THE MERCK SHARP & DOHME LUNCHEON

WELLINGTON TOWN HALL

Good morning. Thank you for that introduction and for the invitation to be here.

Today I want to talk about health policy and health politics.

I will treat the two separately because I have come to see that they are two quite different things.

It is the policy that matters most. It embodies the relationship between the government and the people for whom we have a public health and disability service - those who are sick or those whose sickness we can prevent, those who have a disability and require our support.

I am talking about the 40,000 men, women and children who will visit a GP on a typical day - the 7000 who will visit a public hospital outpatient clinic, the 1400 who will be admitted to a public hospital. They are what health policy is about, they don't feature much in the health politics of recent years or recent weeks.

In fact, health policy is debated less today than it has been in the last decade. I believe this is because there is a wider consensus on policy direction than there has been for a decade.

I know some of you might comment that there is lack of consensus within the government, which is causing confusion in the health sector.

Today I want to put that perception in the context of the Coalition Government.

I will talk about the Coalition Agreement - what it says and what we've done; some of my working principles as Minister; the reality of what is happening in health and what that means for the government and the patient and, lastly, where good government sits in all of this.

I am not going today to cover rationing and funding matters, not because they aren't important but because it is the coalition issues which are current.

My job, as Minister of Health, is to implement government policy.

This might seem obvious. But one could be forgiven for thinking the coalition health policy had been overwhelmed by coalition health politics. It hasn't.

The fact is we have been getting on with the job and implementation is well underway.

The Coalition Agreement has several major planks, and I support them. I will remind you what they are:

Most importantly the Coalition Agreement expresses the Government's commitment to a public health system, and to the values it embodies for New Zealanders. The emphasis on non-profit in the agreement has wide support in the health sector and among the public. People will trust the system if they believe the decisions, whatever they are, are made for the right reasons.

The agreement specifies better cooperation and collaboration, it emphasises achieving better health rather than making a profit, and it seeks a way of paying for health services that encourages more integration and less fragmentation described as funding rather than purchasing.
There are four major policy changes. These are free doctors visits and prescriptions for children under six, a move to a single national funder to replace four RHA's, abolition of user charges in public hospitals and turning CHE's into non-profit organisations.

These changes are significant because we are talking about just under $6 billion of public money and New Zealand's largest and most complex service sector

Then there is a major policy review in consultation with the health sector.

So how have we done so far?

We have implemented the policy of free GP visits and free prescriptions for children under six successfully and on time. It was also achieved largely without the traditional battle with the doctors, which no government has succeeded in before.

The Transitional Health Authority started business on 1 July, while the four previous RHA's were in the middle of spending $5.8 billion of public money. It is a tribute to the staff and the leadership that they have not lost concentration even while their organisations have been dissolved.

In the Budget, hospital part charges were abolished and health was allocated roughly the additional funding laid out in the Coalition Agreement.

CHE's are to become non-profit organisations. Reading their balance sheets, as I have cause to do rather more often than is good for my morale, one could say they've been non-profit for some time.

However, the process of making that official lies ahead of us. We are on track to officially implement this policy by 1 July next year.

In addition, we have also successfully completed, on time, the policy review promised in the Coalition Agreement, under the name of the Steering Group.

I'd like to dwell on this for a moment because it is a crucial link between the coalition policy and the health sector.

We need to remember the Coalition Agreement was negotiated without broader advice or consultation, and at the time a wider discussion with the sector was regarded as necessary.

The Steering Group was a unique vehicle for that discussion and further policy development.

It included 13 people from right across the health and disability sector - people appointed with the agreement of both coalition partners. The group included people from the whole spectrum of health politics.

This was not a group of bureaucrats - it was made up of people who have to make the system and the policy work every day.

The document they produced was remarkable for the consensus it represented.

So to re-cap, to date we have implemented all the policy we promised and some ahead of time. These policies have been welcomed in the health sector and have represented real opportunities to build a better public health system.

I want to make it clear to you that I do not see the Coalition Agreement as a radical prescription for the public health system.

The document itself says its policies are to be implemented with as little disruption as possible. This, though rarely quoted, represents the overwhelming desire of people in health.

By that I mean that people want a reasonably stable framework, so they can get on with the job of actually improving health services

So we are set to ensure change occurred by evolution rather than revolution. Any change must build on what works, and solve the problems that are widely understood. We don't intend to throw things out in pursuit of some political fundamentalism, or a belief that everything that went before was wrong.

I also know that to do this successfully we need the help of the thousands of professional and skilled people who work in health. Their views matter, and whatever is in the agreement, we must also listen to what the health sector tells us will or won't work.

