From Providers to PHOs : An Institutional Analysis of Nonprofit Primary Health Care Governance in New Zealand

Policy reforms to primary health care delivery in New Zealand required government-funded firms overseeing care delivery to be constituted as nonprofit entities with governance shared between consumer and producers. This paper examines the consumer and producer interests in the allocation of ownership and control of New Zealand firms delivering primary health care utilising theories of competition in the markets for ownership and control of firms. Consistent with pre-reform patterns of ownership and control, provider interests appear to have exerted effective control over the formation and governance of the new entities in all but a few cases where community (consumer) control was already established. Their ability to do so is implied from the absence of a defined ownership stake via which the balance of governance control could shift as consequence of changes to incentives facing the different stakeholding groups. It appears that the pre-existing patterns will prevail and further intervention will be required if policymakers are to achieve their underlying aims