Advice to the Incoming Minister of Health

Published in The New Zealand Herald, 20th October 2020 

Dear Minister,

The health portfolio is one of the most sensitive and complex. It absorbs 15% of government expenditure and supports 80% of all health transactions. The sector is vociferous, high profile and well populated by clamorous interest groups. Demand is almost infinite and cannot be fully satisfied.

You arrive in office at an opportune time: the COVID pandemic has provided a salutary “stress test” of the sector, the findings of the review of the health and disability system (the Simpson Report) await implementation, and you enter office with a mandate and a support partner with strong commitments.

The COVID-19 pandemic has underlined some issues that need close attention.

The “missing middle”. The urgency of the pandemic revealed an operational gap between the role of the policy Ministry in Wellington and the providers of care on the ground. This gap could be bridged by the implementation of the Health New Zealand agency proposed by the Simpson report.

Procurement and asset tracking. While New Zealand has a world-class agency in PHARMAC for assessing, funding and tracking pharmaceuticals, there is nothing comparable for health technology, medical devices and related health material. This became quickly evident in the early stages of the pandemic with failures in the tracking of ventilators and in the purchase and distribution of PPE. Implementing a proposal drawn up in 2012 to extend PHARMAC’s brief would address this shortcoming.

Digitisation and telehealth. The pandemic revealed weaknesses in New Zealand’s health digital infrastructure: manual processes were required for tracking and tracing, information systems did not articulate, the National Health Index number could have worked better, and the widespread use of fax machines in the sector is an anachronism. The potential productivity and quality of care gains from an integrated digital infrastructure are well known. This needs vision and leadership.

Pharmaceutical legislative reform. The world is addressing the potential for the creation of a vaccine. New Zealand’s framework potentially hampers our access: tight controls of compulsory licensing; inability to speed drug approvals if overseas agencies do so; limited access to data for generic companies. You should now promptly advance the re-writing of the Medicines Act that was initiated in the early stages of the first term of your government. This is unfinished business.

The review of the health and disability system brought to the fore somef issues for consideration.

According to the Simpson report, only 20% of gains in health status are due to health care providers. Much of the remaining 80% is attributable to the environment, lifestyle behaviours like exercise and transport, commercial determinants such as diet, alcohol and tobacco, and social factors such as housing, education, and income. We need an agency that has a focus on this 80% complex of factors. A precursor model of such an agency was the Public Health Commission of the 1990s.

The Simpson report rightly identified the plethora of health agencies in New Zealand as problematic. I agree, but the exact configuration is another matter. For example, the four Auckland and Northland DHBs have shown an ability to cooperate and plan together as a region through the pandemic, and yet still wish to retain distinct sub-regional connections and identities. I suggest four regional groupings of DHBs with centres in Christchurch, Wellington, Hamilton and Auckland. The commissioning, funding and planning functions would be aggregated into regional commissioning agencies, which would also absorb such roles from the PHOs and the Ministry. As in the 1990s, this would provide a mid-level set of four agencies using their commissioning power to knit together regional health systems.

The Simpson report also identified structures that do not add value but instead divert vital funds, namely: PHOs and the multiple opaque private agencies they have spawned which, anecdotally, divert a good five per cent of primary care funding; and corporates that may return 30% to their private equity partners. Action is needed to return these funds to patient care from structures that do not add value, possibly in the form of Primary and Social Care Networks devoted to maintaining people in the community and preventing hospital and institutional admissions.

A series of working groups could address other issues in the Simpson report.

Finally, your support partner. The Green Party has proposed an extension of ACC into the area of illness. 2023 will be the 50th. anniversary of ACC, and yet, after half a century, it remains unmodified and fixated on injury. Extending levies beyond injury to other illness-causing commercial activities in the areas of tobacco, alcohol, sugar, saturated fats and other harmful consumption products would not only extend health cover for New Zealanders beyond injury, but also reduce harmful consumption and improve health outcomes such as cancer, obesity, diabetes, particularly for our most vulnerable populations.

Peter Davis

Elected Member, Auckland District Health Board; Emeritus Professor, University of Auckland            

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