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Co-Operation Needed For Problematic NZ Health Care

10 April 2006

Co-Operation Needed For Problematic NZ Health Care

Southern Cross is advocating more co-operation between public and private health care sectors to combat rising pressures on the funding and delivery of health care services in New Zealand.

In a recent discussion paper, the country’s largest private health care organisation says the problems of medical inflation, increasing demands on services, an ageing population and the need to retain health care professionals are issues common to everyone in the health sector.

“Southern Cross’ belief and intent is that the private sector complements the public health system. We are not in competition with it, and greater co-operation between the two sectors would benefit all New Zealanders,” says Group Chief Executive Dr Ian McPherson.

“Greater demand for expensive health care services is an international issue, not just one that occurs in New Zealand. It’s driven by new medical technology and techniques - with their associated costs - that can enhance the quality of life for many people for much longer.

“We also know that at 65 plus, the age many people need insurance most, the drop-out rate from private health insurance rises and that burden falls on the public sector. Couple that with the population bulge of baby boomers turning 60, and New Zealand will face significant problems in delivering health care services of a standard expected by most Kiwis.

“We have also yet to feel the full impact in both the private and public health sectors of the deserved pay increases that were given to hospital staff recently.”

The paper, which highlights current and future health care trends in New Zealand, looks at ways to overcome health issues both for funding and provision. Potential solutions recommend a closer working relationship between public and private sectors and more clearly defined and targeted health spending.

“The public sector already clearly defines its role with Pharmac, which despite its critics, is an example of effective Government health funding and purchasing. There are clear and explicit criteria for what is (and what is not) funded. Pharmac has consistently demonstrated an ability to constrain medical inflation. By international comparison, New Zealand has performed exceptionally well in controlling drug cost inflation and this experience could be applied to other areas in the health sector. As a result of Pharmac, New Zealanders know what the public purse will pay for – even if they don’t always agree where the line is drawn.

“This model could apply to surgery. Then the role of Southern Cross insurance and hospitals would be clearly defined. If the Government was clear about what health services it can realistically pay for, New Zealanders could then make informed decisions about which health services they need to take personal responsibility for.

“The current system does not allow New Zealanders to assess whether or not they should rely on the public sector, start saving for private surgery or take out health insurance. This must be clarified.

“At least say, like Pharmac, what the public sector won’t provide or fund – then the private sector can better complement.

“Co-location of hospitals is another good option, where a private hospital is built on existing public hospital land. The DHBs are able to achieve a financial return on vacant land, share expensive facilities and attract high calibre surgeons to their locations. The surgeons in turn are able to do private operations on-site. Both public and private hospitals can hugely benefit from the co-sharing of expensive resources, facilities, services and equipment.

“The pressures currently being placed on our health system, both public and private, are only going to increase. It is up to all involved in the health care sector to use our combined resources and work together to meet and manage those pressures.”


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