Health Minister's speech to ASMS Annual Conference 3 Dec 09

Health Minister, Tony Ryall's speech to the Association of Salaried Medical Specialists (ASMS) Annual Conference, Thursday 3 December - Wellington

Thank you Jeff Brown.

Good afternoon ladies and gentlemen, members of the ASMS.

It is a pleasure to speak to you today as part of your annual conference. 

It is not because of a desire to win applause that I want to acknowledge the huge amount of expertise and leadership in this room. 

That is a statement of fact, and of potential.

As senior clinicians you have the ability to make change happen.

You are among those key people whose contribution and knowledge is vital to achieving the high performing, high quality health system New Zealanders want.

This is a challenging time for New Zealand, and for our Health service. But it is also an exciting time to be in Health.

When I spoke to you last, the new National Government had just been sworn in, and with the one year milestone recently achieved, you will allow a very brief reflection.

The new Government inherited major challenges - shortages of doctors and nurses, growing waiting lists, wasteful bureaucracy, and years of record spending on Health with often little proportional improvement.

There have also been new unanticipated challenges. During the winter, Swine Flu hit fast and the pressure went on - especially on those working in public health and in EDs and ICUs. I'd like to thank all those health professionals for their commitment, hard work and good planning that helped NZ avoid the worst scenarios that could have easily overrun the health system.

Progress on Achievements

The new Government moved quickly to fulfil election commitments and begin the change process we believe is necessary to create a more efficient and productive public health system.  

We've always said the number one challenge facing health was workforce, workforce, workforce.  This challenge will take years to address comprehensively, but despite the tougher economic environment, such is the fundamental importance of making progress, several positive initiatives have been resourced.

The new Voluntary Bonding scheme is up and running with nearly a thousand graduate doctors and nurses and midwives enrolled and working in hard to staff specialities and communities.  

Starting next year, we are funding 60 extra medical student training places, which is phase one of the Government's commitment to train an extra 200 new medical students per year by 2013.  

As well as this, 50 extra GP training places have been funded.

$70 million will be invested in additional training and education to staff our new dedicated elective surgical theatres.

And, less headline grabbing but probably most important, the new Clinical Training Agency Board has been set up to unify the disjointed and uncoordinated system of addressing the country's serious and longstanding workforce crises.

It will ensure nationally coordinated training, planning and funding of workforce issues. 

We've also focused on capping growth in the health bureaucracy.

This is not a slogan. 

Management and administrative staff grew by 25% in the past few years.   This takes up valuable resources that can be used to deliver actual health services.

As an example, the Ministry of Health grew rapidly to 1600 equivalent fulltime positions.

By capping the Ministry's growth and removing around 200 vacant positions there, we've been able to move nearly $20 million from administration to the frontline.

Hospital productivity is crucial and we need to get more from existing resources. 

There's been a lot or work done in this area. We must keep up the momentum.

The annual number of elective discharges increased from 118,000 discharges last year to 130,000 this year - that's a record increase of 12,000.

Thanks to those of you who actually delivered these operations. That's around 10,000 more New Zealanders getting elective surgery, happier and healthy people than what New Zealand had been averaging.

A third of this happened under the last government - but the majority occurred under this Government after we made it clear to DHBs that we are totally committed to trebling the average annual increase in elective discharges.

We also explicitly focused on discharges - on patients - but this increase in discharges has not been at the cost of a reduction in the complexity of cases.

While our focus was publicly declared to prioritise addressing the state of our hospitals, we have increasingly turned our attention to making the primary health care strategy work.

Most people agree the principle of this strategy is fine - but little has been achieved in primary health care apart from cheaper GP fees and the creation of PHOs.

Even with these achievements, there have been some interesting arrangements recently reported, such as PHO cash reserves of many millions of dollars. It needs to be considered whether this is optimal use of scarce health dollars, and this Government's wishes to get more frontline services for health dollars. 

Recently the Government selected 9 proposals, out of more than 70 proposals, from a variety of health partnerships which we expect will see the start of large scale change in the configuration of primary health services and models of care next year.

