However, it has not closed the door to further negotiations.
In the meantime, the board agreed there was an urgent need to establish what it wants of PHOs.
It intends developing "partnership goals for effective primary health organisations" in conjunction with existing PHOs, the Southland and South Canterbury district health boards and South Link Health.
However, members considered having a consultation period of up to six months as originally suggested would be difficult for PHOs, because of the lack of certainty it would give them.
South Link Health, an Independent Practitioners Association which supports general practitioners, wants to establish a new PHO, Health Care Network (Te Tai Tonga), across the Otago, Southland and South Canterbury regions which are now covered by 10 PHOs.
SLH chief executive Prof Murray Tilyard and chairman Dr Dean Millar-Coote told the board the proposal met the requirements for a PHO, could save more than $1 million in administration and make other savings through more integrated care and better control of pharmaceutical expenditure, and would allow greater opportunity to provide more services.
Prof Tilyard said SLH would be prepared to revisit the application, expanding or reviewing it as required.
Existing PHOs have not favoured the proposal and representatives of several of them were at last Thursday's board meeting to say so and outline their achievements and the work they were doing on cross-PHO collaboration.
Concerns included whether SLH's level of involvement with the new PHO was appropriate (Maori, the community and SLH would be shareholders in the charitable company), and how a clinically-led organisation would fit communities.
Otago Southern Region PHO chairman Walter Dalziel described the SLH proposal as riddled with conflict and self-interest which would be a return to yesteryear with a "different hand on the light switch".
He asked board members to remember "bureaucrats, governments and health professionals come and go, but communities are forever".
Mornington PHO member and GP Dr Sharleen Johnston said if the board truly believed better communication was needed, it should seek that while "standing in front of a very large mirror".
The PHO sent 62 reports to the board which were never acknowledged, Dr Johnston said.
She was also concerned that SLH, because it had managed services for PHOs, was privy to information about groups with which the PHO would be directly competing.
Board member Richard Thomson said the information presented by PHOs made him wonder if the board was trying to be "too . . . clever" in attempting to find complicated answers when much could be achieved through a combination of clinical expertise and "good citizenship".
Board members Susie Johnstone, Peter Barron and Judith Medlicott declared an interest and did not participate in the discussion.
