Opening Address to New Zealand Healthcare Summit 2010

Thank you for inviting me to speak at this Healthcare Summit. 

A little under a year ago, I spoke to the first Healthcare Summit, and I am pleased to see that this is now becoming a regular event.

I am equally delighted to see so many who are involved in providing and managing health care resources come together to discuss some of the key issues for the future direction of health care in New Zealand. 

When I spoke last year, I noted that debate about the direction of the health system is one of the great constants in a country like ours.

I also noted, however, that health care systems the world over are facing significant challenges, and New Zealand is no different.

On the one hand, there are the challenges imposed by an ageing population, an increasing demand for new technologies and medicines, and staff shortages, which place considerable pressure upon governments and health care providers to do more with less.

And on the other hand, an ever better informed and discerning public not only knows what it wants and needs, but also expects to get it.

We all want our health care system to achieve more than just meeting the challenges it faces.

The public expectation is that health care systems will be always improving, always doing better, always striving for excellence, no matter what the external circumstances.

People see the latest treatments being developed overseas, and expect them to be provided here.

In many senses, governments face an almost impossible task - reconciling the insatiable demand for services and the very real constraints on the resources to provide those services.

So, how this can possibly be achieved?

It has long been my view that the mechanism is via cross-sector collaboration and stakeholder engagement with a common strategic direction, while working within structures and systems that perform well together.

What that means in simple terms is that all players in the health sector have a role to play in identifying common objectives, and working together to achieve them.

We all have a stake in the ownership of the health system, so we all need to take some responsibility for making it successful.

Therefore, it is now more important than ever that key industry players, such as you here today, have a coherent, cohesive and strategic approach when working towards meeting the challenges facing our health care system. 

We need to acknowledge the parts of our healthcare system that are doing well; identify areas for improvement and work strategically towards making our system better able to cope with the demands we are facing now and in the future.

And we need also to recognise that while health care will more than likely continue to be predominantly publicly funded and provided there is an increasing role for the private sector, to supplement the work of the public health system, and in some cases to take on a primary responsibility for the provision of certain specialist aspects of healthcare.

Lest anyone suggest to the contrary, that is not intended as an ideological statement, but a simple recognition that in an increasingly complex and financially stressed area, partnerships between various providers to deliver key services, albeit under the ambit of a public health system, are simply inevitable.

UnitedFuture's Confidence and Supply Agreement with the National-led Government embraces the need for greater utilisation of the private healthcare sector to address the growing pressures on our health system. 

The establishment of a private sector liaison desk in the Ministry of Health, and the reform of the Protocols which guide District Health Board involvement with the private sector, are two big changes which will allow us to make smarter use of the private health system.

I also appreciate that it can be difficult for people, and particularly older people, to maintain private health insurance when their premiums increase. 

UnitedFuture campaigned on tax concessions to recognise the savings created by those who choose to have private health insurance. 

We were particularly concerned that older people who have often had private health insurance through their working lives feel financially unable to keep up the payments once they retire, and so we therefore proposed they should be able to claim a tax rebate on those payments from 65 years onwards.

I understand the National Party considered including a similar provision in its policy before the last election, but dropped it because of the deteriorating economic situation.

Nevertheless, the Government has agreed that, consistent with the broad provisions of our confidence and supply agreement, I should explore this issue in my capacity as Minister of Revenue and Associate Minister of Health, with a view to presenting a proposal for consideration later in the year. 

We all know the scale of the fiscal crisis the nation is confronting, and so naturally this is a difficult time to progress this issue, and I cannot say with any confidence that I will be successful, but   this is an important matter where I believe that change will be good for patients and our health system, so and I will continue to work on it

Overall, the Government remains committed to providing fair and timely health care to meet the needs of New Zealanders in a public service, so that health insurance is an optional extra. 

We are improving access to publicly-funded elective treatment services, such as knee replacements for example. 

Last year saw the largest ever annual increase in waiting list patients receiving elective surgery. 

A total of 134,763 patients had elective surgery, which means more than 12,000 extra people got surgery last year compared with 2008. 

The rate of elective surgery now being delivered to New Zealanders is exceeding the Government's target. 

The Government will continue to encourage and support district health boards to sustain this trend so that more New Zealanders get the hospital treatment they need.

While we have made considerable progress, there is much more to be achieved.

Elective surgery waiting lists are still too high, especially when compared with European countries, where waiting times are measured in weeks not months.

For its part, the Government will continue the work it has begun to reduce waiting lists and times for New Zealanders.

Where we can, we should not be afraid to learn from those other countries, and to adapt their successful solutions to our environment as appropriate.

When I spoke to you last year, I raised the idea of a comprehensive national health insurance scheme, as per the Dutch model.

While this is probably a step too far for New Zealand at the present time, it is worth noting that the concept is not totally foreign to us.

We have, after all, had a contributions based universal Accident Compensation insurance scheme working here for well over 30 years.

In a similar vein, I think there is still scope for greater collaboration between the public and private sectors to help further reduce elective surgery waiting lists, and for partnerships akin to the widely applauded Shepton Mallet project in Britain to be developed here.

Another excellent example of collaboration between the public and private sectors is the medicines system.

The Government is the major funder of medicines in New Zealand, although individuals and the private sector also make a significant contribution.

PHARMAC does an excellent job of ensuring we get value for money for what the Government invests in medicines.

And Pharmaceutical companies, prescribers such as doctors, and Pharmacists, all play a role in developing and delivering medicines to consumers.

It goes without saying that medicines make significant contributions to the health outcomes of many New Zealanders. 

So it is crucial that we do not make the mistake of looking at the use of medicines in New Zealand in isolation from the rest of the health care system.

