Another Review of PHARMAC

With each major change of government in recent years, PHARMAC has been required either to list a particular drug (Herceptin under National), or undergo a review (the current government), or both a new listing (Interferon) and a review (in the early 2000s).

This degree of scrutiny speaks to the sensitive and contested area the agency occupies. As an agent of government it makes inherently controversial decisions (with life-and-death consequences in some instances), but at arm’s length from the political process.

This time, however, the debate around PHARMAC seems to be different. In thirty years of observing this area, I have never seen such a concerted assault on PHARMAC, with barely a week going by without a petition or a media story about the alleged baleful influence of PHARMAC on access to medications. There could be several reasons for this. Is more expected from a government of “compassion and kindness” after a decade of “soft austerity”? Is there a hungrier media and a pharmaceutical industry that is more energetic and savvier? Is it that PHARMAC taking over the procurement of cancer drugs from the DHBs presents a single target? Are social media platforms fuelling more populist, anti-establishment groups across a range of issues?

Whatever the reason, we now have a review headed by Sue Chetwin, former CEO of Consumer New Zealand, with a panel including Heather Simpson, Chair of the Health and Disability System Review, and with terms of reference focused on performance, transparency and accessibility, timeliness of decision-making, equity, new and emerging drugs, criteria for prioritisation, and safety.

On performance, PHARMAC has done well, making savings each year equivalent to its entire budget and sufficient in size to fund a major DHB. It has also taken on an ever-expanding menu of tasks (most recently medical devices) with both quality gains and cost savings.

On transparency and accessibility, it is surprising to the layperson to find that, while financially sensitive information is not open to scrutiny, the records of the key decision-making committee (PTAC) are available on the website. It is also the case that PHARMAC is subject to the Freedom of Information Act, and has a whole section of its website devoted to responding to a large number of requests.

Timeliness of consideration of a drug can be an issue, but often full information is not available to PHARMAC on the entry of a drug to the New Zealand market. This also relates to the government’s interest in new and emerging drugs. Over half of recently listed drugs internationally have been “expedited”, often under circumstances where information on key indicators such as longevity and performance relative to existing drugs is not immediately available.

Equity and prioritization are hard to judge. New Zealand has a low patient co-payment for prescription drugs. Ninety per cent of pharmaceutical use is accounted for by just twenty per cent of medication users, suggesting that those most in need are being targetted, including for multiple conditions requiring complex treatments.

Finally, safety. This is probably prompted by the concerns over PHARMAC’s attempts to substitute cheaper but equivalent generic drugs for more expensive brands. In research with which I have been associated on those with epilepsy, we have found this not to be a problem, although there can be a perception of harm (the nocebo effect) that is not discouraged by the industry.  

Apart from a major funding boost (which is outside the terms of reference for the review), where could PHARMAC raise its game? The industry, and the advocacy groups it fosters, are winning the public relations battle hands down. PHARMAC is in danger of becoming so demonised that it will lose the current tenuous political traction and social license it currently enjoys – because media can always find a human-interest story, with an associated morality tale, on issues of medication access.

But there is another side to this story. Almost all the drugs in question are very expensive, and many of them add limited clinical advantage to existing treatments. Looking through the records of the meetings of PTAC, one can see the careful way in which committee members weigh different sources of information as they become available. Unfortunately, that does not make headlines.

PHARMAC is a remarkable and, to date, unique New Zealand innovation. t is equally remarkable that the agency has survived since 1993 under sustained attack from the pharmaceutical industry. It has had the good fortune to occupy an ideological and pragmatic common ground between governments of very different pollical persuasion for over 25 years, in part because of the billion dollars a year in drug purchasing costs it saves.

Maybe that will see it through this review, as it has through previous challenges to its existence.

Peter Davis

Emeritus Professor of Population Health and Social Science

University of Auckland

Published on STUFF website, 6th March 2021

After COVID. Beyond GDP Growth

With the start of the largest immunisation campaign in our history, and the continuation of strong public health measures, New Zealand’s largely COVID-19 free status can be consolidated, although we have to wait a while longer before the wider world becomes more health secure.

Here, we can now look ahead to our post-COVID future. Will we grasp this opportunity to map out a bold future, or will it be largely a return to “business as usual”? If our response after the Global Financial Crisis (GFC) is any guide, the prospects for fresh thinking leading to transformational are not good.

After the GFC, and cheered on by the bank economists and the commentariat generally, New Zealand suffered a collective failure of imagination. In the pursuit of untrammelled GDP growth we went for volume rather than added value and innovation. Essentially the strategy was about more of everything: international tourists and students, migrant workers to fill the gaps we couldn’t or wouldn’t fill ourselves, more unprocessed primary commodities, and more roads and vehicles. This all contributed to economic activity, but added little value, diversification, or new directions, and put considerable pressure on our infrastructure and our ecosystem.

It also required the government to look the other way as greenhouse gas emissions soared and questionable emissions units were traded, fresh-water systems suffered, logging debris was left unsecured, fishing vessels could ignore catch requirements, safety standards in trucking were not properly enforced, low-value providers in international education and elsewhere flourished, and short-term visa migrant employees were exploited at work.

Is there another way, and is New Zealand well poised to take advantage of it? A recent report in the Global Competitiveness series from the World Economic Forum (WEF) suggests we are well placed. The report – – reviews the prospects for post-COVID transformative economic and institutional change in 37 countries (including New Zealand), assessing a range of indicator across the three Ps of productivity, people and planet.

