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Ryall: Speech to NZ Private Hospitals Ass'n

Tony Ryall MP National Party Health Spokesman

18 August 2006

Speech to NZ Private Surgical Hospitals Association, Duxton Hotel, Wellington.

How well do you think the New Zealand health system delivers elective surgery? Here is a sobering assessment from a source that claims to be authoritative:

The assessment reviewed progress in getting on top of New Zealand's waiting list crisis. According to the report's authors 'the current situation is still unacceptable from a patient access and public confidence point of view'1.

The report listed the greatest concerns as: -- a significant number of patients in need of help most are not receiving their procedure within six months -- in some urban areas (notably Auckland) the level of publicly funded service is not sufficient to ensure reasonable access to electives - consequently patients are in a state of significant distre
ss, ill health, or incapacity before being provided with the procedure -- 30 percent of patients are waiting longer than six months for a first specialist assessment -- the public has considerable anxiety about the public health system in general due to uncertainty about the availability public hospital elective services -- large numbers of patients are in preventable distress because they do not know when they will receive their procedure or operation. It sounds a fair and unsurprising assessment. What will surprise you is the author.

'Reduced waiting times for public hospital elective services - Government strategy March 20002'. Yes, that was the Labour Government's view. And since then things have got much worse. Back then the Labour Government said: Elective services are important for improving peoples' independence and ability to participate in the activities of daily living.

Reasonable access to electives services is also essential to ensure public confidence in the public health system as a whole3. Back then Labour was promising to increase the supply of elective services. 'Increasing the supply of elective services, particularly surgery, is integral to reducing waiting times4' they said ... back then.

Back then Labour promised to give patients more certainty about their futures. They promised to build the capacity of hospitals to provide more electives. And they promised to have the primary and secondary sectors work closely together to provide care. Shortly after the election Dr Brash indicated that as the government-in-waiting we in National would widen the breadth of issues we focus on this term beyond the key five policies of the 2005 campaign. Dr Brash has given me three tremendous associates.

These new MPs are learning fast and collectively are making a strong impression at Parliament. Jo Goodhew MP: Mrs Goodhew's previous roles included working as a registered nurse in general practices and hospitals and as a tutor in Health Sciences at the Aoraki Polytechnic. Jonathon Coleman MP: Before entering Parliament Dr Coleman combined advisory work in the healthcare sector with clinical medical practice. Jackie Blue MP: New Zealand's first breast physician, Dr Blue was an elected member of the Auckland DHB before last year's general election. As we have traveled around New Zealand we've spoken to doctors, nurses, pharmacists and most importantly patients. The public knows the facts are clear. Labour's policy has failed utterly. Despite spending an extra $4 billion of taxpayers' money on Health, there are fewer operations than six years ago. Despite all the money, all the strategy documents, all the spin, fewer New Zealanders are getting surgery.

The result of fewer operations with a growing population, is the burgeoning waiting lists and waiting times. As the OECD points out longer waiting times - and by extension Labour's waiting list cull - have a detrimental effect on patient welfare. Health status is likely to deteriorate (on average) with patient welfare lower the longer the wait for surgery5. Minister Hodgson told the public in June that 'The number of New Zealanders receiving elective procedures has increased significantly under Labour6'.

However a few months earlier he did tell the truth when in Parliament he admitted that fewer New Zealanders were receiving elective surgery7. 3 Under Labour, elective surgery has flat-lined. In 2000/1 there were 107,366 elective procedures. Five years later, 107, 208 procedures8. If you look at elective surgery discharges on a per-head of population basis, then we've fallen even further behind9.

Minister Hodgson points to case-weighted discharges. As you know this figure is a mathematical calculation that reflects the complexity of the surgery done, not the number of patients helped. These have increased in raw terms but not on a population basis10. What case-weights show is that the people who are getting elective surgery in the public health system are sicker, because they need more complex surgery.

That certainly supports the evidence by various DHBs that patients have to be sicker to get surgery than they were five years ago11. There have been some areas of improved output, more operations - like cataracts and hip replacements. But these are few and far between, in high profile areas of political importance. Other important clinical areas have been neglected, causing some angst within the surgical workforce. When Labour came to office they promised to cut waiting lists by doing more surgery. In September 1999, there were 176,414 people waiting to see a specialist or waiting for an operation. At Christmas last year - after six years of Labour and $4 billion extra - there were 181,198 kiwis waiting to see a specialist or waiting for an operation12.

As Leader of the Labour Opposition, Helen Clark promised to 'blitz' hospital waiting lists. 'I give you my word: Labour will blitz those waiting times for hospital treatment'13 she said. 'My pledge to you in health is that we will focus on patients ... and cut waiting times for surgery,' she said in her 1999 election campaign speech misleadingly called 'Leadership, Integrity, Vision'. 'I give my word' she said. 'I pledge' she said. The public never knew Helen Clark would blitz the waiting list by dropping a bomb on the patients! Now the Government has an eye to the next election.

