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Cunliffe: Leading the health sector

1 May 2008 Speech Notes
Leading the health sector: strong central role for the Ministry of Health

O nga iwi o te motu; he tangata Manatu Hauora, tena koutou tena koutou tena koutou katoa. Talofa Lava, malo e lelei, namaste, ni hao ma, warm Pacific greetings to you all.


I would like to acknowledge the Director General, Stephen McKernan, and all of you. I want to thank you for all the hard work you do to ensure the good health of all New Zealanders.

I’ve flown to Wellington today especially to speak to you at this important Leadership Forum. I confess that I haven’t done so just to thank you – although I mean that sincerely. Nor just to celebrate your many achievements to date – although they are considerable.

I am here today to deliver a strong and clear message: I want our role in the health system to change.

I want us to change the way we work – as a Ministry and as Ministers. Let me explain what and why.

You have recently completed an important and far-reaching internal restructuring – one that puts far more emphasis on innovation, strategy and building analytical capacity.

The time has now come to change the way the Ministry operates within the broader sector:

- Change from a primarily advisory and monitoring role; to one of stronger central leadership of the sector as a whole;

- Change from thinking of the Ministry as primarily the Minister’s advisor, to stepping up to the role as the Minister’s and the government’s leading agent of change within the system.

It follows that the government, and I as Minister, will increasingly hold this Ministry accountable, as appropriate, alongside the ongoing statutory accountabilities of DHBs and other health sector entities, for whole-of-system outcomes rather than just for the Ministry’s own outputs.

In saying this, let me acknowledge that since becoming Minister of Health I have observed that the health and disability sector consistently performs at a very high level.

Our system is internationally recognised as a provider of high quality, trusted services that are delivered in a cost-effective manner. And that makes it the envy of other countries.

The system has a hard working and dedicated workforce of which we can be justifiably proud. And of which you can be proud to be a part of as Ministry of Health employees.

It’s also timely for me to acknowledge the good work all of you are doing collectively within the Ministry and across the sector. And your continuing hard work and dedication to making a difference in health.

Today is an opportunity to take stock of the historic and current challenges and the initiatives and strategies to overcome them.

In my remarks today I will recall the journey that we have been on, the challenges we have faced, and the opportunities that lie ahead.

I will note the underlying purpose of the Government’s broad health policy, and take stock of progress made in implementing it.

I want then to look forward, and to address three areas of opportunity:

- taking the primary and preventative health strategy to the next level
- strengthening health services we can trust, including by focusing on quality and building a more regionally and nationally coordinated DHB system; and
- taking a strategic view of the key underlying enablers – principally workforce, information and finance – that will allow us to more forward further.

Finally, I will consider what this all means for our respective roles and “job descriptions” – as a Ministry and as Ministers in the health sector.

Historical challenges
Put simply, New Zealand’s health system is on a performance improvement journey. Historically our health system has faced many challenges. The 2001 reforms, in particular saw our health system inherit some substantial historical challenges.

The 1990s model of health care was characterised by the fall out of a system that wasn’t working: high entry costs to primary care; few people enrolled in chronic disease management programmes; and excessive waiting times for electives and electives on demand and not based on clinical criteria.

In short, what this resulted in was a noticeable lag in the health of New Zealanders behind that of other developed countries, especially for our Māori and Pacific peoples.

The system lacked a comprehensive focus on population health goals and reducing inequalities, and we noticed that New Zealanders were losing trust and confidence in their health system.

The 2001 reforms
The 2001 health reforms and the establishment of District Health Boards represented a marked change in the provision of health services in order to address these challenges. The previous model of health care delivery was hospital-centric and focussed on funding contracts, prices and volumes.

Our new model of health care delivery was to emphasise population health improvement, reducing inequalities in health status, better integration of services, and greater community involvement in health system governance.

The 2001 reforms aimed to provide a health system based on cooperation and a health system that puts people at the heart of health care. The objectives were clear. As a government we wanted to:
- raise the health of the population and reduce inequalities
- ensure better use of resources
- increase community involvement in decision-making, and
- create a non-commercial, collaborative and accountable culture in our valuable publicly funded health sector.