The top performing countries are almost all small-to-medium social market countries with competitive economies and developed welfare states: namely, Demark, Finland, and Sweden in the first rank, with the Netherlands, Canada and New Zealand not far behind. The one exception is China, which also features in the second rank. Our usual comparators, such as Australia, the United Kingdom and the United States, are towards the middle of the pack, with Greece, Hungary, Mexico, and Turkey in the bottom decile.

Where does New Zealand do well above average in the 100-point scoring system? We are in the top rank when it comes to quality and trust in our public institutions, a thriving, long-term oriented and stable and financial sector (although data availability is very limited here), and indications of diversity, equity, and inclusion (again, with limited data availability). New Zealand is also above average in keeping education and skills training up-to-date, in the quality of its labour laws and social protection, and in expanding access to care services and improving health system resilience.

But where is New Zealand below average and needing to lift its game? Despite all the public rhetoric, WEF sees a need to upgrade infrastructure for the energy transition and ICT access. It also thinks New Zealand could do a lot better in shifting taxation in a progressive direction, creating a more competitive and vibrant economic environment, facilitating the higher-technology “markets of tomorrow”, and incentivising and encouraging the long-term investment in research, innovation, and invention needed to underpin those markets.

These insights into areas of strength and weakness in New Zealand’s economic and institutional structure are not necessarily new. What is new is the comparative framework that allows us to view ourselves in relation to 36 other economies on key parameters of performance, and to find that we are close to the top rank – and that those comparator countries are not dissimilar to ourselves in many societal and economic features. We are in that cluster of small-to-medium-sized countries that operate largely on a social market basis with a competitive, open economy underpinned by environmental protections and with a well-developed set of welfare state arrangements that provide the essentials of an enduring social compact fora cohesive and fair society. We have the potential to transform. The question is whether we have the will to do so.

Peter Davis is Chair of The Helen Clark Foundation, an independent public policy think tank. 

Published on The New Zealand Herald website, 24th of February 2021

Observations on COVID in Aotearoa New Zealand

By dint of a dash of luck and a quantum of good management, the five-million strong island nation of Aoteaora New Zealand, wedged between the continents of Antarctica and Australia, has to date come through the COVID crisis largely unscathed. There have been 25 deaths – most in aged care residences – about 2,500 recorded cases of the disease, 75% in quarantine at the border, a national and a regional lockdown, and a few isolated outbreaks. But otherwise, at the time of writing, life is back to “normal” with a typical Antipodean summer break, in-person sporting and cultural events, and the economy close to pre-COVID levels. Borders, however, are closed to most non-nationals, and two major export industries – international tourism and overseas tertiary students – are for the time being on pause.

As a health sociologist, what observations can one make?

The infectious diseases are back! When I first arrived at the Medical School in the mid-1970s we were all certain that the infectious diseases were vanquished and now we had to grapple with “the diseases of affluence”, the NCDs. The arrival of HIV taught us different, and COVID reinforces that.

Non-pharmaceutical interventions are back! The most effective interventions prior to vaccination have been those involving changes in behaviour – distancing, hand washing, masking, isolation. All of a sudden the behavioural and social sciences have come into their own, for a time at least.

Leadership matters! New Zealand was ill-prepared for a pandemic, but a combination of outstanding bureaucratic and political leadership, combined with the institutional gift of a unitary state operating in a national health system, made the difference.

Health inequalities are not set in stone! New Zealand has an indigenous minority of 15%, it has the usual socio-economic disparities, 40% of its major city Auckland are foreign born, and yet COVID did not disproportionately strike the disadvantaged. The disease has come to the country courtesy of returning and travelling nationals predominantly white and relatively affluent, and these have been quarantined at the border. This, together with the first country-wide lockdown, prevented spread to other communities.

This is a disease of the digital not the analogue era! Communications moved to the virtual world. People worked from home. The health and educational systems ramped up their digital outreach. And social media played a major role in shaping patterns of behaviour, for both good and ill.

The health system underwent a once-in-a-century stress test! Death rates dropped over lockdown, hospital admissions and emergency department attendances dropped to half normal levels, family doctors closed because patient copayments disappeared, there was no winter flu season, all-cause mortality fell, and IT initiatives that had been hanging fire for years were suddenly implemented.

Experts and expertise are for a time in vogue! Yes, we had and still have conspiracy theories circulating, but the mass media have shown professionalism by and large, and talk of “post-truth” realities, “fake news” and the multiple realities of a post-modern world have been parked while we sit out and work our way through what in many respects is an existential crisis. The contrarians, opinion writers and commentators are already back, but “experts” are still listened to and expertise is valued.

One of the most remarkable outcomes is a nationwide rallying in the recent general election behind the ruling Labour Party, which achieved 50% popular support in our proportional representation system, comparable to levels reached in the 1930s. But it is unclear whether that rally will translate into a “New Deal”-style transformative move on a range of pressing issues such as climate change and energy, poverty and inequality, economic reset, and affordable housing. The roads are full again, house prices are soaring, the primary sector continues to earn our keep, and in many respects the prospects after effective vaccination are for a return to “business as usual”- not just in social life, not just in the economy, but in the health ecosystem too.

Peter Davis

Emeritus Professor in Population Health and Social Science

University of Auckland, New Zealand

Think tanks are leading the way as political parties play it safe

Helen Clark talks about drug use

OPINION: We are living in unprecedented times with a pandemic of global proportions. For many commentators, this is seen as an opportunity to think “outside the box” about the future direction of our society and economy, and our general election seemed as good a place to start as any. Yet it threw up few new ideas, as both major parties played safe and protected their respective electoral territories. 

