editor Rebecca McBeth.

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