Speech to Association of Salaried Medical Specialists

Speech – New Zealand Government

President Dr Hein Stander, members of the ASMS – thank you for inviting me here today to address your conference.Hon Dr Jonathan Coleman

Minister of Health

19 November 2015
Speech to Association of Salaried Medical Specialists annual conference, Wellington


President Dr Hein Stander, members of the ASMS – thank you for inviting me here today to address your conference.

Clinical engagement

I’d like to take this opportunity to thank you all for your contribution to improving health outcomes for New Zealanders.

I know it’s not an easy job, and everyone works extremely hard.

I appreciate your engagement on the most important issues in our health system.

My message to Chairs and CEs continues to be the importance of encouraging and supporting clinical-led decision-making.

One year on in the role

When I spoke to you last year, I reflected on my first six weeks as Minister of Health and outlined my priorities for the sector.

Now one year into the job, I’m enthused about my role as Health Minister – it’s challenging work.

I believe we’re heading in the right direction and the health sector is in good shape despite the pressures we face. This also reflects the overall feedback I get from the sector.

Social sector approach

Complex health issues can’t be solved by health alone. Working more closely across social sector agencies is crucial to achieving the public health outcomes we’re seeking.

The introduction of National Standards in schools, Health Targets, the Investment Approach in welfare, Better Public Service Results and more recently the Social Housing Reform Programme are all focused on getting better results from large scale social spending.

But there’s still a lot more to be done. We expect the public sector to continually do better in supporting the most vulnerable New Zealanders.

The Productivity Commission’s report on social services provided valuable input into the Government’s ongoing programme of public sector reform.

The Commission concluded that Government departments are at times not in the best position to decide which sorts of services each individual or family needs – instead we should be looking to create a system where decisions are made far closer to the patient or client.

It’s crucial we get a better understanding of people with complex needs and build services around them, rather than just dictate what they will receive.

We know these aren’t easy issues to solve. It’s clear that further, ongoing change is needed. Working together across the social sector is fundamental to this.

Health strategy

Clear strategic direction for the health sector is important.

Over the past year I’ve had officials engaging with the sector to update the New Zealand Health Strategy.

It hasn’t been updated since 2000. The draft strategy which is currently out for consultation sets the vision for the next 10 years.

The strategy update is a good opportunity to develop a more integrated cohesive health system, better able to meet the demands of the future.

It will set a clear view of the way forward for the health system to ensure that all New Zealanders live well, stay well, and get well.

It proposes ways to make the most of new opportunities, particularly technological advancements, and includes a Roadmap of Actions covering 20 work areas.

For example, under the ‘One Team’ theme, there is a proposal to put in place system-wide leadership and talent management programmes and workforce development initiatives across DHBs.

We want to develop a more comprehensive approach – including governance training, enabling clinical networks to strengthen the leadership they already provide, and support for workforce areas that need capability development.

I encourage you to provide your feedback on the strategy. Your input as senior doctors is critical to getting this right.

Economic context

Before I move onto the key issues in health, it’s important to reflect on the wider economic context.

With the GFC in 2008, our books changed from spending around $70 billion a year and receiving around $70 billion a year in tax take, to spending $71 billion but receiving $18 billion less in tax – a huge collapse in revenue.

Rather than cut our spending, we borrowed billions each year to protect and grow important health and education services, and entitlements for less well of New Zealanders, while implementing a strategy to bring our revenue back to balance.

Our plan has worked, despite pessimism from our critics, we have achieved balanced books for the first time in seven years. We are one of the very few OECD nations who have lived within their means.

This Government has continued to make health our number one funding priority. We’ve increased Vote Health by around $4 billion since 2008/09. The Ministry advise that this is amongst the highest increases in the developed world since the GFC.

However, no one is ever going to claim there’s too much money in health. I will continue to push strongly for more resources in future budgets.

But it needs to be understood that we continue to remain in a risky and challenging world economic environment, with China slowing, European stagnancy, and low dairy prices as some of the factors that will continue to make budgets tight as we continue to focus on living within our means.

Budget 2015

Health received the largest share of new funding in Budget 2015, and we obtained $400 million extra to grow our public health services this year.Investment in our public health services has now risen to a record $15.9 billion in 2015/16.

We’re investing around $1.7 billion over the next four years for new initiatives and to meet cost pressures and population growth, including more funding for elective surgery, palliative care and free doctors’ visits for children under 13.


I’d like to reflect on the TPP agreement and what it means for New Zealand, noting that it’s an issue which some ASMS members have campaigned against. We have a track record of high quality trade deals that maximise benefits for New Zealanders.

The TPP, which includes 12 Asia-Pacific countries, is New Zealand’s largest trade agreement. It will eliminate tariffs on 93 per cent of our exports to our new FTA partners, saving businesses NZ$259 million a year when fully implemented.

The TPP preserves New Zealand’s public health system, in particular the fundamentals of the Pharmac model.

Pharmac will only incur very minor additional costs relating to transparency provisions, amounting to around $4.5 million in one-off costs, and $2.2 million per year in ongoing operating costs.