If the major parties cannot be relied on to bring big new ideas to the table, who can? The minor parties can make a substantive contribution. For example, under the previous government NZ First promoted the Billion Trees scheme and the Provincial Growth Fund, while the Greens advanced the Climate Change Commission and a series of related environmental and climate initiatives. 

What about the public service? It works within an environment that is constitutionally and politically constrained, responding to the programme of the government of the day and to the policy demands of major events, so there may be few sources of innovation here. 

Another option is think tanks, which are research-based policy and advocacy institutes that form a transmission belt between academia and politics. A recent newsletter of the Institute of Public Administration New Zealand (IPANZ) argues that think tanks can bring a range of perspectives and advice to governments, introducing new ideas and provoking public debate. 

Another option is think tanks, which are research-based policy and advocacy institutes that form a transmission belt between academia and politics. A recent newsletter of the Institute of Public Administration New Zealand (IPANZ) argues that think tanks can bring a range of perspectives and advice to governments, introducing new ideas and provoking public debate.

Have our think tanks risen to the occasion? The corporate-funded New Zealand Initiative (NZI) recently published its “Roadmap to Recovery. Briefing to the Incoming Government”.

From this perspective, the pandemic is seen not so much as an opportunity to think differently about our policy settings, but rather as a chance to re-energise a traditional model of low taxes, deregulated labour markets (“laws that stop adults from selling their labour for a low wage … are egregious”), limited government and regulation, greater inward foreign investment, reliance on market mechanisms for climate change action and other environmental concerns, reining in the Reserve Bank, and a return to basics in the educational system.

If the NZI’s prescription might be seen as something of a “back to a pre-pandemic future”, we at The Helen Clark Foundation (THCF) foresee a chance to rebuild New Zealand into a more equitable society, seeing the pandemic as a policy opportunity, rather than just as a fiscal and economic danger. To date we have released three reports in our “post-pandemic futures” series.

These take specific challenges facing us post-pandemic – loneliness, climate change and NZ’s low wage economy – and propose bold solutions to tackle them. Most recently, together with our partner the New Zealand Institute of Economic Research (NZIER), we have been at the forefront of public debate over the economic impact of minimum wage rises, arguing for their value as a tool to both address inequality and drive productivity.

A third perspective is provided by the University of Auckland’s Centre for Informed Futures with its “New Zealand’s Economic Future: Covid-19 as a Catalyst for Innovation”. It sees opportunities in a knowledge economy through research and development, and education, and making Auckland a globally competitive hub. It tackles issues to do with tax (carbon, land) and the encouragement of multinational corporations. It also envisages a role for central government in co-ordinating across sectors and actors.

Between them, three of New Zealand’s leading think tanks have responded to the challenge of the pandemic with a range of perspectives and ideas on possible directions for our society. As the newsletter from IPANZ states: “The public service and the Government can benefit from ideas emanating from independent bodies.” On the evidence of the policy response of these think tanks to the pandemic, that function seems to be fulfilled.

There are still questions as to the funding, purpose, “bias”, and research prowess of think tanks. For example, IPANZ asks whether we need more think tanks, how that might be achieved, how they might be funded, and how to deal with the quality of their research and the impact of their bias.

This is why, at THCF, we have no formal relationship with any political party, rely a lot on memberships, and why donations and partnerships need to meet strict oversight criteria supervised by the board of trustees, including final signoff on any research report after extensive independent peer review.

In other parts of the world, while think tanks have initially encouraged an outpouring and pluralisation of ideas, critiques and solutions, they can also end up solidifying the hold of pre-existing ideological positions and powerful interests. So, we need to advance – but also tread with care.

Peter Davis is chair of the board of trustees for The Helen Clark Foundation.

Published on STUFF, 23rd December 2020

Advice to the Incoming Minister of Health

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      

Published in The New Zealand Herald, 20th October 2020       

What we can all learn from the Auckland outbreak

Very unfortunate and troubling though it has been for all concerned, in retrospect the Auckland outbreak has been a salutary experience from which everyone can learn something.

The commentariat have been working off our first wave. But the cases then seemed to involve for the most part youngish and healthy middle-aged, middle class, travelling Pakeha and their networks, and was thwarted by a complete lockdown. Now we have a very different “demographic” affected, including multi-generational households, people gathering in churches and on public transport, and with more at-risk health profiles and poorer access to health services. This is the mix that has fomented so much of the spread internationally. The commentariat need to re-calibrate accordingly.

The Government has been tip-toeing around issues of public consent. Yes, it has been “following the science”, but it has also had to take the public with it. Can you charge people for their quarantine? Can you require pre-departure virus tests as some airlines and countries already do? Can you require border workers to take regular tests? Can you stop nurses moonlighting between border and hospital employment? Can you require masking in confined spaces and on public transport? In contrast to the firmness and rigour of the first lockdown, all these have had to be negotiated in real time. This outbreak provides an opportunity to resolve many of these issues of public consent.

The Auckland outbreak has demonstrated that our laboratory testing and contact tracing systems are now up to scratch. But, If any further evidence was needed on the balkanised nature of our health system, then this outbreak has provided it; we have a system in which there is a policy health ministry in Wellington, there are 20 DHBs normally focused on hospitals rather than broader health considerations, we have family doctors and corporate primary care usually driven by their local business models, and we have under-resourced public health units. Under circumstances of crisis these different segments unite and rise magnificently to the occasion – as they did with the first outbreak under lockdown – but in the present circumstances the operational weaknesses of the system are revealed, particularly the threadbare IT systems that are barely interoperable, are sometimes no longer supported by the vendor, and are often on the verge of collapse.