For too long, in my view, we have viewed medicines as being at a distant end of the healthcare spectrum, rather than a critical part of the continuum of treatment and care.

It is no longer the case of if all else fails, medicate.

Medicines are increasingly an active treatment option, rather than essentially palliative or curative.

It was against this background that I pushed for the development of a national medicines strategy during the term of the previous government, and why I am delighted it has been embraced and given fresh life under the current administration.

Put simply, Medicines New Zealand - the New Zealand medicines strategy - arose from the need for a more coherent approach to the use of medicines within our healthcare system.

I see it as a vital cog in making sure New Zealanders get the most possible benefit from their medicines system.

By this I mean that:

• New Zealanders can access medicines that are safe, of high quality and effective
• that New Zealanders have access to the medicines they need, regardless of ability to pay, through the government funding provided
• that medicines are used in the best way possible to result in optimal health outcomes.

We have seen good progress in the medicines system since Medicines New Zealand was introduced, in December 2007.

This was reflected in the launch in April of an updated Medicines New Zealand Action Plan.

The new Action Plan summarises progress to date, and signals some priority areas.

I would like to take a bit of time to focus on these developments and priorities.

To begin with, the current Government has recognised the importance of investing in medicines.

An additional $60m has been invested over the past two years, which means that a quarter of a million Kiwis are receiving government subsidised medicines they wouldn't have got two years ago.

In the past year, PHARMAC has funded 13 new medicines and increased access to another 17 medicines, benefiting more than 105,000 patients.

And already this year PHARMAC has funded 11 new medicines and widened access to another seven benefiting an additional 150,000 patients.

The number of Government-funded prescriptions has risen by 1.5 million since Budget 2009, indicating that more New Zealanders than ever before are receiving funded medicines.

In the current economic environment, it is especially important that we get value for money from this investment, and the Government considers that PHARMAC does an excellent job in this regard.

This is reflected in the recent decision to extend PHARMAC's role into prioritising and procuring hospital medicines.

PHARMAC will engage extensively with clinicians as it picks up this role.

The Government has also signalled an interest in PHARMAC becoming more involved in medical devices, but this is a longer term project.

While the Government considers that PHARMAC does a good job, it remains a challenge to provide access to high cost, highly specialised medicines.

The Minister of Health recently received recommendations from an independent panel that considered how we might increase access.

It is clear from the panel's work that there are no easy answers, and that other countries are grappling with the same challenges.

As a start, the Government has announced that PHARMAC will be doing a thorough review of the Exceptional Circumstances Scheme.

People will be able to comment on questions of access, such as the current community scheme's eligibility requirement that a condition must have 10 or fewer people affected in New Zealand.

I know from the work I do how pressing an issue this is for many groups of patients, who, because they are small in number, and the medicines they require are expensive, often feel that their needs are insufficiently recognised.

PHARMAC and Medsafe will also be looking at finding ways to ensure that New Zealanders have access to a number of lower cost but specialised medicines that, for one reason or another, are difficult to obtain in New Zealand.

While we have a limited budget for medicines, and difficult choices will need to be made, New Zealanders need to feel secure that our medicines system is fair.

The key to achieving this is for PHARMAC's processes to be as open and transparent as they can be.

In my view, PHARMAC has made considerable progress in this area, over the last few years as I heard when I attended the PHARMAC stakeholder forum last October.

Attendees were much more positive about PHARMAC's stakeholder engagement than they were previously.

PHARMAC has achieved most of the actions they identified at the previous forum, in December 2007.

Some of the more notable achievements have been improving the user-friendliness of the PHARMAC website, publishing information sheets, inviting funding applicants to meet with PHARMAC at the beginning of the application process, and engaging with stakeholders as part of reviewing the Terms of Reference for clinical and consumer advisory committees.

These achievements are all changes I was looking for when I began work on developing Medicines New Zealand, and I want to acknowledge PHARMAC's responsiveness.

Looking forward, PHARMAC has identified further actions to progress from last year's forum.

Of particular importance will be the development of an application tracker, which will allow people to keep track of the progress of Pharmaceutical funding applications.

Overall, I consider that we have made good progress in achieving the objectives of the Medicines Strategy.

However, there is more to do, and we have refocused on some new priority areas.

Of vital importance is the development of a New Zealand Medicines Formulary, a reliable source of clinical information on all available medicines.

Already, we have launched the Universal List of Medicines, which will help to standardise medicines usage by providing a single medicines terminology.

We also hope to amend the outdated Medicines Act.

This Act is nearly 30 years old, and is no longer providing adequate safeguards to consumers, or facilitating innovative clinical practice.

In particular, this Government is looking to identify ways that Pharmacists and other health professionals might broaden their roles, where appropriate, including becoming more involved in prescribing, either independently or in collaboration with others.

In doing this, we will be very mindful of patient safety.

Coming back to my earlier point, while the Government has launched Medicines New Zealand and the Action Plan, I see this as a strategy of and for the health sector.

The strategy was developed with significant input from the sector, and many of the actions required involve not just Government, but also doctors, Pharmacists, Pharmaceutical companies and consumers.

All of you have a role to play, and I am pleased to say that this has been happening.

I welcome the increasing collaboration and co-operation between these various sectors, and am pleased at the part Medicines New Zealand has played in bringing this about.

More generally, we all have a role to play in getting the best out of our health system, which is why summits like this one are so important.

As part of our healthcare industry you have a role to play in cross sector collaboration, ensuring structures and systems work well and maintaining a system capable of meeting future demands.

Therefore, against that backdrop let me assure you of the high value I personally - and the Government generally - place on your skills and your contribution to the well-being of New Zealanders.

I wish you the best for this Healthcare Summit.