Wednesday, 4 Sep 2019
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Personal (opinion)

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It goes without saying that having good health is a key part of New Zealanders’ wellbeing. The public health system, which has a fundamental role in helping New Zealanders have good health, is facing rising challenges in meeting demand for services while remaining financially sustainable. Accepting that there will always be some constraints on what we can do, this blog discusses how our health system could adapt to help achieve the best health for New Zealanders while remaining affordable for the country.

What is good health?

Good health can be described as physical, mental and social wellbeing and as a resource to live the life we want. It is not simply about being free of disease, rather it is about being able to manage well with stress, illness and disability.

Current state of our health system

At a high level, New Zealand’s health system performs well. Data shows us that New Zealanders experience similar, or lower, levels of health loss than people in other countries[1] and disease management has been improving over time[2] . These good results are a credit to the people who work in our health system.

However, within those good results the New Zealand health system has a number of challenges, many of which are long standing and need urgent action:

  • We don’t fully understand where our health system is working well and where problems exist so that we can share good ideas and fix problems.
  • It’s hard to definitively know if we fund the right mix of services, or if the balance should be changed for example to include more funding for health promotion and early intervention to keep people well and possibly reduce demand for hospital care.
  • The current New Zealand health system structure, which includes 20 District Health Boards and 31 Primary Health Organisations, may be too complex, lack economies of scale in some places, and spread some skillsets (such as health governance and planning) too thinly across the country[3] . Accordingly, while there’s no perfect structure, there may a good case for some changes (this issue is within scope for the current Health and Disability System Review).
  • We have widespread health inequity[4] , for example avoidable hospitalisations are higher for Māori and Pacific Island children and children living in communities with lower household incomes. Part of the challenges in this area relate to a need for more cross-sector collaboration with other areas that also have a large effect on people’s health such as education, housing and welfare.
  • There’s variation in the health services people with the same condition receive across the country with some treatments quite possibly better than others.
  • It can be hard to access care as quickly as people need, including GPs and elective surgeries.
  • Some new technologies, such as medicines, are not available as quickly as in other countries.
  • There is a need for ongoing development of the system to meet the varying needs of people of different ethnicities and to respond to the principles of the Treaty of Waitangi.
  • Concerns have been raised about the current pressure on, and the future sustainability of, a number of key parts of the health workforce.
  • The health system has a large need for new infrastructure, such as hospitals and IT systems, which may be difficult for the country to fully afford. Existing infrastructure is run down in many places.
  • District Health Board deficits are increasing (they are spending more than they receive in income) and long term forecasts show that, if current spending growth continues, it is unlikely to be affordable for the country without major trade-offs.
  • There are a number of rising challenges, such as from climate change and population aging, which will need to be responded to increasingly in future by the health sector and society as a whole.

Line graph depicting NZ Government health spend and GDP per capita on left axis and life expectancy at birth on right axis 1950-2018

As can be seen in the chart above, New Zealand’s Government health spend and GDP per capita, and life expectency have all increased since 1950. The increase in life expectency is influenced by many factors including the quality of the health, education and welfare systems and housing stock. Concerns have been raised that the past rate of growth in health spend will be challenging for the country to afford if it continues in the long term and that major trade-offs may need to be considered.[5]

Numerous work programs are underway in the health sector to respond to many of the challenges above including those led by the Health and Disability System Review, the Ministry of Health, District Health Boards, and the Waitangi Tribunal Health Services and Outcomes Inquiry. Given the size and number of the challenges, approaches are needed to find the best balance of those work programs across multiple priorities.

This need for balance is reflected in the Treasury’s Living Standards Framework that measures national wellbeing across four areas: human, social, financial/physical, and environmental.[6] It is also reflected in frameworks that help describe what good health system performance look like such as the Triple Aim used by New Zealand’s Health Quality & Safety Commission, the Ministry of Health’s Māori Health Strategy He Korowai Oranga, the Australian Health System Conceptual Framework, and the Canadian Health System Performance Measurement Framework.