It goes without saying that the health system endured nine years of “soft austerity” as the system was treading water while easy and discreet cost savings were quietly stripped out of it. That said, the system has always placed higher priority on hospital staff, beds, and bricks and mortar, and IT systems have been left to languish. For example, the National Immunisation Register is said to be on its last legs. Furthermore, the broader register of which it is part has an “opt on” system over the age of six, which means those in the community most in need of scrutiny and help are often least likely to be in touch with the outreach potential of such a register of record. Also, a good five per cent of the population is not even registered with any family doctor. Furthermore, while we have a unique national health identification (NHI) number, there are duplicates, NHI details held by different parts of our system are not routinely updated and reconciled, mobile phone numbers are not routinely entered, and lesser trained personnel at the border were having difficulties dealing with finding and determining NHI numbers, despite the fact that a name, a date of birth and gender should give you almost all you want t identify an NHI (at least for people who have been allocated one).

This outbreak has also been a “wake-up call” for our public service beyond the health system. For all the talk of an all-of-government approach, somewhere something went wrong in the chain of command and among the silos of different parts of the bureaucracy such that an apparent edict from Cabinet was not fully implemented, despite reassurances. It was said that in ancient times the orders of the Emperor might never go beyond the palace gates, and certainly no further than the boundaries of the surrounding city. It appears that this may apply to the modern New Zealand public service, albeit under conditions of an unprecedented crisis with multiple system changes and many moving parts. At the very least the State Services Commissioner should be initiating his own inquiry into the capacity of the system since much can be learned for future improvement from the successes and failures under these conditions of duress.

Finally, unfortunate as it might have been, this has been an outbreak that was, in retrospect, predictable, but one from which we must learn very fast as it will not be the last, even with the best systems in place. We had got complacent. We rejoiced in a return to our old freedoms. The public needs further guidance, so that we can return to a “new normal” that takes into account the new sense of alertness and urgency we need to have, while also getting back to as normal a life as is possible during a global pandemic. We also need to have those discussions about how we can manage around this virus for the forseeable future, how our public services can adapt and respond better, and how our economy can flourish and be more resilient and effectively future-proofed for a very different world.

Peter Davis

Elected Member, Auckland District Health Board

Emeritus Professor in Population Health and Social Science, University of Auckland 

Published in The New Zealand Herald, 31st August 2020     


Invitation to Policy, the guide to Election 2020

I’m writing to invite you to try Policy, the complete guide to Election 2020, now online at

We thought you might be interested because you took part in our 2019 local elections tool Policy Local, as a candidate for the Auckland DHB election.

Policy makes voting easy: all the policies, parties and candidates, all in one place. 

→ See where the parties stand on key issues
→ Learn more about the candidates running in your area: 
→ Save the policies you like most, and view policies without party labels to browse free from bias
→ Share policies and candidates with friends and family 

We’ve summarised 900+ policies from 550+ documents and speeches, and surveyed 500+ candidates across every electorate. We’ve also launched resources for teachers and schools and a policy idea competition for students.

Please consider sharing Policy with your friends and family: research from the Electoral Commission shows that one in three non-voters cite ‘not knowing who to vote for’ as their main reason for not voting.

You can also follow us on FacebookInstagram and Twitter to stay up to date.

Ngā mihi,

Peter Davis

Health Post-Pandemic: Necessity the mother of intervention?

In August 2019 the panel of the Health and Disability System Review (HDSR, 2019), chaired by Heather Simpson, published its 300-page interim report. For anybody familiar with the sector, the report confirmed much of what we already knew; that is, while the New Zealand system performs adequately by international comparison, it is overly complex and lacks national coherence, its performance is not well monitored and enhanced, primary care and population health lag, digital technologies are underdeveloped and at odds with each other, there is a lack of responsiveness to Maori and Pacifika, and, overall, the system needs “future proofing”. Perhaps surprisingly, pandemic preparedness was not an item of note, despite a recent international report placing New Zealand’s “health security” index score for public health emergencies well below international norms for a developed country (Boyd et al., 2019). 

The pandemic has provided the ultimate stress test of the New Zealand health system and, true to form, we “muddled through”, despite limited resources and a barebones pandemic system, to a brilliant “just in time” success with a mixture of luck (a small island state coming late to the crisis), outstanding political and bureaucratic leadership, sound if thin fundamentals, independent academic voices, superb professionalism on the ground in the DHBs particularly from the General Practice (GP) community, a touch of New Zealand ingenuity and improvisation, and strong public support.

In many respects the pandemic confirmed known weaknesses in the system, but it also facilitated a number of useful responses and forced some long-overdue operational changes which have the potential to form the basis of new, more productive and equitable ways of working.


We rediscovered the centre. Aside from some minor missteps that were predictable in these rushed and unprecedent circumstances, daily we were witness to a coherent all-of-government approach that presented a strategic and operational presence in the health system that we had all but forgotten existed. May that sense of overall strategic direction and coordination continue.

Yet, for all the strategic and policy strength evident at the centre, the operational level demonstrated how far our decentralised health system has taken us towards quite a radical localism in the health system. Thus, the Minister and the Director-General were somewhat embarrassed in the early days of the pandemic when, under questioning from the media and the Opposition, they could just not come up with an exact figure for the number of ventilators in the country. Similarly, part of the tardiness in providing essential public health information such as testing and contact-tracing results was down to the decentralised nature of local public health units that were not necessarily technically equipped or managerially oriented to assist the Ministry with collating national figures in real time.

