Review of the Voluntary Bonding Scheme 2017


In 2017, the Ministry of Health undertook a review of the Voluntary Bonding Scheme (VBS) with input from stakeholders across the sector.

As a result of the feedback, the Ministry of Health plans improvements to the Scheme, ensuring it supports and complements other initiatives proven to encourage people to work in hard to staff areas. This includes making better use of data to determine hard to staff communities and specialties, earlier publication of VBS eligibility criteria, improved communications, and better monitoring of VBS retention rates as a measure of the effectiveness of the Scheme.

Over the next three years the Ministry of Health will implement a programme to align and target education and employer-led initiatives that World Health Organization research shows are effective in improving recruitment and retention in hard to staff areas, alongside financial incentives such as bonding schemes.

The Minister of Health has confirmed the recommendations of the VBS review 2017.

Background and context

The Voluntary Bonding Scheme (VBS) was implemented in 2009 to provide a financial incentive to new graduates to encourage them to work in areas (locations and specialties) that were hard to staff. There have been annual intakes on the Scheme since it began.

Rationale for the introduction of VBS 

To address some of the geographic and specialty maldistribution of the health workforce which has impacted on New Zealanders’ access to health services closer to home.

Two previous reviews of the VBS had been undertaken, the first in 2010 after its establishment and the second in 2012 once graduates from the first intake in 2009 began to apply for payments for the first time. 

Five years on from the last review it was timely to conduct another to assess the effectiveness of the Scheme.

VBS review 2017

Stage one– January to April 2017

Stage one of the review involved two aspects:

  1. analysis of available evidence on factors that make the professional groups and communities currently listed on VBS hard to staff
  2. consideration of evidence on effective ways to address those factors, including (but not limited to) the effectiveness of the VBS.

Information sources included a New Zealand and international literature review, feedback received from previous annual assessments of the VBS terms and conditions, and other relevant data and information. 

For instance, evidence from World Health Organization (WHO) research has identified strategic initiatives in four domains which have been successfully used in different combinations to address maldistribution of the health workforce in a number of countries: education; regulation; financial incentives, and professional and personal support; refer table of examples of strategies from WHO.

Based on work undertaken in stage one, the previous Minister of Health asked the Ministry of Health to look at aligning the VBS with other evidence-based education and employer-led initiatives that are likely to be effective in supporting recruitment and retention in hard to staff areas. The Minister also requested improvements, including more rigorous criteria for verifying hard to staff professional groups, specialties and communities.

The outcome of stage one was outlined in a letter to health stakeholders.

Stage two – May to September 2017

The second stage of the review involved extensive consultation with the sector on:

  • improvements to VBS
  • identification of aligned education and employer-led initiatives which are currently in place or planned.

The Ministry of Health engaged with more than 390 individuals and groups including employers, educational institutions, regulatory authorities, professional organisations, unions and government agencies. The engagement included written communication, a survey, submissions and face to face meetings. 65 stakeholders written submissions were received.

Many submissions confirmed support for aligning a bundle of education and employer-led initiatives with an improved VBS, acknowledging there is no single solution or ’“quick fix’.

The sector recommended a number of improvements to the Scheme which have been confirmed by the Minister of Health. The main ones are outlined below.  

Planned improvements to VBS 2018 - 2021

Improve workforce information and metrics

Workforce information and data is improving but further work is needed, particularly in understanding the whole workforce pipeline.

As a result of joint work between the Tertiary Education Commission (TEC) and the Ministry of Health there is good national data on students undertaking tertiary study, including by region of origin. This highlights whether education providers are recruiting students from hard to staff communities, which is proven to be an effective strategy for retaining staff to work in those areas.

However, good evidence and workforce metrics to inform prioritisation of hard to staff areas is not always readily accessible at the employment stage. This includes turnover, vacancies, and time taken to recruit. 

Action: The Ministry of Health will continue to work more closely with to improve the quality of this information.

Earlier publication of VBS eligibility criteria

The eligibility criteria for 2018 have been confirmed as well as provisional eligibility criteria for 2019. This is the first time that provisional eligibility criteria has been listed a year ahead and is in direct response to sector feedback seeking early publication.

Action: In future eligibility criteria for the following year will be published early in the current academic year to enable information about the VBS to influence student’s employment choices.

