Health Minister David Clark says he is "seriously disappointed" with the Waikato DHB."
The cash-strapped Waikato District Health Board will be replaced by a commissioner until 2022.
Since Health Minister David Clark indicated the appointment, nine of the 11 board members have resigned.
The DHB's facing a $56 million deficit this year.
The incident has raised questions about whether the country needs 20 separate health boards.
Clark told Mike Yardley that he thinks there is plenty of room for these DHB's to merge or share resources.
"They've got to be some efficiencies there."
He thinks it is "too soon" to put a number on how many there should be.
Clark says that the benefit of how this many is that they are able to monitor and better focus on local needs, but that the system could be improved.
He says that an interim report from the review of the health and disability sector is due in August.
Clark also agrees that Pharmac is the best model, but knows it is not perfect.
"I have instructed them to have a look at the transparency at their process so people can better understand their decisions."
He says that other countries wonder how New Zealand is able to get such good value out of Pharmac.