Introduction

Good morning. Thank you for the opportunity to open the Annual Scientific Meeting of the Royal Australasian College of Physicians.

I'd like to extend a warm welcome to all those who have travelled from overseas for this meeting, and would especially like to acknowledge the four keynote speakers, Professor Anthony Back (who has travelled from Seattle to be here), Dr John Bourke ( from the UK), and our own Professor (Doctor) Martin Connolly and Dr Sinead Donnelly. 

The programme for your four-day meeting is impressive, and looks to cover a number of ongoing and future challenges in respect of caring for older people with chronic conditions.

The past 20 years has seen many changes in the care of older New Zealanders. Older people are living longer and many are living with a range of medical conditions for a longer time.

This Government is continuing the policy of encouraging and supporting more of our elderly to continue living in their own homes and participate in their communities for as long as they want to.

Challenges

Today I'd like to talk about some of the significant challenges we face in the public health service: the financial crisis, clinical leadership and the exciting future we have in Health as a result of the administrative shake-up announced recently.

Patients and clinicians alike told me last year how frustrated they were with  a system where increasing amounts of money had been invested in recent years, taking up an ever larger proportion of the national income, without commensurate growth or improvement in services.

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

The new Government is determined to turn this situation around. The National-led 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 our goals in the shadow of the worst global economic crisis since the 1930s. It is more important than ever that we live within our means while we protect and improve the public health service for patients and health workers alike.

Despite the recent very encouraging news that we are coming out of the recession, its impact has had such a profound affect on our economy that it will replace the large government surpluses of recent years with equally large deficits. New spending this year has shrunk to $1.5 billion - and we've had to borrow in order to provide for that. 

The Government places a high priority on protecting and supporting our public health service. For this reason, Health received half of all new spending in this year's 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 will be even less than this year - $1.1 billion. 

Maintaining a $750 million dollar share for health is no longer possible. We are heading from a time of 9% annual increases in funding to more modest funding increases. Significantly smaller increases in health funding can be expected. In other words year health funding will increase but by nowhere near as much as this year.

There will be a significant time lag between the economy returning to growth and fuller employment and the Government's deficit being reduced by increased tax revenues. Next year's budget figures are already based on a projected 2% growth rate; next year's budget will be even tighter.  The Government is borrowing $250m a week for the next 4 years. So we have to get maximum value out of every health dollar.

What this means is that the Ministry of Health and District Health Boards will have to focus on getting maximum value from every dollar. There will be few new initiatives next year. Some low priority and low benefit programmes will be stopped, slowed or scaled back, and the savings put into improving priority frontline services.

The 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 administration and low priority spending into more important frontline services. 

We will all have to work smarter and more effectively to ensure New Zealanders continue to receive quality health services.

Ministerial Review Group Decisions:

The National Government inherited a public health system that wasn't well placed to cope with the significant financial and clinical challenges facing it. There is too much duplication that has led to poor regional and national performance and a track to financial crisis.

There is clear consensus across the sector - and amongst the public - that change is needed.

That was evident in the conclusions of the Ministerial Review Group report - which canvassed the sector widely and deeply.  Led by Dr Murray Horn, the Group included some of the smartest people in the health system. They travelled the country listening and debating with people across Health.

And it was also evident in the large amount of feedback we received on the report - which was largely in support of the proposed changes.

The Ministry of Health needs a clearer focus on working with District Health Boards on improving services for patients.

We need better coordination between District Health Boards (DHBs) and the Ministry of Health.

We need neighbouring DHBs working better together to improve services - and clinical networks guiding and supporting this cooperation.

To better focus on patients, the public health service needs to stop reinventing the wheel 21 times in areas like IT, payroll, procurement and logistics. 

The Government is doing that.

We have announced a major administrative shake-up in health.

First there is a new National Health Board (NHB) set up within the Ministry of Health and chaired by Dr Horn.   The NHB will provide more focused national supervision of the $9.7 billion of public health funding the 21 DHBs spend on hospitals and primary health care.

The NHB within the Ministry will pull together all those units and sections and staff currently fragmented and duplicated across the Ministry into a more strongly focused unit.  This will enhance the NHB's ability to supervise and oversee the work carried out by the 21 DHBs.

This will deliver significantly better short and long term planning. We will finally achieve long overdue progress with regional planning and regional DHB cooperation.

A fundamental part of that depends on good strategic planning of infrastructure.  You cannot have an optimal public health service without it.

Currently there is a plethora of committees, groups and approaches carrying out IT, capital investment and workforce planning.

And it is not good enough. I think most would agree with that.

The Government is bringing this together to work with the new NHB.

