‘Six challenges for the health reforms’ 

This article was published on STUFF, 28th Sepember 2021

With the current Delta outbreak and the largest vaccination programme since the 1960s under way, it is easy to forget that we also have in train the most ambitious programme of health restructuring since the 1990s.

Little survives from that previous exercise, so what likelihood we can do better this time?

The health minister has just announced Health New Zealand and Māori Health Authority interim board appointments and the transition unit has a busy work programme in hand. But what are the major challenges ahead once the restructuring programme starts, and what do they bode for its success?

The major challenges are in: equity (how inclusive will it be?), health goals (how realistic will they be?), funding (is there enough?), primary care (will it remain a “Cinderella” service?), system performance (can it be raised?), and operational balance (will it be too Wellington-focused?).

Equity. This has been a key goal for this Government, and no more than in the health sector. Hence the establishment of a Māori Health Authority, and claims for reparations under the Treaty of Waitangi for failures in primary care.

Not to be outdone, Minister for Pacific Peoples Aupito William Sio and Professor Collin​ Tukuitonga have sounded the concerns of Pasifika. And yet 50 per cent of the bottom income quintile are neither Māori nor Pasifika. So, the first big challenge for the reform process is – how inclusive will the equity agenda be?

Health goals. In the advocacy for Māori and Pasifika, life expectancy deficits of 6 to 7 years compared to non-Māori/non-Pasifika have been cited.

Yet those deficits are not entirely attributable to deficiencies in healthcare – probably less than 40 per cent. That still leaves substantial inequalities, but the new system needs to set realistic targets for health progress.

The second big challenge, then, is setting health goals that are realistic and amenable to known improvements in healthcare delivery.

Funding. Despite the constant cry for more funds, the health system in New Zealand is not markedly under-funded by international standards. However, Treasury believes that we are on a path to funding that is not sustainable on current tax settings.

That means either more public debt to pay for health, raising taxes and other mandated payments, leaving it to the private sector, or a mix.

This is the third big challenge. I have argued elsewhere that we should consider extending ACC to cover illness.

Primary care. The report of the Health and Disability System Review identified primary care (and public health) as in need of special attention. This will be very difficult.

The system is hugely biased towards hospital care. Of the nearly $2.8 billion budget of the Auckland District Health Board, just over $140 million is tagged for general practice. That’s 5 per cent (versus over 70 per cent for hospital services). That’s the thin red line of community resilience.

And yet, without that resilience, it has been estimated that, on current trends of an ageing population, the northern region would need another 2000 hospital beds by 2035. That’s the fourth big challenge. One of the key ingredients is for the profession to step up in a constructive and ambitious way.

Raising the performance of the system. This is a topic that has not got the attention it is due. The other side of the coin to adequate funding for the healthcare system is a commitment to monitoring and improving the performance of the system on behalf of the taxpayer.

This was a key focus of the reforms of the 1990s, and the ministry-developed measures of performance that could now be enhanced and more fully implemented. Both Treasury and, the OECD more generally have identified areas of improvement. This is the fifth big challenge.

Finally, the role of Wellington. In the soon-to-be-disbanded iteration of the health system we have a policy ministry at the centre, and a drastically devolved and localised operational arm, a configuration which in its turn was probably a political reaction to the single, Wellington-based Health Funding Authority of the 1990s.

But the pandemic has shown up the lack of an effective operational arm at the regional – not the Wellington – level. Getting the system balance right is the sixth big challenge.

There are no hard-and-fast solutions to the travails of the health system, and restructuring can go only so far. But, if the current iteration is to be a success, it needs to openly and transparently address the challenges of equity/efficiency, funding, and structural and geographic configuration, issues that all health systems face.

Peter Davis is Emeritus Professor of Population Health and Social Science at the University of Auckland.

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