The public will still pay no more than $5 per subsidised prescription item.

Furthermore, the TPP will significantly boost New Zealand’s export-dependent economy to the tune of $2.7 billion by 2030, allowing future governments greater choices about investment in social services such as healthcare.

With a third of GDP being received as tax, this is almost certainly going to mean that many more resources will be available.

HBL/Southern DHB

Over the last year I’ve dealt with some long standing issues which required decisions.

We listened to the feedback from DHBs and decided to close HBL. The Auditor General confirmed that HBL made valuable savings, and supported the decision to move implementation of the shared services programme to a DHB-owned vehicle.

We acted on Southern DHB. My decision to appoint a Commissioner was based on the need to deal with the clearly deteriorating financial issues, and to move the DHB over time to where we can plan for their overdue hospital rebuild.

3 DHB Labs

We listened to concerns that clinicians were not involved enough in discussions during the earlier phases of the three lower North Island DHB laboratories procurement.

As part of the transition to Wellington SCL we put in place a three tier governance framework involving senior clinicians at all levels. This included having a dedicated Clinical Reference Group chaired by the Capital Coast CMO and involving clinicians and referrers from across the region.

The Clinical Reference Group will continue to meet until the new laboratory alliance group is stood up in early 2016.
While it’s early days, and we continue to monitor the process, overall the transition has gone according to plan with the new integrated workforce, new facilities, IT system, and equipment performing as expected.
The DHBs expect to save over $10 million a year as a result of increased economies of scale and efficiency. These savings can be re-invested into frontline services. In addition, Wellington Regional Hospital has a brand new laboratory and equipment.

Reducing childhood obesity

Tackling obesity is a key area I’m focused on. Being overweight or obese is expected to overtake tobacco as the leading preventable risk to health in New Zealand within the next 12 months.

There is no single solution. That’s why we’ve developed a range of interventions across Government, the private sector, communities, schools and families. We are now one of the first OECD countries to have a target and a comprehensive plan to tackle childhood obesity.

The Childhood Obesity Plan includes improved public information and resources, increasing physical activity, some of which will be done in education settings, actions for the health sector, and the food and beverage industry.

At the core of the plan is a new childhood obesity health target of 95 percent of children identified as obese in the B4 School Check being referred to an appropriate health professional for clinical assessment and family based nutrition, activity and lifestyle interventions by December 2017.

Over 58,600 children have benefited from the B4 School Checks in the last year. Of that, over 1,400 were referred on for obesity related support. With this new target we expect that will treble to over 4,000 a year by December 2017.

The Government is not considering a sugar tax. The jury is still out on whether a tax on sugar sweetened beverages actually reduces rates of obesity.

Non-communicable diseases

I also want to see continued progress on non-communicable diseases, and a greater focus on prevention and earlier intervention.

Healthy Families NZ is the Government’s flagship prevention platform. It is a large-scale initiative that brings community leadership together to take action against the rising rate of preventable chronic conditions.

Across 10 locations around the country, Healthy Families NZ has the potential to reach a million New Zealanders.

It will enable us to deliver preventative services at a scale that can impact entire populations, both now, and for future generations.

Diabetes is also a long-term condition that the Government is particularly focused on addressing.

Last month we released the national diabetes plan. As you are all aware, the key is earlier detection and better management of diabetes.

Importance of IT

IT is a significant strategic investment for Government, both from a health and broader social sector investment perspective.

It has a crucial role to play in making the health system more sustainable, improving productivity and efficiency and health outcomes.

E-Health solutions are an important enabler of new models of care and providing care closer to home.

IT also has a role to play in supporting Government’s wider cross-government interests.

It’s clear clinicians and health providers want better access to health information across the system, where and when they need it. They want IT systems that are well-designed, easy to use and closely aligned with clinical workflows.

Developing a clear vision for the future of IT investment in health has been one of my key priorities.

I have asked the Health IT Board to establish a work plan under my direction.

Firstly, DHBs need to complete the foundation eHealth investments set out in the National Health IT Plan. Over the next 12 months we need to complete the design-thinking and investment plans for a Hybrid/Best of Suite approach.

It’s important the health information we collect about individuals and populations is shared with the broader social sector to inform future social investments, evaluate the impact of programmes and ensure the services provided by other sectors contribute to improving the health of all New Zealanders.

For information sharing and integrated services to work well it takes a team approach. They need to be developed and implemented with strong leadership from clinicians, working in partnership with patients and vendors.

Primary care

Some of you may not be aware of the IPIF (Integrated Performance and Incentive Framework), which is the set of performance measures for the primary care sector.

I want to see a shift to performance measures based on outcomes such as avoiding unnecessary hospitalisations, rather than focusing on transactional outputs and processes.

I’m interested in how we move further and faster towards outcome measurement at a national level. We need a system wide view of performance, as well as an ability to measure outcomes for each of the component parts.

Only a small number of measures need to be reported nationally. I am often told by the sector that the burden of reporting is high, and I want to ensure the purpose of any reporting is well thought through.

