Health
You have identified a number of first actions in the health sector:
- Instructing the Ministry of Health and DHBs to halt the growth in health bureaucracy.
- Opening the books on the true state of hospital waiting lists and the crisis in services.
- Fast-tracking funding for 24-hour Plunketline.
- Instructing that a full 12-month course of Herceptin be publicly available.
- Beginning to implement National's Tackling Waiting Lists Plan.
- Establishing a voluntary bonding scheme offering student loan debt write offs to graduate doctors, nurses and midwives who agree to work in hard to staff communities or specialties.
We understand from Better, Sooner, More Convenient that ministers fully appreciate the need to moderate the current rate of health spending growth, and to improve value for money, performance and productivity. The heath sector needs to find smarter ways of addressing the burgeoning demand pressures and the rising cost of supplying health services within a world of much tighter budget constraints over the foreseeable future.
The Treasury has some ideas on how government can tackle these challenges, which we would like to discuss with you as soon as possible. For example, the public health sector will need to prioritise much more rigorously across the many dimensions of health demand such as different health needs, treatment choices, population groups, or individual patients. Ideally this should be done at "arm's length", by those in the sector who can carefully test the evidence of relative clinical- and cost-effectiveness across a wide set of intervention choices.
Our suggestions on how you can best position the specific actions above within an overall story of improving the performance and sustainability of the health system are set out below.
| Policy proposals | Treasury comment | Recommendations/implementation advice |
|---|---|---|
| Instructing the Ministry of Health and DHBs to halt the growth of health bureaucracy | We expect central health bureaucracy to become much smaller and less involved in detailed resourcing/management decisions over time. The centre may need to temporarily play a more active role to facilitate change to achieve two important objectives:
|
Clarify that halting the growth in bureaucracy would not rule out creating new entities (eg, separating out the purchasing function of the Ministry) or prevent the centre from leading sector change. Endorse the Ministry's work with the sector to improve clinical safety, sustainability and performance - the Long-Term Systems Framework (LTSF) - due to report early in the new year. This will canvas many issues concerning ministers including identifying vulnerable services and regional solutions for localised problems. |
| Opening the books on waiting lists and the crisis in services | Care will need to be exercised to avoid unrealistic expectations about what can be offered by the public health system. There is a risk that ministers could become responsible for fixing every vulnerable service or unmet need. |
Ideally the process should be nested within the LTSF work already underway to identify vulnerable services and suggestions on how to address risks. Primary responsibility for addressing clinical sustainability and performance issues should be with the DHBs, individually or collectively. |
| Instruct that a full 12-month course of Herceptin be publicly available | Ministers may consider how this would be funded without losing the strategic advantages of a world-class prioritisation and purchasing agent for pharmaceuticals (Pharmac). Prioritising our community pharmaceutical budget involves complicated analytical and clinical engagement processes across a range of potential treatments. NZ has to deal with powerful pharmaceutical companies who will continue to lobby hard for their new products (which are likely to be high-cost, highly targeted, and have modest or unclear clinical benefits over existing treatments). Funding Herceptin outside the Pharmac framework could set a precedent for funding new high cost treatments in the future. |
We understand that ministers cannot legally direct Pharmac to adopt a 12-month course of Herceptin without legislative change. Ministers could ask Pharmac to commission an external review of its judgement on the relative merits of Herceptin (either as part of evaluating the 12-month trial, or earlier). If ministers want to proceed more quickly, they could ask officials to develop some kind of ring-fenced mechanism for funding Herceptin. This would require very careful thinking about risk management and communications strategies. |
| Beginning to implement National's Tackling Waiting Lists Plan | In upcoming Budgets, Treasury is expecting very large capital and operating spending bids aimed at maintaining access to existing services. In addition, the LTSF work on reconfiguring health services may generate important investment proposals to achieve more efficient and sustainable models of care. The Ministry should actively identify and promote best practice theatre and recovery models to upgrade performance to peak levels across all DHBs. This would help DHBs achieve tougher productivity targets. This should be supported by stronger ownership monitoring. |
Locate progress on the Tackling Waiting List Plan within the context of ongoing/upcoming/proposed DHB capital builds, so ministers know the overall size and urgency of demands before committing to early investment in electives capacity. If ministers want to progress electives more rapidly, then option analysis should be integrated with the advice coming from the Ministry in the new year on regional and national service planning and prioritisation. In either case, ministers and officials should drive DHBs harder to reduce electives waiting lists (while continuing to address other priorities) from their normal funding flows. |