To balance this view from the centre, the experience I had as a DHB member in Auckland over the pandemic was that we were prompted to re-energise a regional community of interest. There has long been a formal cooperative working and planning arrangement among the three Auckland metro DHBs and Northland. Under pandemic conditions this has necessarily been energised and strengthened to an unprecedented level. If the HDSR were to go down the path of organisational rationalisation, one could envisage the emergence of a number (say, 4-6) regional networks around the country, of which the Auckland metro DHBs and Northland would be one fully-operational working example. With these regional operational entities in place, together with a strengthened policy and strategy centre with effective implementation, we might just be getting the balance right for an effective structural reconfiguration of the health sector. 

Enabling Technology

One of the more depressing chapters in the HDSR report was the one outlining the failures and frailties of New Zealand’s health data and digital system, an essential enabling infrastructure for a high-performing healthcare system. Among the issues canvassed were: the failure to use the National Health Index (NHI) to its full potential, the lack of integration and operability across different data and information systems, the multiple customised applications and “work  arounds”, the great number of small and competing vendors providing IT solutions and services, the technical silos between and within 20 DHBs, and, above all, the lack of consistent leadership and the failure to implement key strategic plans and opportunities over the last 20 years.   

We have been waiting for these enabling technologies to deliver on their promise in New Zealand, and it looks as though the pandemic may finally force the pace of change and uptake to meet its full potential. While the patterns are evident in New Zealand, a lot of the evidence comes from the United Kingdom (UK) where the ratio of face-to-face to virtual consultations in general practice has flipped from about 75:25 to the reverse (RCGP, 2020). Furthermore, family doctors there have been asked to move to a triage-first model of care and the UK government is purchasing online triage tools for those without. In addition, 11 digital health suppliers have been selected to provide online primary care consultations. It has also been estimated that these techniques could reduce face-to-face hospital outpatient visits by a third (Reed, 2019). There is even an Australian platform to achieve flexibility in outpatient visits called Attend Anywhere. It is being implemented in the UK (Rapson, 2020). 

Funding Family Doctors

One genuine surprise in the wake of the pandemic was the news that family doctors were doing it tough as patients stayed away and virtual consultations were hard to charge for, with GPs laying off staff (including about 30 GPs closing their practices in Auckland). These are highly unusual circumstances, but it does highlight the one remaining major weakness in our health system – the lack of a long-term funding model for general practice. We are almost alone, along with the US and Ireland, in our dependence on patient out-of-pocket payments. Such has been the pressure that many practices have been facing insolvency and a good number are being bought out by corporates. We are in danger of seeing a shift from a professional, albeit small-business, model of primary care to one that may well become corporate-driven with stronger commercial imperatives. 

We should extend ACC to cover non-accident cases in primary care, similar to what Australia did via a levy back in the 1970s. Eighty per cent of doctors there accept the system, and care is free for their patients. We could boost our capitation system and incentivise family doctors to keep people out of hospital. In an ideal world we would do much more to shift our funding systems from a reliance on a narrowly-based and fiercely-contested tax system to a much more broadly-based social insurance scheme. 

A positive outcome of the pandemic in the Auckland region has been the ability of family doctors to work well in networks. While there are some larger practices, many are small – even solo – and could be unviable on their own in circumstances out of the routine (e.g. equipment, after-hours care, staff sickness, support staff). The UK is introducing primary health networks to service populations of about 50,000 (Murray, 2019). We should do something similar with, say, PHSOs, primary health and social care organisations, which would be enhanced practice networks the principal objective of which would be to nurture the health, well-being and social care needs of their designated practice populations and keeping them out of hospital.

Privacy Issues

One of the knotty issues brought to the fore by the pandemic has been rights of access to personal and patient details in the course of combatting COVID-19. The privacy commissioner has been involved.

Our National Health Index (NHI) number is a jewel in the crown of our health infrastructure, and yet we are hampered in our use of it due to privacy issues. In the context of the pandemic Northland DBH, along with PHOs, was using the NHI to target vulnerable populations for flu vaccination. We need more of this, if we can get these issues resolved. This would allow us to ensure the comprehensive nature of enrolment with family doctors and the related capitation, call-back, screening and outreach systems, ensuring that disadvantaged groups are well represented in proportion to their numbers in the population.

Hospital Capacity

It was striking that, in conditions of the pandemic emergency, we could reduce inpatient hospital occupancy rates from the usual 95% and over on weekdays to the week-end rate of 50% – and also free up our intensive care beds. This is heroic and marvellous, and, although a lot of this was due to deferred elective care and delayed patient presentation, it also suggests that we could be a lot smarter about the way we use these scarce resources in normal times, and maintain our current international benchmarks rather than building more beds.

For example, the UK Faculty of Emergency Medicine, has argued that the pandemic was a sign that we could do without relying on hospital Emergency Departments as backstops to failures in the primary care and community-based care systems. Ambulance crews and other first responders should be able to triage requests for help so that only the acutely unwell and those for whom time-critical care was required are delivered to hospital (RCEM, 2020). 

Recently Auckland was offered substantial capital funding for the Children’s hospital, and yet 30% of admissions among the under-fives are treatable at the community level. Furthermore, the scheme to fund doctors to treat cases that might otherwise be hospitalised could be developed further. Add to this the much higher proportion of procedures that could be performed on a day-stay basis and the striking fact that nearly 20% of hospital bed days can be accounted for by preventable treatment errors in a small fraction of patients, and you can see the potential for greater efficiency and demand reduction. 

