Hon Tony Ryall, Minister of Health:
Opening Speech to New Zealand Orthopaedic Association's Annual Scientific Meeting, Wellington, 19 October 2009

Thank you for this opportunity to open your Annual Scientific Meeting. A special greeting to your international guests and speakers. We know you'll enjoy the hospitality of our nation's capital.

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

This morning I'd like to touch on the financial challenges the world recession poses our health service, and then the role you as clinicians can play in helping the country deal with that. 

Financial Situation

The new government's goal is a public health service that provides "better, sooner, more convenient" health care for New Zealanders.

We are working to achieve this goal in the context of the worst global economic crisis since the 1930s. A decade of considerable surpluses in New Zealand has been replaced by a decade of deficits.

We are heading from a time when health spending went up over 8% a year, to a much more modest level of around 5%.

It is more important than ever that we live within our means while we try to protect and improve the public health service for patients and health workers alike.

Despite the recent encouraging news that we might be coming out of the recession, its impact has had such a profound effect on the national accounts. New spending 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 new spending in the 2009 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 could be even less than this year - perhaps around $1.1 billion. 

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.  In other words, next year's budget will be significantly tighter. 

Our goal is to move resources out of the back office and bureaucracy into frontline services.

For example, the government left unfilled and then scrapped 200 positions in the Ministry of Health, freeing up nearly $20 million of taxpayers money to support better frontline services in DHBs.

This is part of the success of the government's cap on public servant numbers: 200 positions gone, and nearly $20 million put into 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. 

Clinical leadership and engagement

Globally, clinical leadership  - the active engagement of doctors and nurses in how health services are provided -- is recognised as the fundamental driver for better health outcomes. Yet here in New Zealand over the past decade, the influence of clinicians on patient outcomes has been less than ever before.

This failure to engage the very people with the right expertise - doctors and nurses who know the patients' needs best - is seriously eroding our ability to provide patients with the care they need.

Recent research by McKinsey and Company based on 126 hospitals across the UK found a clear link between strong clinical leadership and hospital performance.

The researchers found that best practice operational approaches in hospitals had a positive impact on productivity, infection rates, readmission rates, and patient satisfaction. And finance.

But the real key to this success was the level of involvement of clinicians in running their hospital services. Stronger and more direct clinician involvement means more service and better quality.

And that is why the National-led government considers clinical leadership and the re-engagement of doctors and nurses in the running of healthcare as so important.

New Zealand's public health system needs better productivity, an adequate and well-settled workforce and improved quality.

Greater clinical participation in the running of our public health services is fundamental to improved staff satisfaction and quality improvement.

In fact, many clinicians tell me that improving productivity is a key route to professional satisfaction.

We must make it easier for people to do the work for which they are skilled and employed.

Working together

In the months ahead, there are three areas where we will particularly need your clinical leadership: getting better value for money from implant purchasing, sharing services between hospitals, and working more closely with primary care to improve both prevention and timeliness.

• Better value for money.

'Meeting the Challenge' is the comprehensive report of the Ministerial Review Group set up earlier this year to advise us on how to reduce expenditure on bureaucracy, improve frontline health services, and improve value in the public health service.

The MRG included some of New Zealand's best health sector professionals. Many of their recommendations have been well discussed in the sector.    

You make very important resources decisions everyday. And this has an impact on how much surgery you do.

The MRG reported huge gains can be made by improving co-operation and harnessing the power of bulk purchasing across the 21 DHBs. Improving how we purchase medical devices such as orthopaedic implants offers a real opportunity to free up money for more care, just as Pharmac has with medicines.

We are very keen to progress this work and its success will depend largely on your involvement throughout.

• Clinical networks.

With musculo-skeletal problems directly linked to increasing age, and with our population aging, long-term conditions such as arthritis and osteoporosis will rise significantly.

Clearly, a stronger emphasis on effective prevention will be needed and so will new ways of working and providing care to such people.

Workforce shortages are the greatest problem this government inherited in health. We see clinical networks -- where patients and specialists flow across various hospital boundaries to improve access -- as pivotal to resolving this challenge.

Experience in parts of Australia has shown that such clinical networks can sustain and improve services particularly in more provincial and rural hospitals. Also recognising that more healthcare services will be provided outside of hospitals, more of your members may have to travel between neighbouring hospitals and clinics, and in some parts of the country, even be appointed to two hospitals as sometimes happens now.

Similarly, we need your clinical leadership in developing new referral pathways that will free up specialist time elsewhere to allow you to do more surgery.

• Care closer to home.

The government is very keen to encourage the development of co-located multi-disciplinary teams in what we call Integrated Family Health Centres. We see a wider range of services being provided in the community, for patients, closer to home.

For example, some of your members may do their patient assessments and diagnostics in these clinics. And you may also work with your primary care colleagues to develop better referral pathways for patients.

An ACC funded project in Dunedin using specially trained GPs to do patient assessments found only 1-in-10 patients with back problems, and only half of patients with hip and knee problems, were referred to the hospital specialist after that GPSI assessment. Patients got their scans, care (such as physiotherapy), and/or surgery much sooner. ACC described this as a win-win for patients and the funder. And again, specialist time was freed up for more surgery.

These improvements cannot be achieved without active clinical leadership. This government is determined to re-engage clinicians in the running of the health service.

The tough economic times should be seen as an opportunity for clinicians to reassert themselves and their commitment to better service and quality care.

I would also like to take this opportunity to acknowledge the concerns of many of your members about ACC and its arrangements for orthopaedic patient claimants. ACC funded 7% more elective surgery this year over last year. Nick Smith advises me that ACC spending on orthopaedic surgery has risen considerably in the past 4 years. And the Minister is aware of your concerns about declination rates, and some communication issues between individual specialists and ACC.

We have inherited a financial mess with ACC. The spiralling level and cost of claims, and the underfunded levies, does mean ACC is becoming more stringent. Significant restraints on cost are needed to maintain the affordability of the scheme. I urge NZOA to maintain its dialogue with ACC over the coming months.

Conclusion

Finally, one of our main priority areas is to improve public hospital services and reduce waiting times for patients.

The Government has introduced a more focussed set of Health Targets designed to achieve the Government's goal of achieving ‘better, sooner, more convenient' services. The streamlined goals reflect the Government's desire to simplify the current complex and multi-tiered monitoring and reporting system.

Of the six Health Targets, three specifically focus attention on the urgent issue of excessive patient waiting times in public hospitals. We seek genuine reductions in waiting times for patients: shorter waits in emergency departments, more elective surgery, and faster cancer treatment.

The Government's strong emphasis on improving public hospital services reflects the public's priorities. This was the mandate and message given in the last election. Patients have waited too long for elective surgery, for emergency department care, and for cancer treatment. This must improve, and that is what DHBs are expected to put considerable effort into this forthcoming year.

We will shortly be publishing a national report card showing how well each DHB is doing meeting these targets. You will be able to see the progress your DHB is making, both against the priority targets and compared with other DHBs.

For the first time, the public will be engaged in monitoring the performance of the local health service. For those that are not achieving, their performance issues will be clearer as will our expectation that they can do better.

Thank you for the contribution you have made to the record number of elective surgery patients being treated in the past year.

Ladies and gentlemen, 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.