Professor Peter Crampton - Dean and Head of Campus of the University of Otago, Wellington - staff and students of the University of Otago, ladies and gentlemen.   

I am delighted to have been invited to deliver the annual Sir Arnold Nordmeyer Memorial lecture. Thank you.

Sir Arnold was a Parliamentarian who, seventy years ago, started a notable contribution to New Zealand.

He was of a different political persuasion to me - but despite that drawback - Sir Arnold made his mark - including over six years as Minister of Health.

It's interesting that early in his tenure, with the support of the local hospital board, Sir Arnold pushed for the introduction of bulk funded doctors in the Upper Waitaki works camps, and the establishment of what we would call PHOs today.

Seventy years on, it is now my privilege to be Minister of Health.

It has become widely accepted that taking on the Ministerial responsibilities of the very complex and challenging Health Portfolio  is not regarded - on either side of the House - as a  career enhancing move.  I've been told no-one in living memory has ever volunteered for the position. 

After three years as Opposition Spokesman talking to a wide cross section of health professionals, and learning so much of the challenges we face, I put my hand up for the job.

Ten months on, the challenges have been, and still are, enormous.

But, despite the uncertainty of swine flu, $160 million worth of unfunded services to pay for in DHBs, and the present Auckland Labtests situation, I am even more enthusiastic about the privilege of working with our dedicated staff in the public health service.

So today I would like to talk about those challenges we face, what we are planning and already doing to improve the public health service, and where we might go in the future.

This is a new National Government that is determined to protect and improve the public health services through the world's worst economic recession since Sir Arnold's time.

We will do that while at the same time addressing the other huge challenges that our public health service faces, such as workforce shortages, financial deficits and service quality.

It is our aim to try and make the system with its 21 Health Boards and population based funding system work.

This National Government is committed to a strong and enduring public health service and determined to build a better performing one - without major upheaval.

So while you will no doubt hear from time to time the Government's critics claiming hidden agendas, a return to the nineties, privatisation and so forth, I am here today to tell you they are wrong, and it is they who time will show have failed to move on from he past.

The Government wants the public health service to deliver better, sooner, more convenient care for all New Zealanders.

More specifically we want reduced waiting times and better individual experiences for patients and their families.

We want improved quality and performance, and a more enabled and motivated health workforce.

Historically I think it's fair to say that our health services have been built around the hospital's needs and not specifically around the needs of the people they actually serve.

We need to put the patient first again.

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 is better for patients.  But it is also essential to find new models of care for patients  in the face of worldwide health workforce shortages, limited resources, relentless demand pressures, technical progress and, changing scopes of practice.  

For the foreseeable future we face a number of very serious challenges and I'd like to talk about them now.   Most importantly, we face

• A serious financial challenge,


• A workforce crisis, and


• A pressing need for clinical leadership,

I'd also like to talk about how some of our best clinicians and health managers think we might fix those challenges in the Ministerial Review Group's Report. 

Since the election, the Government has been clear about its priorities.

While we are committed to the Primary Health Care Strategy - which needs work, we wanted to first focus on addressing the serious challenges that face our hospitals.

That was the message from the public at the election, and that is what we have been primarily focussed on during our first ten months.

We've been fixing our hospitals - concentrating on reducing waiting times for ED, elective surgery, cancer waiting times.  We are also targeting improved immunisation, reduced smoking, and CVD and diabetes.

The financial challenges to be overcome in fixing our hospitals and public health system are serious and several.

Health is about service, but it is also about resourcing these services.

The new Government inherited three serious financial challenges in Health, that together present a public health system that could be fairly described as on a track to financial crisis.

Firstly, we had the 21 District Health Boards reporting in November that they were providing around $160 million in health services , (also called deficits), that they were not funded for.

We have spent much of our first ten months trying to fill this gap of unfunded services. We are slowly filling this gap, in part with new money, in part by finding low quality spending and moving it to high priority spending.

Secondly, we have a system with capital requests from our DHBs, for buildings, wards and other capital items, for over $600 million and only a small amount of money available to fund them.

Finally, it didn't help matters that the outgoing Government had stripped $150 million of extra health spending out of the Health portfolio just before the last election.  This largely unnoticed cut has added to the pressure on an already tight financial position.

All this, in a time of unique international economic crisis, where there is a need for the country to live within its means to return our economy to growth.

This recession 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 has had to 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.

During the boom times the Government increased overall spending by around $3 billion a year. It gave Health about $750 million of that each year - that's around 25% of all new spending each year.

Because of the 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 - and has continued to get the same $750 million increase.

