This policy involves no change but seeks rather to continue to pursue initiatives that are being undertaken by provincial and local-level governments. It is based on the assumption that the implementation of the reforms can be improved and that by modification and improvement of processes, service delivery will improve. It also assumes that resourcing of facilities, especially at the district and local levels, will improve in the not too distant future.

The main attraction of this option is that it requires no further organizational and legislative change. It also has the advantage of providing more time for authorities to take steps to improve the implementation of decentralization. For a few well-performing provinces, like Milne Bay, the 1995 OLPGLLG provided an opportunity for an active and committed province to move well ahead of many others in the delivery of health services, and to access additional funds for health from sources such as the Papua New Guinea Incentive Fund, an AusAID fund that rewards well-performing entities.

However, after more than a decade, the many disadvantages of this option are becoming painfully apparent for most provinces. Many of these have been outlined in this chapter and in most provinces it is a policy that is not working.

This option seeks to affirm the concept of re-centralization, but rather than taking the concept holistically, it aims to utilize alternative established mechanisms to advance the cause. The option proposes to re-centralize authority from the provinces but rather than fully transferring power and functions to Port Moresby, shifts it to the public hospitals which are physically located in the provinces. The public hospital services are a national function under the Public Hospitals Act and could be utilized for this objective. But while they are a national function, as they are located in the provinces they provide a potential mechanism for central coordination and monitoring of priority health programs. Under this option, rural health staff would be transferred to the existing hospital structure, which would establish a division of rural or public health services.

This option is very attractive to many who believe that hospitals can play an influential role in guiding, setting and monitoring clinical, public health and management support standards in the provinces. It would be relatively simple to achieve. Hospitals are large organizations, and are the focal point for the greatest health sector expertise and resources in each province. They could provide a central management and coordination point in each province for health services. The policy of designating all public hospitals as in-service training centres for a province indirectly supports this option. The technical skills and management expertise of hospital staff can be applied to the benefit of rural health services as well as the maintenance of biomedical equipment, and logistic, financial and human resource management skills.

As against this, this policy option has been criticized on the grounds that the main focus of hospitals tends to be curative health provision, and few see them as centres of public health expertise. Many would be fearful that as hospitals are increasingly pressured by their immediate population, they will fail to prioritize public and rural health. The provincial health advisers may not be supportive of this option, as it would mean the loss of their independence from the public hospitals. Provincial administrators may also see this as a loss of control and resources. If the hospitals are accountable for health services, then decisions on the allocation of provincial funds for health services and would be channeled through the hospitals. This is likely to meet with resistance. It may also compromise provincial government funding. Provincial governments are not obliged to allocate a particular proportion of their budgets to health and may not continue to provide funding to health if the responsibility for service delivery is shifted to hospitals.

While CEOs have been chosen for their hospital management skills, these are not necessarily the same skills required to run a public health system. The hospitals may be strained by the additional responsibilities, especially at the district level. Hospital CEOs have not had to cope with the difficulties of administering staff and activities at a distance. A final shortcoming as a national policy is that not all provinces have a provincial hospital, so this option would not be viable in all provinces.

This option also seeks to affirm the concept of re-centralization, but recognizes the necessity for coordination, and aims to utilize previously established coordination mechanisms at the provincial health board level. Under this policy option, existing provincial health boards would take over management of the health system in the province.

This is a familiar model and one that most provinces would consider favourably. It retains control of resources and staff at the provincial level, but centralizes coordination and management of resources from the districts. There are several obvious advantages in adopting this option. First, it is the least likely to encounter resistance from provinces. Secondly, it bases its rationale on assisting provinces to be self-reliant, is sustainable in the long run, and would not necessarily need major institutional, administrative, economic or political restructuring and manipulation. Thirdly, it is consistent with the spirit of the 1995 reforms.

As with the other options, however, there are also some disadvantages. Provincial health boards are in varying shapes, with some having only just been established; few have demonstrated their effectiveness on a continuing basis. Unless hospital staff become employees of the provincial health board, this system retains the disadvantage of the hospitals and rural health services being managed separately, and would continue to challenge coordination and integration. It is likely be resisted by district administrators, as it reduces their power and span of control. If hospital staff are directed by the provincial health board, there is a risk that the poor management of hospitals witnessed during the delegated period may reemerge. Gains in hospital management may be lost. Hospital funding may also suffer. Hospitals are funded directly by the national government and because they are statutory authorities they are treated as grant recipients and run their own accounting systems.

This option proposes to re-centralize authority from the provinces through complete transfer of power and functions to Port Moresby. It is likely to encounter most resistance from provinces, is against the spirit of the 1995 reforms, and would be a huge undertaking in terms of planning and resourcing.

For those with memories of the pre-independence system, there may be perceived advantages in re-centralizing services. It yields a single point of accountability and allows for centrally-planned resource allocation and prioritization of key health programs.

Re-centralization would be attractive from a central point of view. However, for one thing, Papua New Guinea has adopted a decentralized political and administrative system and this is now ingrained in the minds of people. Several provincial governments and their administrations have in good faith pursued decentralization, have learnt a lot from the experience, have invested a lot of time, resources and effort in the process, and are making a success of it. For another, recentralization implies unlearning the processes and systems developed, and relearning centralized political and administrative systems. This option poses the question: is full re-centralization of health services a fundamental necessity to improve health service delivery and consequently improve health status indicators for our people? A further question about the 1995 reforms is whether they were always unlikely to improve essential social services such as health and education.

This policy would enable provinces which were unable to self-manage their health services to outsource provincial health implementation to competent third parties, including the national Department of Health, private sector entities, and NGOs. This is already partially the case in many provinces, where the churches act as health implementers. It could enable several provinces to form a network which could service their requirements.

This approach would provide for poor performing provinces to opt for outside assistance to manage and coordinate their health services. It could take advantage of economies of scale by consolidating service delivery mechanisms, for example, by more effective use of charter flights and boat travel.

As against this, it would require a funding process agreed between the province and the third party implementers, and regular and complete reporting of the use of provincial funds.

A single policy option will not suit all provinces. A province that is already making headway in terms of implementing the 1995 reforms and seeing benefits in health service delivery, would probably wish to continue along this path. One of the drawbacks of the decentralization process was that it disregarded the varying stages of development, economic and political, between provinces and districts. Measures need to be tailored to the specific needs of the different parts of the country.

In considering the policy options, a number of factors need to be considered: first, services should be managed at provincial or district level only if they have the capacity; secondly, no matter which policy option is chosen, funding arrangements need to ensure the timely flow of resources to priority programs; thirdly, some options will require legislative change, enabling line reporting by district staff other than to the district administrator; fourthly, reform of intergovernmental financial arrangements is needed to provide for tying funding to health system performance.