Since 2001 we have instigated a number of key initiatives and strategies to address historic challenges in New Zealand’s health system

There is momentum across the entire spectrum of the health sector to realise the goals of the New Zealand Health Strategy.

The launch of the Primary Health Care Strategy in 2001 signalled the most significant changes to, and investment in, primary health care services in over 50 years. As many countries worldwide are now recognising, harnessing the potential of the primary health care sector is vital to improving health outcomes.

Other major initiatives include the Cancer Control Strategy which spans the continuum from prevention to palliative care; Healthy Eating – Health Action which is our strategic approach to improving nutrition, increasing physical activity and achieving a health weight for all New Zealanders, and He Korowai Oranga – our Maori Health Strategy sets the platform for action in reducing inequalities for Māori.

The momentum for action has not stopped, just last year ten Health Targets were introduced in areas where we need the greatest traction to achieve our goals. Already the attention the Health Targets have attracted have begun to deliver results.

This Government has invested significantly in our health system. Vote Health has increased at a much faster rate than GDP annual growth, on average 9 percent nominal growth per year. In part, this increase has been to fund services where there was an under-investment in the 1990s.

The historical underinvestment in capital infrastructure was recognised and remedied. In the last six years over $2.3 billion of capital expenditure has been undertaken and new hospitals have opened in Auckland, West Auckland, Christchurch and Invercargill. These illustrate this government’s determination to provide first-class hospital and health services throughout New Zealand.

We have invested in more doctors - a growth of just under 8 percent in 2006. We also have increased doctor and nurse salaries in recognition of the fact that we are competing in a world market for health professionals.

We have invested heavily in primary care. Since 2002/03, the additional $2.2 billion in support for the Primary Health Care Strategy has enabled:
- a move to equitable and universal access to primary care
- reduced out-of pocket costs for GP visits and prescription items,
- extra funding for very low cost access for practices charging very low fees
- extra funding to PHOs for services to improve access for high need populations and population-based health promotion
- and extra funding for appropriate management of long term conditions in primary care settings.

We have demonstrated a commitment to prevention and public health - spending above the OECD average in these areas. Examples include
- education on improving diets and increasing physical activity
- outreach services to increase uptake of childhood immunisations and menningoccocal vaccine
- cancer screening coverage, particularly for Māori and Pacific women
- and media campaigns aimed at reducing smoking in the home or car.

Delivering results
There is good evidence this investment is delivering results. We have seen that significant indicators of health status are improving. Over the last nine years life expectancy has risen 3.5 years for males and 2.2 years for females. Overall, our life expectancy exceeds what one would expect given our GDP and compares well with other OECD countries. Deaths from cardiovascular disease continue to decline and 5-year survival rates for cancer continue to improve.

And there is some evidence that health inequalities are reducing:
- Infant mortality for the total population has declined 28 percent in the 10 years to 2005 and for Māori it has declined by 43 percent
- Recent evidence shows that both ethnic and socioeconomic inequalities in mortality may no longer be widening, as they have done ever since the mid 1980s, although the inequalities are closing more so for Māori than for Pacific people.

The Primary Health Care Strategy has:
- reduced fees – PHOs offering very low cost access, covering more than one million enrolees, charge adults no more than $15 per visit
- access to GPs improved – consultations increased by 3 million over the first 3 years of the Strategy, and
- in 2006/07 we recorded a very large fall in the number of adults reporting an unmet need for GP services.

Involvement in long-term conditions management programmes has increased:
- more and more people are enrolled in our Diabetes Get Checked programme
- enrolments in Care Plus, our structured management programme for those with multiple chronic illnesses, continues to improve, and
- the uptake of publicly funded statins, to reduce cardiovascular disease risk, is now at levels comparable with Australia.

We are even seeing positive signs that lifestyle risk factors are improving due to our public health messages. We have had one of the biggest decreases in the OECD in tobacco consumption. And smoking prevalence in 14 and 15-year-olds has dropped 42 percent for girls and 56 percent for boys since 1999.

This is a huge achievement and it reflects our focus on successful public health campaigns, our Smoke-free legislation and our community efforts to achieve a country where a smoke-free lifestyle is the norm. Ensuring our youth never start smoking and that children are not exposed to smoke in their homes are now at the forefront of our efforts to tackle the harm caused by smoking.

