This chapter highlights the current state of affairs in regard to health policy under the decentralization arrangements introduced in 1995. It contrasts the achievements of the health sector during the pre-independence, centralized system with the decentralized systems of governance implemented after independence. It then presents a set of options for policy makers to consider in their endeavour to rectify the declining state of the health services and, most importantly, the state of the people’s health.

Papua New Guinea has an accomplished history of sound health policy, and well-articulated health plans. Indeed Papua New Guinea health policies and plans have been widely complemented. Examples of the policies approved and in process for approval include: user fees policy for public hospital and dental services; national drugs policy; national cold chain policy (for pharmaceuticals); hospitals standards policy; partnership policy; health human resources policy; non-government organizations and churches salaries and allowances policy; national health insurance policy; and minimum standards for rural health services policy.

Notwithstanding this strong history of sound health policy, the periods covered by post-independence health plans have witnessed a slow but steady decline in the services available to rural people, and a stalling of improvements in key health indicators.

There are many and complex reasons for this demise. A key factor has been the impact of successive decentralization reforms on the organization and management of health services. Critical flaws are the lack of integration between national health planning and any budgetary planning, and the separation of the policy arm from the implementation arm of the health system.

A health system is a complex and highly technical operation based on scientific principles, and must have a clear vertical link from policy development to its implementation. For a health service to operate effectively there needs to be a single point of budget and management accountability, with direction being provided by people with technical knowledge and skills.

Clearly, these structural and organizational issues cannot be viewed outside of the concurrent social, economic and governance decay in Papua New Guinea. In the pre-independence time, there was a high level of optimism about the future of Papua New Guinea, the bureaucracy was effective and resource prospects were flourishing. However, since then the effectiveness of Papua New Guinea as an independent state has been questioned and successive governments criticized for mismanagement. The economic climate continues to be extremely fragile, law and order problems remain high on the agenda, corruption is a major problem throughout the country and the capacity of the bureaucracy to deliver basic government services continues to slowly decline. A recent independent review by the Australian Strategic Policy Institute highlights the lack of capacity of the bureaucracy to deliver health services, as one of the key challenges that impact upon the viability of Papua New Guinea as a functioning state. The report suggests that only a generational timeframe is now realistic for arresting the decline (White and Wainwright 2004). Thus, while the structural issues identified here perhaps once could have been addressed by making changes to the Organic Law on Provincial Governments and Local-level Governments, the problems are now too deeply ingrained to be resolved so simply.