How can we have the best health system in the future?

There’s no simple answer to how we can achieve the best possible future health system that can provide the most benefit to New Zealanders’ wellbeing.

As New Zealand’s demography changes (including population growth and aging), and health needs and technology evolve, more funding will be needed. We also know that money alone isn’t enough.[7] How well a health system is run and uses its resources also matters. In particular, learnings from here and overseas indicate that:

  • Ongoing development of health stewardship is important. This should involve high quality strategy development and ensuring that the right information, organisational cultures, incentives, partnerships, and accountability arrangements are in place to implement those strategies.[8]
  • Development of leadership capabilities, and structures, is valuable to ensure the right mix of skills across the health system and a good balance between local input and the use of specialist governance and planning skillsets that may only be available at a regional or national level.
  • It is important to consider the best balance between providing health services locally and having regional or national level services to maximise use of specialist clinical skillsets.
  • Investment in capability and systems to support improved productivity and prioritisation is essential. This can help ensure that the system uses resources well to maximise service delivery within the funding available and that those services are provided to the people who can most benefit. Improving productivity and prioritisation may involve:
    • Better recognising the existing strengths and good approaches within the health system and developing more systems to share them.
    • Increasing cross-social sector collaboration so that problems are fixed at the best point in time. For example this may involve more review of the sufficiency of programs to improve housing to reduce avoidable hospitalisations and more support for these programs where needed.
    • Reducing waste. The OECD argues that around 20% of the health spend in OECD countries could be better used by reducing unnecessary care, providing the same benefits to patients at lower cost (e.g. through improved procurement approaches), and through careful management of system administration costs.[9]
    • Reducing costs by quality improvement. The King’s Fund argues that, while quality improvement and reducing costs are sometimes seen as opposing goals, there are many opportunities to do both at once by “reducing unwarranted variations in care and addressing overuse, misuse and underuse of treatment.”[10]
  • Workforce planning and development is needed to ensure that staff are available for the services we need in the future. This planning should be linked to productivity and quality improvement by service and model of care design work, and initiatives to spread specialist knowledge more widely across the system such as Project Echo.[11]

In short, meeting the health system’s challenges and delivering the best health outcomes for New Zealanders, will require ongoing investment in how well the system is run. It will also require a willingness across the health sector, and central government agencies, to test that:

  • The current health system leadership, strategies, improvement programs, and level of collaboration are good enough. Where they aren’t we will need to do more. The current Health and Disability System Review has a role to play in this space, but it should remain an ongoing focus across the sector.
  • The balance of the health system’s attention remains on the right areas. As the health sector’s financial sustainability becomes increasingly difficult to manage, which seems very likely, we must ensure that other areas such as health equity, service access and quality, workforce wellbeing, and cross-social sector collaboration receive the attention they deserve.

Appendix 1: Frameworks for health system performance assessment

New Zealand's Health Quality & Safety Commission, Triple Aim

Green triangle showing quality improvement for Individual, Population, and System, each on one side of the triangle.

Australian Health System Conceptual Framework

Chart explaining the plans to improve health outcomes for Australians and ensure the sustainability of the Australian health system

Canadian Health System Performance Measurement Framework

Flow diagram showing the relationship between political context, demographic context, and economic context in relation to the Canadian Health System.

He Korowai Oranga Framework

Components of the framework shown in a pyramid


  1. [1]
  2. [2]
  3. [3] Issues around the current configuration and management of primary care are discussed in this report:
  4. [4] Health inequity can be described as differences in health between population groups that are avoidable and are considered unfair and unjust.
  5. [5]
  6. [6]
  7. [7] This point is highlighted by international comparisons which show that some countries spend considerably more than us on heath but have poorer health outcomes for their population. Health outcomes are also significantly affected by areas outside the health system such as access to education, housing, jobs, and welfare.
  8. [8] Stewardship can be defined as “the careful and responsible management of the wellbeing of the population”
  9. [9]
  10. [10]
  11. [11]
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