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What can we learn from New Zealand on health reform?

While Australia has taken many years to get moving on national health reform, New Zealand has already been there.

What can we learn from the NZ experience?

Geoff Simmons is an economist and co-author of a new book, Health Cheque: the truth we should all know about New Zealand’s public health system, which sounds like worthwhile reading for those with an interest in health reform generally. (Croakey has just ordered her copy from here).

He was the keynote speaker at a recent Australian Institute of Health and Welfare conference in Canberra, and was surprised to hear that many of the problems facing the Australian health system sounded very familiar.

He has written this piece to give Croakey readers a sense of the challenges facing the NZ health system, despite more than a decade of reform, and also offers a few words of warning.

He writes:

“After spending a year looking at the New Zealand health system, I understood that money wasn’t the answer. With a different culture of healthcare there are plenty of things we could do that cost very little for a big health benefit, and there are plenty of ways to do what we already do more cheaply and efficiently. There are also probably plenty of luxuries that we fund which in the long run we won’t be able to afford.

Still, more money couldn’t hurt, right? Particularly in poor little cash strapped New Zealand which can barely keep up with the salaries offered by our much wealthier neighbour.

I have to say I was shocked by the debate in Australia. Time and time again the same issues kept recurring in the AIHW conference, all the same issues that we have here in New Zealand. The middle class are baying because they are not getting treated. The rich are opting out. The poor and voiceless are forgotten completely.

Everyone wants to spend more on healthcare, but no-one wants to pay. It is seemingly a universal problem and it impressed upon me that beyond a certain point of national wealth, money actually has very little to do with our health, or indeed our happiness.

The great benefits in health have come from things that we rarely associate with healthcare – sanitation, better housing and diet. Where the health system has made a positive contribution it has largely been through simple, primary care interventions such as immunization and reductions in mother and infant mortality. More recently the looming problem of obesity – or more precisely a mismatch between diet and exercise – threatens to outweigh the benefits from reduced smoking. Yet so far the political response to this new threat has been rather sanguine, a far cry from the smoking situation.

Nowadays the simple, primary prevention and early intervention focus has been subsumed by the expensive rule of rescue. We must do anything and everything to keep people alive as long as possible, which usually means spending more on hospitals. This is difficult to disagree with in the heat of the moment, but in the cold light of day it saps resources from the activities that really make a difference to the people that really need it – in Australia this includes low income groups and particularly Aboriginal and Torres Islander communities.

We all agree it is crazy to not invest in the simple measures that could help people live longer, but where will the money come from? As was raised at the AIHW conference, prevention doesn’t save money. It is a more effective use of money, but everyone ends up in the hospital eventually.

The Australian experience presses upon me that the rule of rescue will always subsume all health resources. There will never be enough to do what really needs to be done while we are in its thrall. This is why I now believe that those who advocate public health and early intervention through the primary healthcare sector need to start talking about where the money will come from. They have a responsibility to start talking about limits to hospital treatment. Otherwise hospital care will continue to soak up the lion’s share of any new spending.

A Word of Warning

Elected Hospital Boards are being touted as the latest answer to the healthcare challenge in Australia. And in much of the debate I heard, people found it difficult to disagree with the motherhood and apple pie promise of democratically elected, locally accountable control of hospitals.

However this experiment has been tried in New Zealand for many years, and Australia should heed the results. The pressure of democratic elections certainly keeps Boards accountable, but for what? How much do we really know about local politics, and how many of us even bother to vote? Our review of the health system suggests that this local accountability is really limited to a few things:

1.       Keeping the hospital (and wards within it) open, regardless of the cost. In practice this means that hospital spending takes precedence over less transparent, but often more valuable spending in the primary and public health spheres.

2.       Keeping healthcare issues off the front page. This means they need to oil the squeaky wheel, rather than deal with the real local health issues. Those with a strong voice or a lobby behind them get treatment, those without (usually minority groups), miss out.

3.       Postcode lottery in services. Under Hospital Boards, the healthcare offered is usually related to what doctors lobby for, rather than the public. For example, even with extra funding in rural areas, they cannot possibly hope to offer the same level of service as city areas. As a result they undersupply tertiary services, and tend to oversupply minor procedures, to keep the doctors busy.

In our view, health needs to be depoliticised, not politicised. We have a system for our Reserve Bank where an independent group makes decisions based on a certain goal.

Why not do the same with health spending, with the goal of maximizing the quality of life for every dollar spent?

This approach has been successfully trialed for many years in New Zealand with pharmaceutical spending under Pharmac. This model could be broadened out over the entire sector.”

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2017 conferences
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Australian Palliative Care Conference
2018 conferences
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