District health boards will be slashed and new government health agencies created in a massive overhaul of the health system.

The government has released its final Health and Disability System Review which aims to bring the biggest change to the health system since DHBs were created nearly 20 years ago.

It proposes a series of changes to reform a system which it describes as complicated and often failing Māori, disabled people and rural communities.

The key changes are:

• Slashing DHBs from 20 to between 8 and 12
• No longer having elected DHBs, they will be appointed instead
• Creating Health NZ - a new crown entity that will oversee services and finances and report to the minister
• Create a new Māori Health Authority
• Have greater sharing of services between DHBs

"The review is very clear, we can do better," Health Minister David Clark told media this afternoon.

"Our system is complex and fragmented," he says.

"Local planning must drive decisions, our health and disability system needs to better understand the real needs of the community and when and where services should be available."

The government is committing to an ongoing programme of reform to build a stronger health and disability system, he says.

"This will take time, you can't make changes to a system as large and complex as our health and disability system overnight."

The report recommended cutting the number of DHBs in the next five years, with the democratic voice on them gone.

At the moment there is a mix of elected and appointed members on most boards.

It wanted them to work together better to end the lottery of post code care.

With a country of just five million people, highly specialised services could not be in every area and they should be shared and integrated across the country, the report says.

The new Health NZ crown entity would focus on finances and operational work.

It would have eight board members and a chair, with an equal number of Māori and Crown representatives.

The Ministry of Health would still focus on health policy.

The new Māori Health Authority would sit alongside the Ministry of Health to focus on Māori outcomes.

It would work to build kaupapa Māori health systems and a greater Māori workforce.

It would not be possible to improve Māori health, which is worse as a population than the rest of the country, without making the system more suited to Māori values, the report says.

The report's lead author, Heather Simpson, said there was not yet a consensus among the panel that created the report about whether that authority should control the funding and commissioning of services for Māori health.

The health system had to shift focus in all areas from treatment to wellbeing, the report says

District health boards should clearly and transparently set money aside for primary health care - that's GP level care, it says.

And it wants the disability system simplified, saying it did not serve disabled communities well.

Rural communities were also disadvantaged and DHBs needed to work out how to serve them better, it says.

There should also be a focus on recruiting and retaining staff, simplifying IT systems and planning better for building work.

The government says the Cabinet has accepted the direction of the review and the need for reform.

However, decisions on the individual recommendations would be made in the coming months.

The decisions on individual changes will be mostly made under a new government, Clark says.

He says it's essentially a three to five year plan.

"I would be expecting a new government would want to progress this as quickly as possible, the direction of travel is very clear and the opportunity is huge."

It's a once in a generation opportunity, he says. "I'm quite excited by the opportunity."

Clark says there isn't much in the report he would disagree with.

-RNZ/Rowan Quinn.