They have unilaterally instructed DHBs to cull their waiting lists, dumping anyone who has been waiting more than six months to either see a specialist or to get their operation. The latter are part of the cruellest cut of all: being promised an operation only to be denied by the Prime Minister's desire to claim some sort of pathetic credit for cutting waiting lists. The past few months have seen a huge diversion of clinical resources into paper-based review assessments of patients waiting to see a specialist or waiting to get operations14.

The administrative and clinical cost associated with the Government's edict is doing nothing to expand elective capacity and get people operations. Health professionals have described the cull as unsafe and cruel. The ASMS said the cull is dangerous and risky15. Others say the system is dishonest16. Specialist after specialist has warned the waiting list cull is a false economy that will see patients get sicker and sicker eventually requiring more expensive publicly funded care.

The public is worried there is no rhyme nor reason for who is affected and what their GP will do with those who have been culled. In many cases the GP can do nothing. Its highly inefficient to have such a duplication of GP visits and specialist appointments. The public think the cull is random and badly managed. The public can't see any change in the waiting list crisis after seven years and all the extra money. It's little wonder then that Health is back as the public's No1 issue. All the con-job chickens have come home to roost. All the bluff and bluster in the world won't hide the fact that Labour's health system is not working. And they know it. Hospital productivity is falling. Hospital deficits are expected to top $100 million this year17. The Government has commissioned a high-powered group to find out why $4 billion extra into Health has delivered so little.

This project called 'Value for Money' includes the Department of Prime Minister and Cabinet, The Treasury, the State Services Commission, the Ministry of Health and the District Health Boards18. According to the Minister of Health this group of some of New Zealand's most senior public servants has spent over a year developing a set of more than 40 headline indicators, reviewing district health board reporting requirements, and are doing initial work on outcomes management and the development of a suite of productivity indicators19. A suite? A sofa and two lazy boys? Instead of doing something about it, Labour is yet again measuring the problem.

And if that measuring finds something they don't want to admit, then Labour forms a working party. In electives, they've had the Addressing Disincentives Working Party. Now we have a Theatre Efficiency Working Party; an Addressing Acute Demand Working Party20. Plus five working parties yet to be named. It's little wonder the number of health managers and administrators has grown by 2,000 since 199921. For every additional two nurses employed within a DHB, Labour has employed an extra manager or administrator22.

Of course a large workforce the size of our public health system needs managing - and it is good managers who most resent the bureaucracy frustrating the care of patients. But an extra administrator for every two extra nurses is really is taking managerialism too far! Another authoratative source said: 'The management costs and overheads which have been introduced to the health system... are simply extraordinary and must be curbed. The priority must be money for services to people'23. Helen Clark speaking to the Nurses Organisation in 1998. So after $4 billion extra, New Zealand has a health system of which fails many sick people, falling productivity, increasing cost pressures, growing bureaucracy, and huge public dissatisfaction.

The Government is trading on the goodwill of the thousands of devoted medical people and support staff working in our public hospitals. In a study of waiting lists and times for elective surgery across 12 western countries24, the OECD found that those countries which don't appear to have a waiting time problem, on average, spend more in health care, have more acute beds, more specialists, and more frequently have activity-based funding for hospitals. What sets New Zealand apart is that we buck the author's conclusion that higher public spending on health per capita is associated with higher rates of surgery and lower waiting times.

New Zealand has had higher per capita spending yet our total surgical discharge volumes have flat-lined, and fallen on a per capita basis25. Here in New Zealand one of the underlying problems is that the resources for elective surgery are the only contingent capacity the public system has when it gets over-loaded with emergency or acute care.

We will need to address this to build a sustainable improvement in elective numbers. Clearly, New Zealand needs to do more elective surgery to reduce waiting lists, improve patient health and welfare and to restore public confidence in the health service.

Culling waiting lists may appear a superficially cheap way of controlling demand, but offers no solution to patient distress, ill-health or incapacity. Increasing surgical activity is a more effective way of reducing waiting lists and improving patient health and welfare. Throwing more money alone at the health system isn't going to do it, as Labour has proven. National says New Zealand can offer more publicly-funded elective surgery by looking to the independent sector for additional capacity, greater trust in and involvement from specialists and GPs, cuts in bureaucracy, and a strong practical focus on getting value for money. Looking to the independent sector to assist the public health system with additional elective surgery has many advantages. It is the quickest way to get additional capacity for patient services. Building new public hospitals takes years and is very expensive.

The cost blow-outs at both the new Tauranga and Wellington hospitals indicate the level of financial and time-table risk involved. Contracting with the independent sector will encourage innovation, and spread risk. It will also help New Zealand to secure and increase our health workforce skills with more opportunities for specialists to work in both the public and independent sectors. Patients may also get more choice, and more timely treatment.