The Coalition Agreement was hatched in a particular, perhaps peculiar, set of circumstances where only two political parties were ever at the table, and their main aim was to secure government.

It's my job to articulate health policy.

I have to do that not just in terms suitable to the coalition partners, but also in terms which reflect the reality of the work of thousands of people providing publicly funded services, and the three million people who use those services.

I want now, to summarise some working principles for health that I have set out in more detail in other public statements because they do reflect the reality of the public health sector for New Zealanders, not just the health politics.

They aren't in the Coalition Agreement but they help to bridge the gap.

Firstly, we want to organise services around the patient. Patients should not have to try to blindly find their way through our services.

Secondly, we can greatly improve health services with no extra money by building better relationships between the participants in providing care. I am talking about the hospital and the GP, the Plunket nurse and the district nurse, the rest home and the pharmacist.

They might have different jobs to do and different funding for doing it. What they have in common is the people and the community they serve - and that's more important than anything else.

Thirdly, we are looking for local solutions to local problems.

Effective health care is often about knowledge of local social conditions and community habits, as well as long term local relationships.

What works in Khandallah doesn't necessarily work on the East Coast and it's time we developed the flexibility to be able to treat them differently if that's what will work best.

Finally, clinical and financial decisions are best made by people with good reasons to get them right. In my experience, that generally means those closest to the needs.

This means more control and responsibility close to the patient and the community.

These principles don't amount to a grand and different vision, they simply describe the direction of the quiet revolution that is going on right now in health.

More and more people are working together across traditional political and professional boundaries because they recognise that what they have in common is more important than their differences.

What they have in common is the patient and the community they serve.

While the health sector needs to understand health policy, and needs that policy to be stated clearly, the Government cannot be blind to the reality of what is happening in health.

The activity of bringing different pieces of the health jigsaw together according to the principles I have outlined puts pressure on the government in political and practical terms.

It does so politically because the Coalition Agreement has the flavour of a static approach to the public health system, a set of changes and rules once and for all.

We are implementing those parts of the agreement that it is the Government's job to implement. However I have no intention of allowing the agreement, or the politics around it to interfere with the progress we see every day in integrating and improving services.

My job is increasingly about how to open up the public system to the winds of fresh ideas and new ways of doing old things.

More and more, my job is about how to adapt the funding system to provide the right incentives for the best care, to overcome fragmentation of services, to get people to work together where it's beneficial, and to compete where that's beneficial.

My job is to build on the gains for the benefit of New Zealander's health within the financial constraints that we have to operate within.

The direction we are setting asks of government two things government really doesn't like doing.

The first is to admit that whilst a great deal has been achieved and is every day, our traditional health services have sometimes failed those who are most in need of it.

These failures are well documented, mental health, Maori health and the health of our children. People with disabilities have also sometimes struggled to have their legitimate needs recognised and met.

The second is to ask government agencies and Ministers to give up the control and power they have always been used to so we can do something significant about these failures, as well as meet public expectations about the quality of or service.

Public agencies are a crucial part of the health system, but in future they will work with others, rather than remain sufficient unto themselves.

If a community group does a better job of providing health services in a small town, then I will support them. If an iwi can do a better job of providing health services for Maori, then I will support them. It matters less whether or not they are regarded as private.

If a trust does a better job than the CHE of providing mental health services in the cities, then I will support that trust.

If the CHE can do a better job by working with any of them at any level, then they should do so. If these groups, public and private, want to find formal ways to work together, then the Government should respond with better contracts or shared control of budgets.

Demographics are changing. Technology and public expectations are always changing. Whether we like it or not we have financial constraints on our health spend. So policy has to be dynamic if we are to deliver the best services for patients.

Traditional health politics is predicated on the idea that the Government and Ministers will drive change and service development.

I want to leave behind improvements in the public health system which stick. This will only happen if changes are inspired by the real needs of people and their communities, and instituted by them and the people who care for them.

Changes which rely purely on political will, will last as long as it takes to get a new minister. Some of you will have seen a few of those.

The patient and the community matter most. The institutions, the politics, and the political agreements are there to serve them and are not ends in themselves.

So to everyone in the health sector I say, you have a crucial role to play in changing our health services for the better - we want to harness your values, your commitment and your ideas.

Do current health politics reflect this way of seeing the world?

I think not, and I think that is obvious.

The example that may spring to your mind just about as quickly as it sprung to mine is the South Island cardiac unit.