Indicators of hospital care quality show very positive trends. Hospital mortality rates have been steadily declining and patient satisfaction with hospital services remains high. The average length of stay in hospital is reducing while the rate of readmissions to hospital remains steady. Taken all together these factors indicate the quality of service in our hospitals keeps on improving.

There has been growth in electives services volumes while maintaining relatively short waits. Over the last six years we have seen the number of case weighted discharges increase by over 12 percent. And we have delivered over 8000 additional joints and over 4000 additional cataracts since 2004/05.

Investment in mental health has delivered results – we have seen a significant improvement in public attitudes towards and acceptance of those with mental illness, and early detection of mental illness has improved.

In the last year alone the proportion of those with a long-term mental illness who also had a relapse prevention plan in place increased from 35 percent to 64 percent. Relapse prevention plans mean these clients are less likely to fall through the gaps and end up as an acute admission.

Furthermore, health outcomes for children are improving – since 1996/97 there has been a significant increase in the number of under 6’s whose last visit to the GP was free and the use of emergency departments for children has dropped, over 80 percent of adolescents accessed oral health services in the last year, and we’ve also seen a recent 5 percent increase in the number of two year olds who are fully immunised.

Challenges remain
In spite of all these achievements and gains, significant challenges remain. DHB performance shows stubborn variations, in particular variation between ethnic groups in rates of ambulatory sensitive as well as avoidable hospital admissions. Variation between DHBs is also higher than I would like.

And while we have created a strong primary healthcare platform with lower cost access, there is potential for us to do more to make a difference to shift disparities between Maori and Pacifica health statistics; and to put further pressure on key disease groups.

Central to this is an integrated approach across the primary health sector and seamless interchange between primary and social layers.

Securing a flexible and adequately supplied health workforce will also be critical to the future of health care – our workforce is ageing, future workforce shortages are predicted globally, the health workforce has become increasingly specialised, and labour costs continue to rise as we pay internationally competitive wages. Workforce shortages will be the key driver of change in the way we deliver health services. We will need to focus on new and flexible ways of working.

Health expenditure projections indicate we need to continue to improve health outcomes with proportionately smaller increases. Yet public expectations of our health system continue to rise – widespread internet use and the development of new technologies mean that more than ever before the public are more informed, they want more choice, expect more from their treatment and want convenient services available 24/7.

We will need a real and a sustained focus on value for money and improved productivity to meet these substantial challenges.

A vision for the future
I am here today to make it clear to you as the key leaders and managers of the Ministry of Health, and to the wider sector, that I see three key areas as being crucial in taking forward the gains we have made.

As I indicated earlier, I believe the opportunities for action fall broadly into three groups.

- taking primary and preventative health care to the next level
- strengthening health services we can trust
- And taking a strategic approach to some key enablers of the system.

Let me outline each in turn:

Taking primary and preventative care to the next level
Primary care and prevention services are key to addressing the burden of long term conditions. We have already created an environment of low fees, greater investment in health promotion and services that increase access in the primary health care and community setting. This is a strong platform for us to be able to get momentum on visible improvements in the health outcomes that can be influenced by community and primary care based services.

Long term conditions continue to be the most significant contributor to early death and premature disability among our populations, and our most vulnerable communities bear a greater burden of early onset and faster disease progression than other New Zealanders.

A determined focus on disease management for key disease groups is at the heart of the public health strategy. Better access to screening and development checks, diagnosis, and supporting the continuum of care for long term conditions is a priority.

So too is a broad view of the underlying social determinants of health; like housing, sanitation, nutrition and lifestyle issues that impact inexorably on the need for primary and secondary layer interventions.

The disparities in health outcomes between European, Maori, Pacifica and other migrant New Zealanders have diminished but remain unacceptably high. Our children and young people, and our senior citizens are among the most vulnerable member of our society.

We will also increase our focus on the health of children and young people, because many of these conditions can be influenced earlier in life. Better addressing the needs of the most in need lifts overall health outcomes and reflects New Zealanders’ aspirations to live in a fair and decent society.

In all cases we need a relentless approach to implementation and good data to ensure we get the best results possible.

