B.—4a

point in the foregoing review is the constitution of the forty-five hospital districts by the Hospitals and Charitable Institutions Act, 1909, and subsequent amendments. The Act also provided that Boards may unite to establish institutions, this applying more particularly to consumptive sanatoria, as few Boards are large enough to maintain a consumptive sanatorium for their own district. This power to unite for the special purpose of the establishment of consumptive sanatoria has been availed of in the South Island only, and the Otaki and Pukeora Sanatoria in the North Island are both maintained by the Government. We have recommended in connection with the Department of Health that these two institutions be handed over to Hospital Board control, and by this means the position in both the North and South Islands would then be identical. In the South Island the sanatoria are maintained by Hospital Boards. We see no reason why the sanatoria in the South Island should be maintained partly by local rates and partly by subsidy from the Government, while those in the North Island continue to remain a charge against general taxation. 64. To return to the general question of hospital administration, it is obvious from the everincreasing expenditure by Hospital Boards that some measure of reform is imperative. The period which has elapsed since the passing of the Act of 1909 has seen many revolutionary changes not only in regard to the diagnosis and treatment of diseases, but also in the density of population, &c., and consequently a review of the whole system is necessary, firstly, with a view to getting the best possible medical service for the whole community, and secondly, with a view to reducing the cost of hospital administration to a more reasonable figure, having in mind other charges upon taxation. 65. There are many commendable features of the New Zealand hospital system. The ease with which finance is arranged is, however, not within this category. The Boards have no power to strike rates, though their ability to levy on the constituent local authorities is limited by the power given to the Minister of Health to require amendment of annual estimates and to set up a Commission to inquire into the circumstances of levies considered excessive by local authorities. These powers were intended to prevent glaring cases of wasteful administration, but they have certainly not served as an adequate check upon the ever-growing hospital costs. 66. The system of finance by way of levy and subsidy also, in our opinion, has resulted in relatively small voluntary contributions being received by Hospital Boards. We say " relatively " because we believe that in other countries substantial sums are received by hospital authorities by way of voluntary donations and bequests, a.nd we see no reason why similar generosity could not be expected to operate in New Zealand. It is, however, a fact that any Government or semi-Government institution is not looked upon as a legitimate recipient of charitable bequests. 67. For financial reasons, if for no other, a proper and well considered reorganization of the present system is imperative. There are, however, other reasons why such a reorganization should take place. For instance, modern transport facilities have been so revolutionized of recent years that there is now not the same necessity for hospitals within a short distance of each other, and on this account the division of the Dominion into forty-five hospital districts is no longer warranted. We are aware that any suggestion which will dispense with the necessity for a number of hospital districts and hospital boards will meet with a storm of protest from the districts concerned. The matter must be looked upon in a national light, and considerations of parochial importance only relegated to the background. 68. Various suggestions have been made from time to time in order to overcome the present difficulties, but before any change is made regard should be had to the future, and an endeavour made to visualize what would be the best system. While this cannot be achieved at once, every step taken should have this end in view. It is worthy of note here that the Act of 1885 when it was first introduced provided for the establishment of twelve hospital districts, but the measure finally passed by the Legislature provided for the establishment of twenty-eight districts. This was as far back as 1885, but despite the development of the Dominion which took place over the ensuing quarter of a century, the Act of 1909 and its subsequent amendments provided for forty-five hospital districts. Population had no doubt grown, but there had also been a definite improvement in those years in transport facilities, and it is difficult to understand why forty-five hospital districts should have been considered necessary. 69. This aspect assumes more important dimensions when it is remembered that a Bill introduced in 1912 by the then Prime Minister provided for the division of New Zealand into twenty-four provincial districts. The purpose of the provincial district was to provide services which could not be properly carried out within the bounds of counties, mainly for education, hospitals, drainage, Harbour Boards, &c., and it was proposed that Provincial Councils should be elected by the various local bodies within the provincial district. The Bill provided that the administration of Hospital Boards, health, education, &c., was to be carried out by statutory Committees appointed by Provincial Councils either from their own members or from any person outside their membership. Had this Bill been proceeded with a much needed reform would have been instituted in 1913. The present system imposes far too great a burden on the taxpayer, owing to the multiplicity of Hospital Boards which have no responsibility for raising the funds they spend. Many of these Boards increasingly depend upon the Department of Health for guidance, and this in turn has increased the cost of administration of that Department. 70. If a national hospital system is to be evolved, there must be a central guiding authority, and before proceeding to analyse the deficiencies of the present system, due to the multiplicity of Boards, we have considered whether it would not be desirable, first of all, to recommend the setting-up of a Board of Hospitals which should be responsible for the administration and management of the hospital system generally. The system of control of hospital administration by a Permanent Hospitals Commission obtains in the State of New South Wales (vide the Public Hospitals Act, 1929, New South Wales). We have considered the provisions of this

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