The Government's stated policy is: to allow some flexibility in the delivery of publicly funded services through private facilities as an interim measure to reduce backlogs of patients, and to manage peak demand periods.26 Partnering with the independent hospitals has remained relatively static over the past four years since a substantial decline with the change of government in 199927. Almost half of all publicly-funded private hospital work is now performed by the South Island Mobile Surgery Unit, according to Government figures. The principal frustration with Labour's approach to independent hospitals is the temporary and crisis-based nature of so many of the DHB contracts.

The independent sector is too important to be treated as a marginal player to relieve pressure when a DHB falls over. If we are to build a sustainable capacity - which is fundamental to boost elective surgery - then contracts need to offer greater certainty. In return, independent hospitals must offer greater efficiency, at less cost.

National will trust and involve specialists and GPs more actively in the management of elective surgery. Specialists should be trusted and more involved in decision-making and rewarded for working harder to overcome the hospital bureaucracy The future will see GPs with specialist training carrying out many more of the lower-order operations that they would have previously referred to the local hospital.

Patients want the choice of having their care closer to home. This demands more emphasis on building our general practice workforce than is evident from the current government. Over the next few months, we'll be talking more about improvements to primary care that will deliver more care, more choice and care closer to home. Labour's ideology sees it foolishly associate non-government activity with for-profit companies. In many parts of the health sector the favoured form is the non-profit organization. Indeed, 75% of New Zealand's health insurers are not-for-profits.28 National also wants to encourage the independent sector to be more involved in the health debate.

The independent sector is not just private surgical hospitals. It includes the huge range of community organizations delivering education and/or care like Arthritis New Zealand, Stroke Foundation, Parkinsons Society, Alzheimers and Diabetes New Zealand. These organizations are actively providing care and education throughout the community and they deserve our support. The independent sector is often treated as the residual ... getting contracts and funding only when the DHBs own providers have been satiated.

A leading DHB chairman was recently reported as saying that Maori health providers, resthomes and home care services lost out on funding in his area because that funding was needed to prop up a shortfall in the DHB's hospital arm29. Today our public health system is under pressure. We can fix the pressing need for more elective surgery. We can do so by treating people rather than cruelly culling them from waiting lists for political purposes. In health there are other pressing issues.

The health workforce is feeling un-trusted and dis-empowered by the Government. We face a growing shortage of GPs in many rural parts of the country. And if you can't enroll with a GP then you can't get any subsidy for a doctors visit. After-hours GP services are no longer available in many communities. People suffering from chronic conditions aren't getting the primary care they need because of poorly targeted programmes.

Maternity services need a substantive review to improve co-operation and co-ordination. Mental Health is bogged down in endless strategies, spin and waffle. Despite millions of dollars, hospitalizations from attempted suicides are up. And our ageing population faces a future with home care services in crisis. Health is back at the top of the political agenda. We look forward to working with you, the public health service and other New Zealanders to improve our health service.

Footnotes: 1 "Reduced waiting times for public hospital elective services". Government Strategy - March 2000. 2,3,4 Ibid 2 5 Sciliani and Hurst, "Explaining waiting-time variations for elective surgery across OECD countries", OECD, 2004 6 Press release 30 June 2006 "Minister signals major work to improve electives" 7 Hansard, Question Time 14 March 2006: Mr Hodgson admitted that the number of people getting elective operations had fallen from 98,000 in 2001 to 96,000 in 2005. 8 WQ 403(2006)

9 Parliamentary Library research for Ryall MP, August 2006. 10 Ibid 11 Letter from Denis Jury, Acting CEO of Auckland DHB, 17 January 2006, "In other words, the patients treated from the waiting list are sicker now, on average, than they were five years ago". 12 September 1999: Waiting for First Specialist Assessment 67271 (WQ 13655(2004)) Surgical waiting list 109,143 (Elective Services Quarterly Reports, Appendix 5). December 2005: FSA 122,600 (WQ 4412(2006)), Surgical wait 58,598 (WQ4338(2006)).

13 Helen Clark, speech to Labour Party Conference 1995 14 See discussion of this point at Iversen, T. "A theory of hospital waiting lists", Journal of Health Economics, 12 (1993),p 55-71. 15 Refer statement 13 May 2006 16 Refer Press 26 July 2006 - ten senior CDHB doctors describe cull as dishonest 17 Ministry of Health evidence to Health Select Committee 18 WQ 9884(2006) 19 WQ 9885(2006) 20 Ministry of Health press statement 25 July 2006 "Improvements ahead for elective services" 21 WQ 4585(2006) 22 WQ 8845(2006) 23 Helen Clark (September 1998) Speech to the NZNO AGM and Conference. 24 Sciliani and Hurst, "Explaining waiting-time variations for elective surgery across OECD countries", OECD, 2004 25 WQ 403(2006). Caseload Monitoring Report data analysed by Parliamentary Library (2006) 26 "Reduced waiting times for public hospital elective services". Government Strategy - March 2000 27 WQ 4597 (2006). See caveat in WQ 5719 (2006). 28 Health Funds of New Zealand. 29 Hawkes Bay Today 15 June 2006


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