That issue was so hamstrung by conflicting interests that it had dragged on for 23 years. And the conflict was not all about what was best for the patient. No, it was more about historical institutional and professional patch protection, parochialism and election promises.

The new Coalition Government inherited that potpourri of conflicts and made its decision on the future shape of cardiothoracic surgery in the South Island.

It is my job to implement the Government's decision.

In line with that decision, I will soon issue directives to cancel the previous tender round so the new joint venture can be implemented.

There are potential legal costs which the Government has taken into account throughout the negotiations and more certainly, there are real other additional costs involved.

These extra costs are costs on Vote: Health. They may well mean cuts elsewhere. As the MP from the south where CHEs are facing real revenue reductions, I have cause for anxiety about those health dollars being spent when they won't buy one extra heart operation.

But my main concern is getting the service up and running as soon as possible now that we have the parties working to that end.

I want to say today to a health sector that looked on in amazement - it won't happen again.

The process was far too politicised and unpredictable, and the outcome makes the best of a bad situation. As Minister of Health I have to take some responsibility for the uncertainty created by the events around the cardiac decision and I can assure you it is the last time, not the first time.

Media coverage of this and other issues has characterised the tension around them as either simply a personality difference or as an unresolvable policy difference.

In fact it is neither.

It is more to do with dynamics of a new Coalition Government.

A Coalition Government must work on agreement. In the coalition there are plenty of policy areas where there are likely to be different views. For instance Maori policy, superannuation, tax and health.

Under MMP it will always be necessary to find ways of making decisions across a wider range of views because as long as we coalitions form the government, they will have secured the support of 50 percent of voters rather than the traditional 37 percent.

In health I can say that, if measured by the substance of health policy implemented, rather than the perception, we have shown an MMP government can work.

Compromise is acceptable, even desirable, as long as it occurs within limits and it is my job to ensure there are limits within which the health sector can expect with some certainty how decisions will be made.

I cannot accept that we should do everything we can agree to do, or that everything in health policy should be determined by the political requirements of one or other coalition partner.

For the Government to function in a way that is credible, and makes sense to the sector, we must adhere to principles of good government.

My concept of good government is government that adheres to principles of collective responsibility, it seeks to provide certainty and clarity, it keeps an open mind to listen to the people who are affected by its decisions, and it listens to the people who work for the government to solve the same problems politicians want solved.

Good government starts and builds on personal integrity. Good government is accountable government. It is concerned with probity and transparency.

In health, where we spend almost 20 percent of government revenue, it is essential we always apply these principles.

In the end the Coalition Government, and I as Health Minister, will be tested on our commitment to the health of its people, and its competence in delivering.

If we don't apply these principles then the health of our sick people becomes hostage to the political requirements of the day. I am determined not to allow health policy to become a slave to the coalition's political needs.

The political static in these first 6 months of MMP are about finding the balance between the need for political cohesion, and the need for good government.

Our health policy, and the aspirations of the health sector can not be hostage to this process.

Getting health services right for patients is more important than who is public and who is private, where the ideas came from, who is seen to be winning and who is labelled the loser in Wellington.

Coalition government is new to New Zealand, but it isn't an excuse for bad government.

If we implement the main planks of the coalition policy, and follow the principles I have outlined, we will make considerable progress towards a better health system.

The ultimate political test is the same for us as it is for any one else providing a service - did it work for the people using the service, were they satisfied, can we do it consistently, can we do it better.

It's not what we say about the public health system that matters - it is what the public say. And sometimes what they say can be hard to take.

Recently I was heading south on business when I was advised of a sudden death in my family.

While I was sitting in the plane at Dunedin thinking about this, a man confronted me to say his wife was being flown by helicopter to Dunedin from Christchurch for an emergency heart operation.

He didn't know if she would be alive when she got to the hospital.

This man and his daughter were quite distressed. They berated me at some length in front of other passengers, finishing off by saying: "Thanks Minister for all the bloody politics - I hope you'll feel good if my wife dies".

Perhaps because I was distressed myself, I forgot to explain to them the importance of political branding.

The direction for the delivery of health services is clear - organise services around the patient and the community, build relationships with the other people who look after the same patient and the same community, look for local solutions to local problems, and get clinical and financial decisions made closer to the needs.

We have an exciting time ahead, and more opportunity to do a better job than we have ever had.

Perhaps there is a choice. We can pull up, stand still, look back, and argue the point. I'm for moving on, rattling a few more cages, solving some problems, taking some risks, backing some innovators.

People matter more than politics, and no amount of column inches beats hard work, good will and a better deal for people who need a public health system. So let's get on with it, and stop the nonsense.

Ends