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

Next year the total new spending allocation for the entire government, because we are in deficits and have to borrow it, may well be limited to around $1.1 billion.  Maintaining a $750 million dollar share for health will be unlikely unless there is a significant turn-around in our finances.  So next year money in health will be even tighter.

So the good news is that despite the very serious situation we face financially, the Government has done all it can to protect the public health system in terms of adding resources.

But while we have done this, we have also taken the opportunity to try and improve the public health service for patients and health workers alike.

We also need to look at every way we can move resources from bureaucracy to front line services, and at low quality spending so we can put it into more important under funded services.

Too much of our valuable health dollars are going into administration and waste.

The Ministry of Health advises that our health system had - at last count  -157 committees, not to mention the vast monitoring infrastructure of 13 health priorities and 61 objectives, with an additional subset of 13 health objectives; a set of 10 health targets measured through 18 indicators; 25 other indicators of DHB performance; not to mention 4 hospital benchmark indicators assessed through 15 measures; and an outcomes framework with 9 outcomes, measured against 39 headline indicators.

We are determined to simplify this system, to minimise imposition on those who deliver at the frontline, and free up our Doctors and Nurses to do the work they are there to do.  

Which brings me to the most fundamental and important challenge our system faces.

 

The Workforce Challenge

The most fundamental challenge facing Health today is workforce, workforce, workforce.

We have an aging population, growing demand and competition from overseas for our nurses and doctors.  All that is placing enormous demands on our health sector.

Here are a few things to know about our health workforce.

It is getting older.  The average age of nurses is 45 and of doctors is 44.

It is also increasingly international.

New Zealand relies on overseas trained doctors and nurses more than any other country in the OECD and they are very mobile.

More than 40% of our medical specialists were born overseas.  More than half of doctors working in New Zealand come from overseas.  Many of our nurses were also internationally recruited.

Auckland University evidence suggests that the medical students most inclined to stay in the country and become GPs are New Zealand born.  Yet more than 40% of the medical students studying in Auckland were born overseas and a fair proportion leave quickly after graduating.

We are grateful and pleased to have international health professionals come here to work. But there is a global health workforce shortage and given that New Zealand lags behind the OECD in terms of our incomes we are not in a strong position to compete on the basis of higher salaries.
So we are largely dependent on foreign doctors and nurses and we face significant shortages in particular specialties as well as regions.  I think this audience will be familiar with which ones we're short of - there's quite a long list. 

The Health workforce shortage is so serious, and so international, that in many ways our workforce will increasingly define how services are delivered.

So what are we doing about this?

The long term answer in large part depends on stopping the decline in our average standard of living and wages compared to countries like Australia.

More immediately however, we have implemented important strategies. Firstly, the government has introduced a positive new Voluntary Bonding strategy. Its aim is to encourage young health graduates to establish careers in hard to staff specialities and communities in New Zealand.  It offers payments against graduates' student loans or cash incentives for those that do not have a loan for three to five years.

It has proven very popular.

We expected up to 100 doctors and 250 midwives and nurses to apply for the scheme but we have in fact confirmed around 115 doctors, 95 midwives and 680 nurses into the scheme.

We didn't want to turn anyone down.

The government is funding the extra applicants to the scheme with an extra $7.6 million over five years. If all extra applicants complete the scheme this will bring the total cost to $17.5 million a year.

This is one way to keep New Zealand's own front line clinical doctors, nurses and midwives, who we train specifically to care for kiwis, to work in the country that trained them.

But we also need to keep our health workforce happy - and engaged - and feeling valued.  Recent research says they were not happy, engaged and feeling valued.   

Over the last several years, there have been numerous reviews, reports, committees and studies on the health workforce.  Some have been useful to a greater or lesser degree and have contributed to where we are today.

But what is clear is that our workforce problems are worsening and after years of reports and indecision, decisions have to be made. We've inherited disjointed and uncoordinated resources in the health sector attempting to deal with serious and longstanding workforce issues.

A raft of health workforce reports over the years have been critical of this duplication and called for a coordinated national response to workforce issues but little progress was made.

Funding needs to be better coordinated both across programmes and providers.

There are few across-sector and across-educational continuum views, either operationally or financially.

For example, the undergraduate programmes for aspiring health workers are largely funded by the Tertiary Education Commission, which appears to have little accountability to the health sector in any way.  The subsequent education and training is variously funded, including by the learner, their employers, the Clinical Training Agency, and DHBs.

The Medical Training board was simply advisory. It had no control over the resourcing and funding.

The funding for post entry training is held in different places including around $120 million at the Clinical Training Agency in the Ministry of Health. 

Other resources are held at District Health Boards New Zealand.