I decided to continue with the current IPIF measures focused on health targets in 2015/16, and will not be introducing new measures at this stage.

I have officials working with the sector, particularly clinicians at the coal face, to develop more outcome focused and aspirational performance measures.


In terms of other priorities, I’ve made it clear to DHBs that I expect more services to be delivered in the community.

Integration and care closer to home will help develop a more efficient and sustainable health system. It will also provide a better experience for the patient.

We extended free general practice visits and prescriptions to children under 13, benefiting over 750,000 children and their families. Uptake exceeded expectations with 98 percent of general practices now opted into the scheme.

We also invested $6 million in Budget 2015 to create new community based multi-disciplinary early intervention teams for the diagnosis and management of musculoskeletal conditions.

These new Local Mobility Action Teams will work with a range of community health services, including GPs, dieticians and physiotherapists. The first of the Teams will be up and running early next year.

There will also be a continued focus on the health targets. The latest results show that DHBs continue to make good overall progress and that’s a tribute to your hard work. For example:

• Shorter stays in ED, over 250,000 New Zealanders were admitted, discharged or transferred for an ED within 6 hours.

• Electives, 167,104 elective surgical discharges in 2014/15, over 10,600 more than originally planned for, and 50,000 more than in 2008/09.

• Progress towards the new faster cancer treatment target increased to 68 per cent.

• Increased heart and diabetes checks – over one million heart and diabetes checks have been completed over the last five years.

However, there’s always more work to be done, and we need to continue the momentum.

Unmet demand

In any publicly funded health system it’s important that the available resources are directed to those with the greatest need.

As you all know, it’s always been the case that the public health system is not able to fund all elective surgery. As a Labour Minister said in 2007, ‘there has always been some people who might benefit from but whose elective surgery was not of high enough priority to have been publicly funded’.

Claims by some critics that we’re ‘driving a large part of our elective health system into the private sector’ are wrong. In fact, the opposite is the case.

The percentage of public health spend under this Government has risen by around four per cent as a percentage of total health spend, and the private sector part of New Zealand health spend has reduced to around 18 per cent.

This reflects the strong investment that we’ve made in health over the last seven years despite tough economic times, and it also reflects the greater efficiency of our elective services.

FSAs & elective surgery increases

Our hospitals are doing well in meeting and exceeding our elective surgery targets, and seeing more people for their First Specialist Assessments. Your contribution has been crucial to this success.

The number of surgical and medical FSAs has increased from around 432,000 in 2008/09 to over 542,000 in 2014/15. That means around 10 per cent of New Zealanders had one or more FSAs in the last financial year for either medical or surgical needs.

That’s why elective surgeries are up by 50,000 to around 167,000 in 2014/15.

Doing better every year is very important – like many comparable countries we face both a growing population and an ageing population which is living longer.

There is always more to be done, and the only answer to increased demand is more operations, which is what we’re delivering.

National Patient Flow

The outcomes of GP referrals has never been formally measured. The data that’s available is partial and incomplete.

The previous Government in 2006 estimated around 25 per cent of all GP referrals to specialists were returned to GP care. This would mean that of the 260,000 patients seen each year under Labour, at least 65,000 were being referred back to their GP.

That’s why the Government launched the National Patient Flow project. It’s a significant undertaking to standardise the way this data is recorded by DHBs and to understand referral outcomes. The first release of information is expected in 2016.

While clinical prioritisation tools help to ensure that the right patients are treated at the right time, National Patient Flow information will give patients greater certainty.

It will provide a national view of information on referrals for elective services, how referrals are managed within secondary care, and waiting times for a range of elective, diagnostic, cancer and general medical services.

Over time it will also produce measures to gather information about other referral points within the health system. It’s expected to enhance information about demand for hospital services, how hospitals respond to that demand, and why patients may experience delays.

Growing the workforce

We are continuing to grow the specialist workforce.

Medical specialist numbers have increased by over 33 percent since 2008, and there are currently 4,065 Full Time Equivalent specialists employed by DHBs.

There is an increased focus on aligning medical student numbers, pre-vocational and vocational training places with long-term employment opportunities in New Zealand.

I know the Association is represented on the Medical Workforce Taskforce Governance Group, and I’m pleased to see it has adopted this of whole-of-career perspective to workforce sustainability.

The Taskforce has encouraged DHBs to reduce the reliance on international medical graduates and recent surveys indicate there is a definite downward trend.

DHBs have also been encouraged to fill the optimum number of vocational training positions to ultimately provide future specialist services. Consideration is also being given to best utilisation of specialists nearing the end of their career.


In closing, I think we’ve made good progress in a number of key areas this year – securing $400 million extra in the budget, closing down HBL, appointing a team of Commissioners at Southern, we’ve introduced a target and a comprehensive plan to tackle childhood obesity, and we’re refreshing the New Zealand Health Strategy.

I want to assure you that the Government remains committed to providing high quality health services for New Zealanders.

I am confident that together we can meet the challenges we face by working as a team and making the most of the skills and knowledge of the workforce.

Thank you again for the opportunity to speak to you all today.


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