Dealing with the health effects of our harmful consumption patterns

New Zealand, like other affluent societies, is suffering the health consequences of our harmful consumption patterns. Thus, a recent report from Diabetes New Zealand shows that nearly 5% of the population suffers from diabetes and close to 20% are at a pre-diabetic stage. These numbers are likely to double over the next 20 years, with associated heath costs rising to nearly 10% of GDP and a quarter of Pacifika people suffering from the condition. The rising level of obesity, and our consumption patterns particularly sugar, lie behind these trends.

On the face of it, our system is not well geared to dealing effectively with this emerging health scenario; not only are we failing to make a sufficiently determined attempt to arrest or slow down this apparently inexorable rise in illness and disability associated with our harmful consumption patterns, but also, as the request for funding from the Diabetes New Zealand report shows, we are up for some major costs, and these will have to compete with many other demands on the taxpayer’s dollar. We see this every day at the Auckland District Health Board.

However, there is one feature of our system that is ripe for development and adaptation in dealing with these issues, and that is the Accident Compensation Corporation (ACC).

ACC is coming up to its 50th. anniversary. It is a social insurance scheme built on the insight that injury sustained at work – later extended to other areas of life – was a cost of employment inflicted on workers in industries such as forestry, farming, manufacturing, and construction, the burden of which they had to bear, rather than the industries that employed them. This was seen as unjust. It also provided no incentive for industries to improve their injury track record. Out of these key insights was born our current ACC levy and compensation system which attempts to cover the costs associated with injury, whether suffered at work or elsewhere.

Since the time of ACC’s founding the great change in the health profile of developed (and even developing) countries has been the shift from infectious diseases to conditions largely associated with our way of life, such as cancer, heart disease and stroke, and diabetes. These are in major part associated with our lifestyle, which includes the consumption of a range of potentially harmful products such as alcohol and tobacco and items containing sugar, salt, and saturated fat.

While these consumption patterns are obviously enjoyable and to an extent willingly engaged in, they are also encouraged and promoted by the industries that profit from them. In other words, as with ACC 50 years ago, the food and beverage industries are, through the promotion of consumption lifestyles, laying a major burden of harm on the community by way of illness, disability and premature death, a burden that is not internalized into the cost structure of these industries but is instead carried by the taxpayer through the health system.

It would be perfectly possible to extend the ACC levy system from industry-specific injury risk profiles to risk profiles for different illnesses like diabetes, both to fund the treatment arising from these consumption patterns, and to help modify them by incorporating the real costs of community harm in the prices of these products. As with the current ACC system, this would perform a double duty: it would cover treatment costs for illness, and also help reduce the health impacts of these harmful features in our consumption patterns.

But there are possible downsides. For example, the most disadvantaged sections of the population, as represented in the bottom 20-40 percent of the socio-economic distributions, are likely to be consuming more harmful products, and those products are likely to be a higher proportion of their disposable income than for higher-income people. Thus, any levy on these products could be seen as regressive in its impact. However, there are alternative less harmful products, and lower-income people are more likely to switch because they would be more susceptible to the income effects of levies on these products; in other words, they would be less able to afford these products and would in time switch to cheaper equivalents that escaped the impost.

And levies on harmful products do not necessarily rebound to the disadvantage of manufacturers either. The British government imposed a sugar tax on beverages in the United Kingdom. A recent review of this initiative in the British Medical Journal shows that, while sugar consumption declined by ten per cent, volumes of sales did not, since manufacturers reduced the sugar content of their products rather than suffer a downturn in sales.

As with ACC in its current format, this extension could work for all stakeholders. Above all, we might at last deal with a feature of our lifestyle that, on its present trajectory, could in future generations roll back many of the great gains in health we have achieved over the last century.

Peter Davis

Elected member, Auckland District Health Board, and Emeritus Professor of Population Health and Social Science, University of Auckland

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

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.

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.

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     

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, Monday 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

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Ngā mihi,

Peter Davis

The Health System Review. An Opportunity for Auckland.

Photo: Doug Sherring

This article was published in NZ Herald on 6th of July under the title, ‘Auckland must seize health opportunity report presents’.

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.

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