Strengthening health services we can trust
New Zealanders expect that the very significant investment they make in health care will be well stewarded. They expect safe, high quality services will be there for them when they and their families and whanau need them.

To deliver on these expectations I will hold the Ministry as my agent, as appropriate, accountable for the overall performance, effectiveness and efficiency of the health system. The existing direct statutory accountabilities of DHBs and other health entities will also continue but I want and expect stronger leadership from the centre of the system.

Value for money must continue to be ensured through the annual planning and performance management cycle of DHBs, through which some 75% of public health investment is currently channelled. Ministry-led performance monitoring can be supplemented where necessary and appropriate through Ministerial and Board level support.

Quality and safety are crucial to ensuring the public has trust and confidence in the system. Patient safety in New Zealand compares well with wealthier countries from the OECD. It is the job of the Ministry and DHBs to further build on these gains. The sector is getting better at measuring quality and benchmarking against proven standards to reduce inappropriate variation, but there is room for further improvement.

The role of the Quality Improvement Committee will be enhanced over the coming year. The Ministry has an important role in supporting implementation of its national improvement programme. This includes safe medication management, management of health care incidents, infection prevention and control, optimising the patient’s journey, and the introduction of a national mortality review system. Each project will be led by a DHB and will report regularly to the Quality Improvement Committee.

Closer relationships across the sector are needed to ensure organisations share information and develop innovative solutions at district, regional, and national levels. Partnership arrangements such as joint purchasing and regional clinical networks will enable our system to be more cohesive and efficient.

I expect to see better operational effectiveness through increased clinician input and closer relationships between clinicians and management, primary and secondary services, and between DHBs and the Ministry. This will reduce barriers and ensure the system is working effectively.

While the fundamental design of the DHB system therefore remains sound, there is potential to achieve more and to improve some key processes. We still see significant variation in the performance of the sector and there is potential to further strengthen collaboration through regional shared services and stronger central leadership on strategic nationwide priorities.

A key challenge is to make consistent national gains within our semi-devolved health and disability system. In doing so we will need to ensure that any changes are not unduly disruptive, and add to rather than detract from the effectiveness of the system while maintaining an appropriate focus on value for money and the delivery of measurable outputs according to target, including elective services.

Since their establishment in 2001, the 21 District Health Boards have grown and developed in their abilities to plan and deliver services for their local populations as required by the New Zealand Health and Disability Act (2000).

Six years on since their establishment, we continue to see evidence that District Health Boards are learning organisations, continuing to grow and mature as funders of health services.

The Act also intended that the health system organise itself at district, regional, and national levels so that services are well coordinated and effective. Some weaknesses have been highlighted in recent times. A couple of examples are paediatric and obstetric services in Whanganui, and paediatric oncology services in Wellington.

These weaknesses are symptomatic of failures of coordination and planning. Improved longer term service planning - including workforce requirements – at regional and national levels – can be achieved through strengthened DHB collaboration.

I have come to the view that greater co-ordination throughout the entire system is essential to long term sustainability. As services are becoming more complex and interdependent, planning at a district level will not be sufficient on its own to meet the medium to long-term needs of the system. The continued success of the DHB system requires action across the sector: amongst DHBs themselves, providers, the Ministry of Health and myself.

There are some excellent recent examples of partnership arrangements being developed, involving arrangements such as joint purchasing and regional clinical networks. I strongly encourage these collaborations to continue, especially where they enable better operational effectiveness through increased clinician input.

The Ministry of Health has a key role in positively and actively leading the sector to achieve improvements, assessing the level of achievement, and taking the appropriate actions where performance is not to the agreed level.

The Ministry’s role is to lead DHB planning through the provision of strategic policy leadership, expert advice, tools and information, and to ensure that there are appropriate regional and national structures and processes to support this DHB planning. The Ministry is also responsible for monitoring and improving the performance of DHBs as Crown Entities.

The Ministry has a role in ensuring the integrity of the health system as a whole, and the Ministry is taking the lead in driving particular pieces of work to resolve obstacles that get in the way of the system operating effectively and efficiently as a system.

The successful implementation of any system takes more than simple exhortation or regulation. It takes strong leadership, good relationships, the development of expertise, as well as sound frameworks and financial resources.