Some of you may have read the recently released reports describing the situation for our health workforce and the need for  a major change in the way we plan and organise the training of our health workforce.

Well, we're doing that.

 

Clinical Training Agency Board

Last month the Government announced a new national health workforce training board to unify workforce planning in New Zealand. The Government wants better integration of health education and training with less duplication and clearer focus.

We have established a Clinical Training Agency Board that will be led by Professor Des Gorman, the Head of the School of Medicine at the University of Auckland. The Medical Training Board has been dis-established.

The CTA Board's purpose is to work with me to drive the rationalisation of the funding and planning of health workforce training, ultimately consolidating it within the Clinical Training Agency. It will operate from within the Ministry of Health until decisions on its longer-term placement are made.

Modern health care is about teamwork, and that is why we are taking a pan-workforce approach rather than separate training boards for medicine, nursing or allied health.

The CTA Board will be backed by the financial resources of the CTA budget, and the extra $70 million for the elective surgical workforce.  Their decisions and recommendations will have grunt.

Reports from the Senior and Resident Medical Officers Commissions agree we needed one single agency to ensure coordination of workforce training, planning and funding as nurses and doctors and other health professionals move along their career continuum in the public health system.

It is interesting what the most recent reports have to say.

The senior doctors said they felt undervalued and without influence on their working environment and how the health system works locally, regionally and nationally.  The SMO Commission report called for resources to support the participation of senior clinicians as leaders.

New Zealand's junior doctor workforce is also characterised by long standing dissatisfaction, industrial conflict and many poor training experiences according to the RMO Commission Report.

The Commission report paints a grim picture of a junior doctor's experience in our public health system and calls for immediate change. 

Junior doctors are our future, yet this report says they have felt undervalued and unsupported for years.  RMOs should be apprentices learning on the job but did you know some of them spend 80% of their time on the wards doing work you don't need a medical degree for. 

The report writers conclude District Health Boards and senior doctors need to take much greater responsibility for mentoring and pastoral care.

I know the senior doctors want to do that - but they need the resources and the time.

It is the intention that the new Clinical Training Agency Board will enable that to happen. It will oversee and drive the rationalisation of planning and purchasing of most of health workforce training, at the national level.

They will also take responsibility for improving pastoral care - as it were - of junior doctors.

After years of reports and indecision, decisions have been made.  Unified leadership and direction will make a significant difference.

But this is not the full answer to our workforce crisis; it is part of the solution but I am confident that New Zealand will be better placed to deal with its health workforce crisis as a result.

Workforce training, recruitment and development needs to be driven by the future needs of the sector, in particular the need for changing roles and practices to deliver improved models of care and service delivery. 

 

Clinical Leadership

Globally, clinical leadership and engagement is recognised as a fundamental driver for better health outcomes.

 

 

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.

This failure to fully engage the very people with the right expertise - doctors and nurses who know the patients' needs best - was seriously eroding their ability to provide patients with the care they needed.
Stronger and more direct clinician involvement means more service and better quality.

We trust and value our health professionals - enough to engage them in the very important decisions about the future of health services.

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 President of ASMS, Dr Jeff Brown, led 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.

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

We need better planning to improve the rate and availability of cardiac operations across the country and the best people to do that are the experts in this area - the heart surgeons themselves and their teams.

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.

Clinical leadership is the key to realising so much in health, including the Primary Health Care Strategy.

 

Primary Health Care Strategy

International research clearly shows that health systems with strong and vibrant primary care services have much better health outcomes for patients than systems which focus on specialist or tertiary care.  The costs associated with a primary care focus are significantly lower as well.

This government considers  the Primary Health Care strategy a bipartisan strategy. We are committed to it.

But it needs work.  Report after report concludes that after nearly a decade, many goals of the Primary Health Care Strategy haven't been realised -  apart from cheaper doctors' visits.

It is fair to say that over recent years the implementation of the Primary Health Care Strategy has not gone much beyond establishing 81 Primary Health Organisations and introducing higher GP subsidies.

Previous Labour Ministers of Health noted slow progress in getting primary and secondary services working together.  They also publicly stated that the strategy was failing to deliver the quality improvements potentially offered by co-located, multi-disciplinary teams, a wider range of services in primary settings or a strong and expanded role for nursing.

This National-led Government supports the Strategy and intends to move into a new phase of implementation with a far greater emphasis on action and results. 

I'd like to draw on a recent report by English academic Judith Smith from the Nuffield Trust. Smith has completed a well-considered "Critical analysis of the implementation of the Primary Health Care Strategy". Her conclusions will not be news to many in this room.