We need to become less reliant on costly hospital structures, and move to a model that can provide the same services – but “closer to home”, at the level of family doctor, health centre, and other services that are intermediate between hospital and community. An unexpected example of this has been the reported greater number of home births. Despite New Zealand having community-based midwives, births still remain firmly hospital-based. Could the pandemic encourage a rethink here? Also “Hospital in the Home” is another viable option that merits much greater development (Hensher et al., 2020)

This approach to less of a hospital focus is already working overseas. For example, Denmark – a country of a similar population size – has reduced the number of hospitals over the last 20 years from 98 to 32. This involved moving to a greatly-expanded primary care system (Margo, 2019). Another example: the United Kingdom’s NHS uses over 3 times the number of acute hospital bed days for over 65s compared to the Kaiser Permanente in the US, a large non-profit, primary care-led organization that uses active clinical management by cooperating specialists and primary care doctors (Ham et al., 2003).

Scope of Practice

With the sudden pressure on existing staff, DHBs have been seeking temporary extensions to individual scopes of practice under the Health Practitioners Competence Assurance Act to allow greater flexibility of deployment under these extreme conditions. Can we continue this search for flexibility of practice? This should apply not just in hospitals but in primary care as well.

One of the most surprising things to learn in my brief time on the Auckland DHB is how the staff shortages that are hampering normal business are not among nurses and doctors (although those exist), but among technicians. There is a multiplicity of these and they all have their own fiefdoms of training and practice that are hard to change, that can block recruitment from overseas, and in many instances are hard to justify. On top of that we have been dogged by industrial action among these groups. This can be crippling.

Performance and quality, including the aged care sector

The aged care sector needs a thorough review. The DHBs have very limited powers to check the quality of care in this sector. Furthermore, families have very little objective quality of care information to go on in deciding where to place an elderly relative.

More broadly, one might advocate for some authority to publish public information about the quality and performance of all our publicly-funded health care agencies. We just do not have adequate public information about how well our health care delivery system is performing, including the efficiency of its operations, the effectiveness and quality of it work, and its impact on equity (Davis et al., 2013). No public agency has this task. Perhaps the remit of the Health Quality and Safety Commission could be broadened so that patients and taxpayers could be better served with some key, internationally-benchmarked performance indicators? 

Public Health and Health Inequalities 

You don’t miss public health – until you miss it! The country was very fortunate that it has a stellar public health professional leading the Ministry of Health. This in part makes up for the erosion of key infrastructure and its radically localised nature under our existing DHB structure. This is quite aside from dealing with the coming epidemics of diabetes and obesity.  

One of the most positive outcomes to the pandemic has been the failure of ethnic and socio-economic inequalities to emerge in the way they have in other countries such as the US and the UK (although the health circumstances of these groups were likely set back by the pandemic). Disadvantaged ethnic minority and lower socio-economic groups were not disproportionately infected by COVID-19 in New Zealand. The disease was brought to this country by members of the public travelling internationally. These tended to be younger, more affluent, and predominantly pakeha. Indeed, pakeha contributed 70% of all reported infections, matching their proportion in the population, and the virus clusters identified by the Ministry of Health largely represented ethnic and socio-economic networks related to this original, source group (except for the largest cluster at Auckland’s Marist school, an institution with a large Pacifika and Maori enrolment). Putting aside the unusual nature of a predominantly infectious disease epidemic, what this suggests is that inequalities of ethnicity and socio-economic status while stable and enduring are not “carved in stone” and can be modified if we are able to shield institutional and dense populations, and reduce differentials in exposure to health risks and in access to care as we move quickly to provide preventive, curative and rehabilitative services according to need. 

Conclusion – why did it need a crisis?

Many of the changes prompted by the pandemic and outlined here as possible ways to the future in the health system have long been championed by independent observers. But the need has never been sufficiently acute to overcome professional inertia, the short-term policy horizons imposed by the electoral cycle, political timidity, weaknesses in strategic direction and effective change, the radical localism of the current DHB system, and the usual “push and pull” of powerful special interests and public sentiments that dominate the everyday politics of health care in New Zealand. Perhaps this time will be different and we will see some worthwhile changes in practices and policy.

One evident weakness in the sector has been the lack of analytical capability (including any epidemic modelling in humans). At one time the Department of Health (as it then was) hosted the Management Services and Research Unit which did essential analytical and planning work for the sector. This unit was disbanded while governments experimented, first, with the forces of the market and business acumen in the 1990s and, then, with local democratic accountability and professional leadership in the 2000s. We have inherited some useful tools from those earlier periods of experimentation, including cost-utility analysis used at PHARMAC to evaluate new drugs, Clinical Priority Assessment Criteria (CPAC) to guide clinical decision-making, and WIESNZ, the cost weight methodology for hospital case-mix funding. Yet, for all that, our analytical, planning and management capabilities could still be better.

Take the UK for example. In the wake of the pandemic three major health policy charities – The King’s Fund, The Nuffield Trust, and The Health Foundation – have formed an analytical collaborative to work with the National Health Service (NHS) on providing analytical and planning expertise (Strategy Unit, 2020). We have nothing to compare in New Zealand, particularly since the Health Research Council shifted the funding goalposts in such a way as to make large-scale independent, non-clinical health systems and policy research almost impossible to undertake.   

In the last year our health care system has had to deal with a series of external shocks – the dead and wounded from the Mosque attack, the horrific burns from White Island, and now COVID-19. The system has shown remarkable resilience and responded brilliantly. And then it has returned to BAU (Business as Usual). This time, with a recently completed review of the system, can we take on some of the lessons learned from new ways of working and responding, and apply them to thoroughly future-proof our healthcare arrangements?