Simplify VBS communications

As a result of stakeholder feedback, the Ministry of Health has identified opportunities to better target potential communities of interest and to clarify VBS information.

Action: VBS material will be produced in a succinct and easy-to-read format including concise fact sheets for potential registrants, education organisations, and employers

Align VBS and other health workforce investments to enable changing models of care

There are opportunities to target the professional development of VBS participants through other Ministry of Health investments to support different models of care in hard to staff areas. For example, primary and practice nurses in hard to staff regions being trained to become nurse practitioners, which gives them legal authority to practice beyond the level of registered nurses.  

Action: The Ministry of Health is exploring potential links between VBS, other workforce investments, and changing models of care.

Monitor VBS retention rates as a measure of the Scheme’s success

The key measure of the Scheme’s effectiveness is retention in the specialty or community while on the VBS and after its completion. The Ministry of Health now has sufficient trend data to compare retention rates between VBS registrants and non-registrants over time. For instance, the retention rate for mental health nursing registrants within the Scheme is 21 to 30 percent higher after three to six years than non-registrants.

Action: The Ministry of Health is using comparative retention rate data to evaluate the effectiveness of the VBS.

Aligned initiatives – education


WHO research provides evidence that the most effective way to increase health workers in hard to staff communities is to target admission policies to enrol health students from rural backgrounds. Clinical placements in those communities also supports recruitment in those communities, particularly if they are positive learning experiences.

National student data from the Tertiary Education Commission (TEC) indicates students in specific professional groups are being recruited from most areas that are currently regarded as hard to staff. It also shows more work in needed in some areas.


The Ministry of Health has sought information from education providers on the range of clinical placements available to students in most of the hard to staff professions (i.e. general practitioners, nurses, and midwives). The quality of those clinical placements however is not known and further work is required.

Action: The Ministry of Health will work with TEC and relevant tertiary education providers to align clinical placements in areas that are hard to staff and encourage direct interaction between employers and relevant tertiary education providers on clinical placements and evaluation of the quality of those placements.

There is an opportunity to use the combined expertise and experience of The Ministry of Health, TEC and Careers New Zealand to join up pipeline work and strengthen the connection between education and employment with a focus on health careers for students from rural settings.

Aligned initiatives – employer-led

WHO evidence shows the effectiveness of well-targeted employer initiatives that provide professional and personal support to health professionals.

The Ministry of Health has sought information from employers on the professional and personal support currently in place for health professionals in hard to staff areas.

Action: Further work is needed to identify the most effective package of employer-led initiatives that support recruitment and retention of health professionals in hard to staff communities and specialties.

Strengthening the Scheme’s alignment to quality education and employer-led initiatives will take time and will involve a collective effort over the next few years. As a result, a three-year phased implementation timeline and process has been established to provide sufficient lead in time for initiatives to be put in place.

Table: Examples of effective strategies to address hard to staff health areas
Source: adapted from World Health Organization research

Category of strategies Examples
  • Students from rural backgrounds or with strong interest in a speciality
  • Health professional schools outside of major cities (eg, satellite locations in remote or rural areas)
  • Clinical rotations or other targeted placements in hard to staff communities and specialities
  • Curricula that reflects health needs (ie, in rural or speciality area)
  • Familiarisation programmes in specific rural/remote/special areas
  • Continuous professional development for rural health workers/those in speciality areas

Initiatives in New Zealand already underway

  • Rural immersion training programme
  • Home science academies
  • Enhanced scope of practice
  • Different types of health workers
  • Subsidised education for return to service

Initiatives in New Zealand already underway

  • Nurse prescribing
  • Health Practitioners (Replacement of Statutory References to Medical Practitioners) Act
  • Changes to the Standing Orders Regulations
Financial incentives
  • Appropriate financial incentives (direct or indirect), for example:
    • Loan repayments
    • Practice assistance for rural physicians
    • Salary guarantees
    • Service-requiring scholarships or bursaries
    • Grants
    • Provision of continuing professional education

Initiatives in New Zealand already underway

  • Voluntary Bonding Scheme – loan repayment or same incentive where no loan
Professional and personal support
  • Safe and supportive working environments – for example, through coaching, mentoring, and employee assistance
  • Communities of practice or outreach support
  • Career development programmes including distance learning, and telehealth
  • Professional networks
  • Public recognition measures

Initiatives in New Zealand already underway

  • Rural midwifery locum programme
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