Doing more with less: New Zealand’s response to the

health care sustainability challenge

Toni AshtonProfessor in health economics

School of Population Health, University of Auckland

School of Population Health

Average spending on healthper capita ($US PPP)

Real growth in public health expenditure 1950 - 2010

New Zealand Netherlands

% GDP on health (2010) 10.1 12.0

Expenditure per capita (US$PPP )

3022 5056

Annual growth rate 2000- 2010

5.5% 5.4%

Physicians per 1000 2.6 2.9

Nurses per 1000 10 8.4

Hospital beds per 1000 2.7 4.7

Pharm. Expenditure per cap (US$PPP)

285 481

Source: OECD Health Data 2012

Inputs

New Zealand Netherlands

Doctor consults per year 2.9 6.6

MRI exams per 1000 3.6 49.1

CT scans per 1000 22.4 66.0

Hospital discharges per 1000 1469 1158

Caesarean sections per 1000 235 148

Outputs

Source: OECD Health Data 2012

NZ health systemNZ health system

82% public funding (74% tax, 8% SI) Risk-adjusted population-based regional funding Free care in public hospitals - specialists

salaried GPs paid by capitation + copayments Supplementary private insurance Strong central guidance

Waves of “reform” in NZ 1938:

– Introduction of public health system

– Locally-elected hospitals boards

1993: – Purchaser/provider split and provider competition

– Commercialisation of hospitals

2000: – Back to locally-elected district health boards

– Emphasis on primary health care

PublicHospitals

Ministryof Health

20 District Health Boards

“Service agreements”

Ownership

AccidentCompensation

Corporation

PHOs, NGOs, Other private

providers

Population-basedFunding

“While many developed countries are freezing or reducing health funding, this government is committed to protecting and growing our public health services.........”

Budget May 16 2013

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

Regionalisation/centralisation– Regional planning– Regional provider networks– Regional procurement of supplies– Centralisation of DHB ‘back office’ functions, IT,

workforce– Fewer DHBs??

HTA and prioritisation Extension of PHARMAC to medical

devices

Impact of PHARMAC on drug expenditure

Meso (organisational) level

Concentration of specialised hospital services

Shift of care from hospitals into the community

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

Development patchy – and slow Lack of start-up capital Collaboration more important than

co-location

Integrated Family Health Centres: The practice

Meso (organisational) level

Concentration of specialised hospital services

Shift of care from hospitals into the community

Improved integration of services Productivity of hospital wards

Productivity of public Productivity of public hospitalshospitals

Productivity

Med and Surg outputs

Doctors and nurses

“Releasing time to care”

Time spent with patients increased by over 10%. Sometimes doubled.

Cost savings: eg: reduced stock levels, laundry

Fewer patient complaints, increased patient safety, improved staff morale

Meso (organisational) level

Concentration of specialised hospital services

Shift of care from hospitals into the community

Improved integration of services Productivity of hospital wards Long term care

New Zealand Netherlands

Pop >65 years 13.5% 15.2%

Pop >80 years 3.4% 3.9%

65+ in residential care 3.6% 6.7%

65+ receiving home care 11.6% 12.9%

%GDP on long-term care 1.4% 3.5%

Long-term care

Source: OECD

Long-term care

“Aging in place” Standardised needs-assessment Assisted living arrangements?? Stricter income and asset testing?? Increase pre-funding??

– Compulsory insurance

– Incentives for private saving

Micro-level (doctors and patients)

Task-shifting– Nurses, pharmacists, physician assistants

Improve patient self-management Prevention

– CVD and diabetes risk assessment– Immunisation– Smoking

What is NOT being discussed?

Increasing copayments Greater use of private insurance Increasing competition and

choice Methods of reducing

“unneccessary” care

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