*This paper draws substantially on a number of newspaper opinion pieces I have published over the last year in The Dominion-Post and The New Zealand Herald. I wish to thank Phil Hider, Tony O’Connor, Thomas Lumley and Sue Wells for comments on an earlier draft of this paper.


Strategy Unit (2020). Analytical collaboration for COVID-19 (2020). The Strategy Unit, NHS.

Boyd, M., Baker, M. and Wilson, N. (2019). New Zealand’s poor pandemic preparedness according to the Global Health Security Index. Public Health Expert, University of Otago. 11 November 2019.

Davis, P., Milne, B., Parker, K. et al. (2013). Efficiency, effectiveness, equity (E3). Evaluating hospital performance in three dimensions. Health Policy, 112: 19-27.

Ham, C., York, N., Sutch, S. and Shaw, R. (2003). Hospital bed utilisation in the NHS, Kaiser Permanente, and the US Medicare programme: analysis of routine data. British Medical Journal, 327: 1257.

The Health and Disability System Review (HDSR) (2019). Health and Disability System Review – Interim Report. Wellington: HDSR.

Hensher, M., Rasmussen, B. and Duke, M. (2020) The ‘hospital in the home’ revolution has been stalled by COVID-19. But it’s still a good idea. The Conversation 18 May 2020.

Margo, J. (2019). Why Denmark is reducing hospitals while we are building more. Australian Financial Review 19 February 2019.

Murray, R. (2019) Primary care networks and the NHS long-term plan. The King’s Fund 3 April 2019.

Rapson, J. (2020). Covid sparks boom in digital hospital outpatient appointments. Health Services Journal 11 May 2020., S. (2019). What will it take to transform outpatient care?. The Health Foundation.

Royal College of Emergency Medicine (RCEM) (2020). COVID-19: Resetting Emergency Department Care. RCEM Position Statement.

Royal College of General Practitioners (RCGP) (2020). Around 7 in 10 patients now receive GP care remotely. RCGP Press Office.

Strategy Unit (2020). Analytical collaboration for COVID-19. The Strategy Unit, NHS.

Peter Davis, Emeritus Professor in Population Health and Social Science, University of Auckland, and Elected Member, Auckland District Health Board

Published in Policy Quarterly, August 2020

The Health System Review. An Opportunity for Auckland.

Photo: Doug Sherring

The Health and Disability System Review (known as the “Simpson” Report after the chair, Heather Simpson) was recently published. It draws substantially on submissions from the sector and has been a couple of the years in the making. It is the most substantial review of the sector for about 30 years. 

The “Simpson” report has made little impact in Auckland, yet in many respects it presents an opportunity for the region. Firstly, the pandemic has forced health services in the region to operate in novel and more coordinated ways. There is an openness to change. Secondly, the region has flourished as a single “super city” for a decade now. There could be synergies with this structure. Thirdly, primary and community health services are becoming increasingly stretched for Auckland’s lower socio-economic and ethnic minority communities. A combination of health risks – obesity, poor housing, insecure employment and so on – together with inadequate health infrastructure and the incursion of barebones and semi-predatory practice operators means that the most disadvantaged are also in danger of receiving sub-optimal care in the community with the hospital sector picking up the pieces. On these three grounds Auckland stands out as being the one major area in the country that could make the most of the “window of opportunity” offered by the “Simpson” report.  

But what are the major recommendations of the report – and are they likely to be implemented?

Its major recommendations, that are likely to be implemented in one form or another, are:

  • A new crown entity, Health New Zealand, for central co-ordinating, initiating and planning.
  • A Maori Health Authority that has an advisory, planning and advocacy function associated with the Ministry of Health, but without a separate health system budget. 
  • Fewer DHBs, without elected members. 
  • Networks: local primary and community health organisations, hospitals and specialist services.  
  • A recognition of the need for monitoring and enforcing efficiency and effectiveness in the performance of hospital and related services.
  • An encouragement to workforce development and training to move towards a competency-based approach to regulation rather than a profession-based focus. 
  • A data-driven, digitally-enabled ecosystem. 
  • Improvements to the management of asset and capital expenditure and planning. 

It is hard to disagree with any of these proposals, and the pandemic has brought their necessity into sharp relief. But how will they affect Auckland? What potential is there in the report to enable Auckland to try something more clearly tailored to its requirements as a regional health system?

Firstly, there is the impact of the pandemic that has forged the makings of a regional system.

Second, the ten-year existence of a single city, Auckland Council which has within it 21 ready-made communities of interest of 85,000 each that could provide the basis for primary and social care practice networks and community input. As with the Council, these could provide the “step down” from a single regional health authority. There is also the potential for the Council’s regulatory functions in health-related areas to find synergies with the otherwise free-standing Auckland Regional Public Health Service. 

Finally, the primary care system in the region is on a cusp with the middle class enjoying high-quality services but low-income and other disadvantaged populations increasingly dealing with barebones corporate and other practices that are struggling financially and professionally to provide adequate levels of care for these otherwise poorly-served groups. Indeed, in the recent pandemic thirty general practices just shut up shop. What other anchor medical specialty dealing with 90 per cent of patient encounters would find itself in this predicament? Quite aside from the sub-optimal service received by these groups, the DHB essentially acts as a provider of last resort through avoidable hospitalisations and late presentations for acute and emergency care because the first line of defence is simply not working well enough. On top of this add a growing and ageing population, chronic illness, and multi-morbidity.