These proposals were selected through an Expressions of Interest process, where primary health care organisations were asked to tell us of their ideas to deliver larger scale and a wider range of integrated health care to their communities.

Ultimately, the initiatives will lead to people getting better access to a wider range of health services closer to home.

And we recognise that the clinicians and health professionals are in the best position to tell us how to make this work for patients.

This will include establishing Integrated Family Health Centres.

Integrated Family Health Centres enable people to go to one location and, for example, maybe see a GP or nurse without an appointment, have a blood test or an X-ray, see a physiotherapist, have a first specialist assessment, or visit a pharmacy for their prescription, even have minor surgery - all in the same building.

We need to keep New Zealanders well and out of hospital and we need to make the system work better so that Kiwis can get faster, more convenient health care that is closer to home.

The necessary changes are happening across the Health sector, but it is progress made despite a serious economic constraint that will be with us for years to come. 

Because one of the most difficult challenges we face in Health, as in every area now, is money.

Health is all about patients and services, but our services are constrained by the resources the country has available.

Financial Situation

I have said publicly before and to your executive that it is this Government's goal to demonstrate it can be trusted to protect and grow our public health service.

Given the public hopes and expectations of our public health service, that has rarely if ever been achieved by any Government of either persuasion. And it is going to be an even greater challenge for this Government, in the current economic environment.

As you know, in 2008 the world's economies fell into the worst recession in seventy years.

The impact of that will be with us for at least 5 to 10 years. Probably longer.

When there's a global economic downturn, the impact on a country's tax revenues takes some time to be fully felt - over 12 months. 

That impact on tax revenues is hitting us now - and it's hitting hard.

A very short time ago we had a booming economy, growing tax revenues and multi billion dollar surpluses.

Now we have $6 billion annual deficits. 

The Government is borrowing $250 million a week just to maintain public services including health.

Financial forecasters say we face deficits and large scale borrowing for many years to come. 

When the global financial crisis started to hit, in June 2008 the New Zealand Government's net debt was low at around 6% of Gross Domestic Product - the benefit of 20 years of a focus on reducing debt. 

That meant we had greater ability to go further into debt in tough times, to borrow money over the next five-plus years to protect our social services such as Health.

To protect these social services, including Health, the Government is borrowing around $40 billion over the next 4 years. As a consequence, however, it is projected that our net debt will grow hugely - from 6% of GDP at June 08, to 30% of GDP by June 2013.  

Some other nations don't have the same flexibility, and there are dramatic decisions having to be made.

For example, in Ireland it is reported the Government is considering laying off thousands of health workers and cutting up to 1 billion Euros from Health expenditure.

Many hundreds of back office and frontline jobs face the axe in a number of Australian states to reduce duplication and make savings. 

In the UK, the National Health Service health resourcing is under huge pressure.

Times are very tight.

In New Zealand, in the last Budget, Health secured half of all new spending. That was $750 million - half of $1.5 billion.

The thirty or so other government departments and agencies had to share the other half. 

It is clear Vote Health will not get an increase of the size it got last year, because the total new spending is $1.1 billion, compared with this year's $1.5 billion.

You can be assured I am in there fighting for the best allocation of resources for health possible.  (I have never bought the Minister of Finance so many cups of coffee).

The Government is committed to a strong and enduring public health service, and we will be borrowing money to ensure Vote Health is increased.

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 need a sustained and real examination of the value of every health dollar spent so we can free up low quality spend for higher priorities such as at risk services and training more staff.

Determining those priorities will be the one of the roles of the National Health Board, which I will talk about shortly.

Achieving value for money is vital to ensuring we have sufficient resources to meet other health priorities. 

National Health Board - members

With that in mind, the Government commissioned the Ministerial Review Group report earlier this year and more recently - on the report's recommendations - announced a major shake up of Health administration.   

I am advised this should save up to $700 million which will be shifted into front line services.

When you hear of service changes, always know that the motivation is to move resources into higher health priorities. All savings stay in health.

