Hutt Valley District Health Board chief executive for the last seven years, Chai Chuah, has been appointed the first national director of the National Health Board (NHB) business unit at the Ministry of Health.

Director-General of Health Stephen McKernan said the appointment of the national director was a significant step in the development of the NHB business unit, which has been set up to provide a better national focus on health spending.

Mr Chuah was seconded to the role of interim national director last October, and was well known in the sector, Mr McKernan said.

Former Treasury secretary Murray Horn has already been appointed chairman of the advisory board for the NHB.

Last year the Government approved a package of changes, including the NHB and consolidated backroom services currently provided by the 21 District Health Boards (DHBs).

Health Minister Tony Ryall said he expected a one-off cost of $5 million to $10m to make the changes, but up to $700m to be saved in the first five years from coordinating procurement and logistics.

The NHB will be a unit within the Health Ministry with a general manager and an advisory board whose chairman will report directly to the minister.

The new NHB will:

* take over funding and planning of specialist national services such as paediatric oncology, clinical genetics and major burns;

* take over infrastructure planning of IT, workforce and capital management from the DHBs.

Other changes include setting up a shared services establishment board to begin consolidating DHB backroom functions such as payroll and purchasing; strengthening regional cooperation in service planning and delivery which would require legislative change; and devolving $2.5 billion from the ministry to DHBs.