Essentially primary and community care needs to move to a regional system of “health maintenance”, the function of which would be to work closely with specialists and social agencies to keep people out of hospital. This would require a transformation of existing umbrella organisations to a single regional commissioning and active management entity based on a model of leveraged primary care, like the Kaiser Permanente in the United States. Family doctors would need to be recognized as a core specialty with matching salaries, and require physician assistants, and work with multidisciplinary teams.  

This is the potential for the region. In other words, the “Simpson” Report is best seen as a starting point for what could be a process of intelligent, long-term reform that could gain bipartisan and stakeholder support. It is a window of opportunity that Auckland should use to the full.

Peter Davis, Emeritus Professor of Population Health and Social Science, University of Auckland, and elected member, Auckland District Health Board.

Published in The New Zealand Herald, 5th July 2020

The “Simpson” Report: Cautious steps towards a national health system?

This article appeared on on the 17th of June 2020.

The “Simpson” Report: Cautious steps towards a national health system?

The last time we had a review as comprehensive as the “Simpson” Report (Health and Disability System Review) was in the early 1990s with the so-called “Green and White Paper” which was an ambitious, centrally-driven reform process which left its mark in a more business-like approach to managing health care and the establishment of PHARMAC. Little else survived.

With the “Simpson” Report we have a document that draws substantially on submissions from the sector, that has been a couple of the years in the making, and that sets the stage either for a cautious realignment of our current system or a much more far-reaching set of reforms that, with leadership and sector buy-in, could have long-lasting consequences.

What are the major “probable” innovations? 

  • A new crown entity, Health New Zealand, is mooted as a central co-ordinating, initiating and planning body that fills the gap of an operational function that the Ministry of Health, as a policy ministry, was not established to perform.
  • A Maori Health Authority that has an advisory, planning and advocacy function associated with the Ministry of Health, but without a separate health system budget. 
  • Fewer DHBs, without elected members. 
  • Networks – of local primary and community health organisations (so-called Tier 1), and of hospitals and specialist services (so-called Tier 2).  
  • An emphasis on equity, yes of course, but also a commitment to monitoring and enforcing efficiency and effectiveness in the performance of hospital and related services. At present we simply do not have the indicators and benchmarks in place to perform this well.

What are some of the “possible” innovations?

  • An encouragement in workforce development and training to move towards a competency-based approach to regulation rather than a profession-based focus. As the wording of the report suggests, this will be hard to achieve, but I am aware in my role as a DHB member that we are constantly frustrated by demarcation disputes and an inability to work flexibly in many domains.
  • PHOs are not encouraged. In many instances it is hard to see what value PHOs add. In Auckland several new PHOs were formed, the function and utility of which it is hard to fathom. PHOs add another layer of complexity that at present does not help us organize primary and community care effectively, particularly where there are competing corporate interests.
  • The report tip-toes around the issue of the privacy obstacles to the use of New Zealand’s unique National Health Index for bona fide public interest purposes (screening and enrollment among others). If a full-blooded panel cannot insist on this flexibility, who else can?
  • A data-driven, digitally-enabled ecosystem. We have wasted a good twenty years and we still have competing systems not only across DHBs but within them too. One of the problems in the response to COVID-19 was the inability of data systems to talk to each other and collate information.

What remain some of the problem areas?

  • Primary care, general practice. In the recent COVID experience in Auckland alone thirty general practices just shut up shop. In Auckland we also have corporate practices driving barebones primary care for low-income populations. In such circumstances ethical, professional primary care practice can simply not survive. The report talks much of primary and community care, but at the heart of it is a big hole in funding. In the United Kingdom primary care is seen in many ways as the driver of the system, with high professional prestige and associated state funding, but not in New Zealand.
  • Regional entities. These could be another layer, or a useful grouping of networks. Unclear.
  • Health outcomes. The DHBs are to tackle health outcomes. But health outcomes are largely determined by factors outside the health sector. A delivery system can probably make a difference to about 30% of life expectancy and maybe 50% of heath expectancy. We need to be realistic about what the delivery system can do, and hold it to account accordingly.
  • Population health as a driver. The report emphasises population health as the driver of the system. But from my experience the system is not population focused, and never can be, because the hospitals are so dominant. The bulk of DHB staff work in hospitals and most of the DHB’s budget funds hospital work. This is in turn is driven by everyday activity arising from the needs of the population.
  • Population health as a social policy. The major determinants of population health lie outside the health system. And the major initiatives required to advance the health of the public have to be politically driven – such as social housing, tackling the industries that foster our obesity epidemic, clean water, and so on. New structures will not solve this, only political will.
  • Hospital focus. The DHBs are dominated by their hospital focus. As an elected member 90% of my time is spent on matters to do with the hospital sector. This cannot be wished away. There needs to be serious attention to home-based care, reducing admissions, ambulatory alternatives, specialist outreach to prevent admissions and so on. 
  • The funding recommendations in the report are not convincing, for me anyway. Ringfencing for non-hospital services? This has never worked, for the simple reasons that saving lives in an acute setting will always trump the more prosaic work in the community. No mention is made of how to make primary care financially viable for the long term. I still think the Woodhouse report that established ACC should be dusted off and revisited. It argued for an ACC-style social insurance system not just for injury, but for illness as well. 

The “Simpson” Report is best seen as a starting point for what could be a process of intelligent, long-term reform that could gain bipartisan and stakeholder support. These are cautious steps towards the national health system that a population of just five million surely deserves.

Peter Davis, Emeritus Professor of Population Health and Social Science, University of Auckland, and elected member, Auckland District Health Board

Published onStuff, 17th of June 2020