Yesterday I announced the membership of the new National Health Board, within the Ministry of Health, that will be at the centre of our public health service planning.

Clinical leadership

It is the Government's firm belief that strong clinical leadership and engagement is essential to improving our public health service.

It is not rhetoric. It is accepted as a basic tenet of our future.

Last year, and previously, I have committed to you that I would have clinicians much more involved in leadership roles in health decision-making.  In this vein, we changed the rules governing election to the Medical Council to favour direct election of some members by doctors.

The Government is committed to following this track.

The Government wants 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.

That is why we have included so many people with clinical experience in the National Health Board.

Eight of the ten new NHB members announced yesterday have clinical backgrounds - five doctors and three with nursing experience. 

These people have not been appointed as partisan representatives of their sectors or interest groups.  They were appointed for their background, their skills and personal experience - either financial or clinical or both. 

They will provide the expertise we need to give the Ministry of Health a clearer focus on working with District Health Boards on improving services for patients.

They will guide better coordination between District Health Boards and the Ministry of Health.

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

To assist this, I have started cross-appointing board members and this will continue.

National Health Board - responsibilities.

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 new NHB will provide more focused national supervision of the $10 billion of public health funding the 21 DHBs spend on hospitals and primary health care.

The NHB within the Ministry has already started pulling together all those units and sections and staff currently fragmented 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 medium 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 optimal.

Take Information Technology as an example. Currently we have 21 DHBs with large IT budgets, often only working together sporadically on a project by project basis. 

That is why, in large part, we have made such little progress in fundamentally important IT areas such as interconnectivity between primary and secondary care, and electronic communication between DHBs. 

Consolidating IT is a major step forward and has near universal support, but 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, they have not been well enough connected.

Graeme Osborne and Des Gorman as leaders of IT and Workforce respectively sit on the National Health Board to directly feed their expertise in to the planning and oversight of the $10 billion of services that DHBs deliver to New Zealanders.

This will lift the quality of planning and decision making.

The strong clinical experience on the Board will also significantly influence decisions about improving vulnerable health services.   

 The NHB will have national responsibility for critical tertiary health services such as paediatric oncology, clinical genetics and major burns. 

Clinical networks such as the national cardiac surgery clinical network, coordinated by Dr Hamer, will play a large part in supporting and guiding these services. 

Clinical networks will also be a key vehicle for improving regional collaboration.

Clinicians will have a strong role in better coordinated and integrated service planning and decision making across all levels of the sector, locally, regionally and nationally. 

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.

Cabinet has instructed the Ministry of Health to report back to Cabinet by the end of the year on a number of MRG's other recommendations.

This includes the recommendations to establish a separate Quality Agency, to expand both PHARMAC and MEDSAFE's remits to include the prioritisation and procurement of medical devices, and that prioritisation of new health technology and interventions be implemented through the National Health Committee.

The changes are about making the current system work better - it is about filling in the missing links that have restricted national and regional cooperation in our public health service for years, and led to too much duplication and constant reinvention of the wheel in the 21 DHBs. 

The health sector is ready for change. And that change must be good for patients and good for health.

Conclusion

Thank you for giving me time to share these matters with you.

As your President said earlier, it is a time of major challenges. But it is also a time of opportunity and clinical participation.

This Government, and I as the Minister of Health, are being up front about the challenges confronting our public health service.

I want you to be very clear that this Government wants to work with you, values your contribution, and has demonstrated its commitment to vastly improved clinical engagement.

Over today and tomorrow, you will be considering your plans as an Association.

It is my real hope that we can work our way together through the challenging next 24 months.

When you think of the changes that are happening, the future holds real potential for our public health services.

Given the dedication and commitment of the New Zealand health workforce, I have absolutely no doubt the future of our public health service is very positive.

I refer to the National Health Board, its role, and the talent deeply involved at the core of planning our public health services.

I refer to the capacity for improvement of our public health service, through the greater involvement of clinicians.

I refer to the gains to be made through better DHB collaboration and use of clinical networks.

And these with a Government that is committed to protecting and growing our public health service.

Thank you for your time.