Smith noted that the Primary Health Care Strategy had reduced the cost of access to services but had not been able to lever significant change in models of care at practice and provider level.  In other words, the integrated, multi-disciplinary services had not eventuated to the extent intended.

Progress was further impeded by the lack of an overall implementation plan.  The failure to even succinctly set out the actual functions of a Primary Health Organisation is also cited by Smith as a key inhibitor of progress.  It is hard to imagine how organisations can be expected to operate effectively when their precise function has never been clearly set out.

Members of the public continue to struggle to understand the role and importance of the PHO system even though the vast majority are now enrolled with one.  This is quite understandable if the PHOs themselves do not have a clear idea.

Additionally, Smith identifies a series of fraught relationship - both within the PHO sector and across sectors - which resulted in fragmentation and slow progress.  PHOs still relate first and foremost to their general practice or community provider.  Consequently, clinical involvement varies considerably around the country. 

Smith also considers the funding system to be rigid with inadequate incentives to encourage the behaviours originally envisaged in the Strategy.  These factors combined to create a situation where there was more talk than action on many key aspects of primary care.

Smith also observes elsewhere there needs to be greater recognition that the success of the Primary Health Care Strategy is dependent on the engagement of general medical practice. You can't have primary care teams without GPs.

In the past, the relationship between Government and clinicians  has been fractious. But doctors' and nurses'  insight and perspective are crucial to understanding the key issues moving forward.  We are committed to improving this critical relationship.

In a crucial passage of Judith Smith's report she argues:

"What appears to have been missing from the Strategy implementation was detailed work with ‘mainstream providers' to explore how they wanted to develop (or were already developing) new approaches to service delivery and health promotion...  there does not seem to have been a concerted attempt to specify what the Government was looking for in terms of primary health care provision in return for significant new investment of public funds, nor to engage professionals in such a process of service specification and design."

In other words, implementation was frustrated by a lack of clarity and a lack of engagement and respect.

 

Next Steps In Primary Care

Addressing this is part of the motivation behind the Government's recent announcement calling for Expressions of Interest (EOI) from primary health care organisations capable of delivering larger scale change and a wider range of health care to their communities.

This could include initiatives such as more walk-in access, extended hours for primary care, more minor surgery, reducing the number of people showing up at hospital emergency departments and shifting some hospital services to the community.  It should promote new ways of working in co-located multi-disciplinary teams. Health professionals are in the best position to tell us how to make this work for patients. 

We are inviting primary care organisations to develop proposals which will be assessed by an expert panel later in the year.  The final decision on which initiatives to support will be made by the Director General of Health and implementation should begin in 2010-11.

The EOI is a very open and permissive request to help us take the next steps in primary care.

There is no better time for primary care to show individual District Health Boards how you can help Boards manage acute demand. There's going to be real pressure: shortage of workforce, shortage of capital, shortage of funding, and access targets like ED waiting times. This gives primary care an opportunity to step up.

The failure to move healthcare from secondary (hospital and specialist focused) to primary care in any significant way, despite its constant restatement as a policy objective, is one of the greatest puzzles of health policy over the past few decades, according to British Professor Paul Corrigan.

Prof Corrigan suggests that the lack of critical mass in general practice - small scale - has been the main barrier. Issues like capital, operating costs, and personnel prove daunting for any small business looking to change its configuration.

That's why we're promoting Integrated Family Health Centres. We don't own general practice so we have no authority to consolidate at will. But research demonstrates such consolidation built around co-location of multi-disciplinary teams improves patient outcomes.

Let's be clear. None of this will happen without strong clinical leadership. This is the time to step up.

 

Ministerial Review Group

The last major matter I would like to mention is the recently released report of the Ministerial Review Group. It was established as a first priority after the election to advise on how the public health service could be taken forward.

It is a quality analysis that has received widespread compliments, including support today from Dr Peter Davis.

The Report has around 170 recommendations, most of which are logical and widely agreed, a few of which are more debatable and focus on a proposed structural change to the Ministry of Health and the establishment of a National Health Board    

Amongst its most important recommendations is the consolidation of all our diverse IT, workforce and capital strategies into one central body.

There is also major emphasis placed on clinical leadership, workforce training, and clinical networks.

The Government has senior officials examining its conclusions over the next few weeks, with a goal of recommending what proposals should be advanced by the Government.

I can assure you that the Government will not agree to anything that increases bureaucracy.

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

 

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.

I have shared with you some of the strategies we have undertaken and plan to undertake, to address these challenges and to take our public health service forward.

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.

The Government is committed to a strong and enduring public health service. The Prime Minister, the Minister of Finance and I are all committed to delivering the best possible public health system.  It has been a pleasure to share evidence of that commitment with you tonight.