Take Information Technology as an example. Currently we have 21 different DHBs with large IT teams and different approaches, more often than not working sporadically alone and together on a project by project basis. 

That is why we have made such little progress in fundamentally important IT areas such as interconnectivity between primary and secondary care. 

Consolidating IT is a major step forward and has near universal support and we need to link that with what else is happening.

For example we need to know how new scopes of practice will impact on how we configure and build the wards and hospitals of the future.

Those decisions, in turn, interlock with decisions on information technology in the health sector. Each is hugely informed and impacted by the other but to date, have not been well enough connected.

The leaders of IT and workforce will also sit on the National Health Board to directly feed their expertise in to the planning and oversight of the $9.5 billion of services that DHBs deliver to New Zealanders.  This will make a huge difference to decision making.

The NHB will also take national responsibility for vulnerable health services such as paediatric oncology, clinical genetics and major burns.  Clinical networks will play a large part in supporting and guiding these services. 

We've publicly invited nominations for the NHB Board. It is my goal to have strong clinical appointments on that Board. Nominations for the NHB board close on Monday.

Work has also started on setting up a shared services establishment board to consolidate the 21 DHBs' back office administrative functions such as payroll and bill payments.

As a package, the changes that would consolidate DHB administration like IT, payroll and harnessing the power of bulk purchasing are estimated to save up to $700 million over five years. That saving will be put straight back into front line health services.

$700 million would buy about 16,000 heart bypass operations or build a couple of large city hospitals.

The changes are also expected to reduce the health system's administrative staff by up to 500 jobs.  That's an estimated 300 back office administrators in DHBs and 185 in the Ministry of Health itself.   Individual DHBs are also planning reductions in their administrative staff, as they move resources from administration into frontline services.

The changes we announced are about making the current system work better - it is about filling in the missing links that have hobbled national and regional cooperation in our public health service for years, and allowed wasteful duplication and constant reinvention of the wheel in the 21 DHBs. 

They are an urgent priority and implementation has already begun. The health sector is ready for change. And that change will be good for patients and good for health.

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 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. 

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.

I urge you to step up and grab the opportunity clinical leadership provides. This government sees you as part of the solution not part of the problem.  DHB managers are getting the message the clinical engagement is fundamental, and you should assert your involvement at every opportunity.

Managers will respond incredibly well to clinicians willing to lead and engage in improving productivity and the way services are provided for patients.

Long-term conditions

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

Long-term or chronic conditions represent a significant challenge to a strong and effective public health system.  This is a challenge we share with other developed countries.

We need to provide better, sooner , more convenient health services .

People need the right treatment closer to home. That is particularly relevant for our eldery people with long term conditions.

Our key policy is to make changes to the system such that health services are delivered closer to and more focused on the needs of our communities.  My expectation is that we will reenergise the primary care sector to deliver:

• better health for everyone with earlier prevention


• sooner diagnosis and earlier intervention


• and more convenient self-management and patient-centred care.

We need to put the patient first.

Around the world, that direction is clear, sensible, and it is necessary.

It's about keeping people out of hospitals and delivering quality care closer to home - even at home - through better community care.  This will be particularly significant for older New Zealanders who currently are significantly accessing high cost secondary services because alternative better targeted community services are not available.

Accelerated change is required across the sector.

The New Zealanders most likely to be admitted to hospital are those over the age of 75. The health service could do a lot better for the frail elderly in this country.

Much more needs to be done to better care for the frail elderly in our community, with a team-based approach from health professionals. These older New Zealanders deserve a more integrated health service...where their GP, nurse, pharmacist and specialist are providing the best practice care as close to home as possible.

In the health service of the future more of the care we provide will be in the community closer to where people live either at home or, in the case of many of the frail elderly, in a rest home.

The challenge for physicians and geriatricians in particular is to help lead this improved care in the community. We will be looking to you to help us provide better care closer to home.

You should take up the opportunity the drive for clinical leadership offers, and lead the development of improved clinical pathways for our frail elderly.

Conclusion

As your international guests will know, countries around the world are considering how to deliver better value health services to their people for whom quality health services are a top expectation...at a time of unprecedented international financial stress.

The United States, Britain and Australia are all in the middle of strong national debates about their healthcare systems.

It is a time of major challenge, but also a time of opportunity and innovation. Your profession is year by year able to do more to help people with disabling conditions.  The challenge is to be equally innovative in meeting the increasing total cost of such interventions.

I am very optimistic about the future of the public health service and I look forward to working with you on our priorities in the future.

Thank you again for inviting me to open the Annual Scientific Meeting of the Australasian College of Physicians.

I wish you all the best for a productive and interesting conference.