However, the key change that I want to emphasise today is that of your role. As the leading strategic entity within the health sector, and as my principal agent as Minister, I now look to the Ministry to take a stronger, more proactive leadership role with other health sector bodies. As you are jointly accountable for outcomes with DHBs and others, your role is critical in securing future gains.

The quality journey
Safety and quality are areas which will be continually placed at the top of the health and disability support sector’s agenda. The whole sector has a role to play in supporting this priority - whether it be DHBs tying part of their budgets to progress on the safety and quality agenda, the Ministry of Health working closely with DHBs to resolve specific blockages, or the whole sector combining their efforts via the National Quality Improvement Committee.

Quality must be a core strategy of any organisation or system, and quality is the core operational responsibility for every person in this system.

Enabling a strong, sustainable health sector for the longer term
Closer relationships also enable the spread of innovative ideas and practices, which is vital to performance improvement being achieved. Access to information, resources, tools and systems helps provide the sector with capability needed to capitalise on the innovations.

The Ministry has strengthened its focus on sharing innovations and information across the sector. A directorate was established during last year’s organisational restructure that is dedicated to working proactively with the sector to share innovations and support implementation. A feature of the work programme this year will be to establish a Health Initiatives Clearing House to promote innovations within the sector.

To achieve this over the longer term, a clear focus on the key long term enablers will be further developed. Considerable investment has already been made in building a strong and sustainable health sector workforce, but despite these gains there are still areas of need as the balance between workforce supply and demand shifts over time. The clinical workforce must be empowered to contribute their best to system improvement.

Long term productivity and quality gains also depend crucially on improved flows of clinical operational information between providers. Relevant clinical information should follow the patient wherever possible to facilitate seamless interaction along the patient care journey.

DHBs must be networked with high speed connectivity and interoperability to enable the sharing of data and the benefits of telemedicine. Achieving these gains will require a long term and centrally coordinated approach to investment in information and communications systems.

An enhanced role for the Center
Role of the Ministry
As I said at the outset, crucial to these three areas being achieved is an enhanced role for the Ministry of Health in driving forward performance improvement. We need to build upon the advantages of a semi-devolved system but not lose sight of the need for a strong centre in providing leadership, advice and being accountable for the system as a whole.

As a sector we must not be complacent and must continually strive for improvements in services to improve health and independence for all New Zealanders. The role for the Ministry is to ensure that the strengths of a semi-devolved system are maximised in a way that focuses on improvements in care and services.

The Ministry’s work programme reflects these three areas and I will be looking for you to show leadership in each of them.

The role of Ministers
The role that I will play as Minister and the role the associates will play will also adapt to support stronger central leadership in the delivery of various aspects of our health system. We have a large and able group of Associate Ministers, many of whom I count as my peers and contemporaries. Accordingly, I have sought to build a flat, empowered Ministerial team to support the health operations.

The delegations give Associate Health Ministers a wide scope for action. My aim is to have a co-ordinated health service where Associate Ministers play a vital role in helping plan and deliver effective and efficient health services to New Zealanders.

The delegations are broader than in previous years. Associates have specific policy areas of responsibility as well as direct responsibility for liaison with a set of DHBs. This not only increases ministerial contact with the sector but strengthens the sector as a whole. The Health Ministerial team meets weekly and the Ministerial team is in constant contact and dialogue with the Ministry, the sector and each other.

As Minister I will be focussing on taking the primary and public health care, the secondary strategies and the key enablers like IT and workforce to the next level.

In doing so I will be working closely with clinicians to get their contributions. Good primary healthcare is patient-led and clinician-driven to ensure we are delivering the best services on the frontline. The second area of focus is on building on collaboration and coordination at DHB level.

I would like to emphasise that I support the DHB model in this country. The basic policy drivers of local representation on Boards and the involvement of local communities in the development of services are fundamental and should endure.
However, there are some things individual DHBs and we have further work to do in many areas.

Let me conclude as I began – both by validating and thanking you for the immense contribution you have made to our health system and challenging you to think anew about the role of yourselves as a Ministry of Health within our semi-devolved health system.

As my principal advisors and agents, I see your role not as one of monitoring and supporting as sector of autonomous entities but of leading change towards a more integrated health network.

Thank you.


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