Thank you for inviting me to speak at your conference in Napier this morning.

This is a great opportunity for health managers from a wide range of health providers to come together to hear and debate current and future issues facing our health system.

There are many challenges in Health so you will have a lot to talk about.  

It is a great privilege being the Minister of Health. That's made even better by having a Prime Minister and Finance Minister both with a firm commitment to a strong and enduring public health service.

As I have travelled around the country in the last ten months, I have talked with many health professionals, and their dedication and commitment make me very optimistic about the future of New Zealand's health system.

Our health workforce is world class, but it is clear to me that many of those who participate in it are concerned about the current state of our health system.

Like health professionals, the public - and therefore patients - see a system where increasing amounts of money have been invested in recent years, taking up an ever larger proportion of the national income, without commensurate growth or improvement in services.

People have become frustrated by unnecessary bureaucracy, long waits for patient assessment and specialised treatment, and an evident deterioration in some services.

The Government is determined to turn this situation around. The Government wants our public health service to deliver better, sooner, more convenient care for all New Zealanders. We want reduced waiting times, better individual experiences for patients and their families, improved quality and performance , and a more trusted and motivated health workforce.   

 

Financial Situation

We are working to achieve that despite the worst global economic crisis since the 1930s.  It is more important than ever that we live within our means while we try to protect and improve the public health service for patients and health workers alike.

Despite the recent encouraging news that we might be coming out of the recession, its impact has had such a profound effect on our economy that it has replaced the large government surpluses of recent years with equally large deficits.

The truth is the Government will borrow $30 billion dollars to protect vital social services such as health, confident that the New Zealand economy will eventually come right and we will have protected our communities during that time.

Because of the economic crisis, the Government is now in deficit.  New spending has shrunk to $1.5 billion, and we've had to borrow that. 

Despite this, such is the priority this government places on protecting and supporting our public health service, Health received half of that in the Budget - the same amount it has received in recent years.  

In other words, Health got a $750 million increase, while the other 30 or so ministries and departments shared the other $750 million.

Next year the new spending allocation for the entire government could be around $1.1 billion.  Maintaining a $750 million dollar share for health will be highly unlikely unless there is a significant turn-around in our country's finances.  There is a significant time lag between the economy returning to growth , fuller employment and increased tax revenues.  Next year money in health will be even tighter.

The National Government is committed to a strong and enduring public health service but the health service in turn will need - more than ever - to ensure a strong and ongoing focus on value for money, with resources moving from administrative overhead and low priority spending into more important frontline services.

That is one of the main themes of the recently released Ministerial Review Group Report.

 

Ministerial Review Group

'Meeting the Challenge' is a comprehensive report, with 170 recommendations on how to reduce bureaucracy, improve frontline health services, and improve value in the public health and disability sector.

The Ministerial Review Group included some of New Zealand's best health sector professionals.   Many of their recommendations have been well discussed in the sector but the Government is under no obligation to accept any or all of them. 

The MRG recommends changes to structure and decision making responsibilities in Health and I'd like to discuss some of those now.

The Report writers reiterate what is evident and agreed already - and what I have just discussed with you - that the health system performance needs to improve to cope with a constrained fiscal environment.

They go on to discuss specifically where they believe health services need improvement and I think this too is generally accepted in the sector.

Current decision-making about health services is too decentralised and fragmented.  The parochial interests of District Health Boards often take priority over regional or national planning, leading to suboptimal decisions

The Ministry of Health is expected to do too much across too diverse a spectrum of activity.   Capital, IT and workforce planning up until now, has not been well integrated with service planning and national priorities. 

Some complex tertiary national services like paediatric oncology and cardiac surgery could be more effectively planned and funded on a national basis.

The Ministerial Review Group proposes a different structure to deal with these issues.

They recommend a new National Health Board which among other things, could directly fund the small number of national services which in a country the size of New Zealand would be more effectively funded and planned at a national level.

DHBs would still be responsible for planning and funding the lion's share of services, either regionally or locally - but they would be required through funding agreements and accountability documents to take a much stronger regional focus in collaboration with their neighbouring DHBs.

DHBs would be required to work closely with PHOs to integrate services between secondary and primary settings - something this Government is very keen to see happen.

We need to reduce referrals and unnecessary hospital admissions and begin to provide health services closer to home.

The MRG report also recommends centralising DHB back office functions like payroll, IT, and procurement into a new National Service Support Agency. This would be to reduce the duplication of 21 DHBs all doing the same thing, and it would free up resources for the front line.

The MRG proposes establishing a new National Health Board to enable a shift towards greater national and regional decision- making within the DHB model, but at arms length from Government. 

The National Health Board would require DHBs to plan regionally and it would arbitrate where regional decision making breaks down.

It would also advise on national workforce development, IT investments and the allocation of capital funding to support service plans instead of asking DHBs to collectively prioritise.

