Doing more with less: New Zealand’s response to the health care sustainability challenge Toni Ashton Professor in health economics School of Population Health, University of Auckland School of Population Health

Average spending on health per capita ($US PPP)

Real growth in public health expenditure

New ZealandNetherlands % GDP on health (2010) Expenditure per capita (US$PPP ) Annual growth rate %5.4% Physicians per Nurses per Hospital beds per Pharm. Expenditure per cap (US$PPP) Source: OECD Health Data 2012 Inputs

New ZealandNetherlands Doctor consults per year MRI exams per CT scans per Hospital discharges per Caesarean sections per Outputs Source: OECD Health Data 2012

NZ health system n 82% public funding (74% tax, 8% SI) n Risk-adjusted population-based regional funding n Free care in public hospitals - specialists salaried n GPs paid by capitation + copayments n Supplementary private insurance n Strong central guidance

Waves of “reform” in NZ n 1938: –Introduction of public health system –Locally-elected hospitals boards n 1993: –Purchaser/provider split and provider competition –Commercialisation of hospitals n 2000: –Back to locally-elected district health boards –Emphasis on primary health care

Public Hospitals Ministry of Health 20 District Health Boards “Service agreements” Ownership Accident Compensation Corporation PHOs, NGOs, Other private providers Population-based Funding

“While many developed countries are freezing or reducing health funding, this government is committed to protecting and growing our public health services ” Budget May NZ$1.6 billion extra over next 4 years

“ We need to see further improvement in efficiency gains and containing costs..... We must do more with less”

Doing more with less: Macro (policy) level n Regionalisation/centralisation –Regional planning –Regional provider networks –Regional procurement of supplies –Centralisation of DHB ‘back office’ functions, IT, workforce –Fewer DHBs?? n HTA and prioritisation n Extension of PHARMAC to medical devices

Impact of PHARMAC on drug expenditure

Meso (organisational) level n Concentration of specialised hospital services n Shift of care from hospitals into the community n Improved integration of services

Integrated Family Health Centres: The vision Co-location of a wide range of services provided by multi-disciplinary teams –Minor surgery –Walk-in clinic –Nurse-led clinics for chronic care –Full diagnostics –Specialist assessments –Allied health services –Some social care

n Development patchy – and slow n Lack of start-up capital n Collaboration more important than co-location Integrated Family Health Centres: The practice

Meso (organisational) level n Concentration of specialised hospital services n Shift of care from hospitals into the community n Improved integration of services n Productivity of hospital wards

Productivity of public hospitals Productivity Med and Surg outputs Doctors and nurses

“Releasing time to care” n Time spent with patients increased by over 10%. Sometimes doubled. n Cost savings: eg: reduced stock levels, laundry n Fewer patient complaints, increased patient safety, improved staff morale

Meso (organisational) level n Concentration of specialised hospital services n Shift of care from hospitals into the community n Improved integration of services n Productivity of hospital wards n Long term care

New ZealandNetherlands Pop >65 years13.5%15.2% Pop >80 years3.4%3.9% 65+ in residential care3.6%6.7% 65+ receiving home care11.6%12.9% %GDP on long-term care1.4%3.5% Long-term care Source: OECD

Long-term care n “Aging in place” n Standardised needs-assessment n Assisted living arrangements?? n Stricter income and asset testing?? n Increase pre-funding?? –Compulsory insurance –Incentives for private saving

Micro-level (doctors and patients) n Task-shifting –Nurses, pharmacists, physician assistants n Improve patient self-management n Prevention –CVD and diabetes risk assessment –Immunisation –Smoking

What is NOT being discussed? n Increasing copayments n Greater use of private insurance n Increasing competition and choice n Methods of reducing “unneccessary” care

Dank u wel!