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Health Insurers Raise Interesting Challenges

Health Insurers Raise Interesting Challenges But Miss Boat On Solutions

“Health insurers are to be commended for raising some interesting challenges and encouraging debate but unfortunately they miss the boat on solutions,” said Mr Ian Powell, Executive Director of the Association of Salaried Medical Specialists, today. Mr Powell was responding to the Health Funds Association’s report, The Long Term Funding of New Zealand Healthcare, released today.

“The report fails to sufficiently appreciate that much of increased health spending in recent years has been focussed on attempting to increase service provision for unmet need and the capacity or resources necessary to provide these services, both in primary and secondary care. Much of this spending is in response to earlier years of neglecting the public health system’s capacity needs.”

“The report relies too much on unreliable data on productivity. It uses data that excludes the majority of health service activity in areas such as outpatient clinics, services for chronically ill patients, mental health and primary care. The data also fails to recognise that data is no longer collected for some treatments and procedures because of improvements in technology and skills. Ironically, the more efficient a treatment or service becomes, the less likely data will be collected.”

“The report’s expectations of the private sector’s role are excessive. Much of the problems facing public hospitals are caused by shortages of doctors and nurses. There may be an abundance of facilities and bed capacity in private hospitals but they don’t have an abundance of doctors and nurses.”

“A major risk of the report’s recommendation of increased private sector and health insurance involvement in public hospitals is increased but unnecessary bureaucracy and transactions costs. It also risks creating perverse incentives for preferential treatment and cream-skimming.”

“More effective solutions include better coordinated workforce planning, and significantly increased doctor and nurse involvement in decision-making over how services are developed and how resources are utilised and allocated in order to ensure greater accessibility for patients.”

“While the report is an interesting and challenging read, too much of it relies on adapting the failed market experiment of the 1990s for a solution. Been there, done that,” concluded Mr Powell.

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