The Ministry of Health would concentrate on health policy and regulation.

The recommendations of the report do require careful consideration and that is why we are currently seeking feedback from the public and the health sector on the report.  Feedback is due this Friday. I shall be taking a report to Cabinet for consideration within the next few weeks.

I can assure you the Government will not agree to anything that increases the bureaucracy, or doesn't improve patient services.

The Report is available on the Ministry website, and I recommend it to those of you really interested in the challenges facing our public health service.

 

Clinical leadership and engagement

There is another fundamental driver for better health outcomes recommended in the Ministerial Review Group Report that also underpins this Government's health policy.

This is a strong commitment to clinical leadership and engagement.

Clinical leadership is about putting our clinicians at the centre of leading our health system.  Globally, clinical leadership and engagement is recognised as a fundamental driver for better health outcomes, improving job satisfaction, and of course that in turn keeps clinicians in New Zealand.

In contrast this Government inherited a health system where the influence of clinicians on patient outcomes here in New Zealand was less than it had ever been before.

And that is why the new National Government commissioned a significant report called 'In Good Hands' to guide District Health Boards in introducing greater clinical leadership into the public health system.  President of the Association of Salaried Medical Specialists, Dr Jeff Brown, lead this work.

The 'In Good Hands' report provides strong guidance to DHBs on how they can institute a more engaging and less top down approach for their doctors, nurses and other health professionals.

This Government is serious about re-engaging doctors and nurses in the running of front line health services, not just talking about it, and we have instructed DHBs to act on this report.

 

Clinical Networks

In addition, we are strongly committed to developing clinical networks.

New Zealand is  a small population spread across a large distance and we need to use our few resources wisely.

For example,  we have established the National Cardiac Surgery Clinical Network - a team of the country's leading heart surgeons who are leading much needed reform of New Zealand's cardiac surgical services.

We've also established the Maternal Fetal Medicine Network. 

There is literally, half a handful of specialist obstetricians serving the high end, highly intensive needs of a small group of New Zealand mothers.   

We do not have the resources to have teams of specialists of this calibre in every DHB so the more we can enable our few specialists to work with clinical associates and midwives to help all New Zealanders, the better. 

This Network will build on the working relationships of national fetal medicine specialists around the country to the ultimate benefit of New Zealand mothers and their babies.

Greater cooperation and coordination between our senior clinicians across the country will improve frontline surgical services for all New Zealanders.  We plan to work with clinicians to instigate and encourage more national clinical networks, as a way to improve clinical viability and patient service.

This is not to say that we want doctors and nurses to stop doing what they were educated to do and become managers.  But we do want to use the wealth of frontline experience nurses and doctors have accumulated to improve quality of care and rebuild confidence in the public health system.

Formation of the Cardiac Network and the Maternal Fetal Medicine Network are the first examples of what will become a more common aspect of the New Zealand health system in the future - clinical networks, in which clinicians, managers (and, where appropriate, consumers) come together to guide the development and improvement of health services, and make the decisions about the things that matter. 

I congratulate you on choosing such an important topic as networks as the theme for this conference.

 

Strengthening collaboration and coordination across the health system

The Government is committed to clear, effective and coordinated leadership and planning across the health system.

As I have mentioned, we are all aware of the well documented challenges facing the public health system - challenges made more acute by the current global financial crisis, and the need for health to plan within a more constrained future funding growth path.

These challenges require a coordinated response throughout the health sector. 

However, as I have said, with responsibility split among the 21 DHBs and the Ministry, effective co-ordination of service planning and delivery has proved difficult to achieve. 

This is reflected in the present fragmented service provision, differences in access between services and across regions, and considerable variation in performance against national indicators and targets.

As services become more complex and interdependent, planning at district level alone will no longer be sufficient to ensure the viability and affordability of health services over the long term. 

While we work relatively well at regional and national levels now, there is more that can be done to improve the clinical and financial viability of services.

The Government is seeking better coordinated and integrated service planning and decision making processes across all levels of the system, to support improved service delivery across the different levels of the health system - district, regional and national. 

This will be done working in partnership with health professionals to harness clinical expertise to improve service planning and quality.

 

Conclusion

Ladies and gentlemen - this evening I have given you a picture of the challenges facing our public health service.

They are major, but we are not alone in trying to find solutions.

Government in the States, Great Britain and Australia, are also considering how to deliver health services to populations for whom quality health services are a top expectation.

It is a time of major challenge, but also a time of opportunity and innovation.

Tough times mean we need to move resources to the frontline and to new models of care.

With stronger engagement and greater involvement from the whole health workforce, I have absolutely no doubt the future of our public service is very positive.

I would like to wish you all well for the next two days. 

I hope that you will be able to take back some lessons from the conference to your workplace for continued innovation and improvement. 

Thank you for the opportunity to speak with you.