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Cunliffe: Elective Services – investing in heath

16 May, 2008
Elective Services – investing in the health of NZers

Speech notes for address to the Elective Services Workshop, 14 May 2008, St James Theatre, Wellington

Thank you for the opportunity to speak to you today. Over the coming months I’ll be trying to attend as many of these important sector events as possible.

It’s important for us to have an ongoing conversation about New Zealand’s health system.

Today I’m going to talk to you about what has been achieved in elective services, what issues have arisen, and what opportunities there are for future action.

Why do elective services matter?

Firstly, let me pose the question. Why do elective services matter? Because people need these treatments. And they care greatly about receiving them.

The public cares about waiting times, funding issues, whether there are enough beds and whether there are medical staff available to perform these important procedures.

For that reason, you can be sure that Ministers of Health will always take a special interest in elective services and an even greater interest in whether public expectations and needs are being met.

Remember that electives include procedures that, if delayed, could be potentially life-threatening – things like prostate checks, endoscopies, and cancer treatment. Perhaps the word “elective” makes these sound “optional”. They are not.

What has been achieved in elective services?

Before I get into issues and opportunities for the future, let’s briefly look at what we’re doing together and what has been achieved.

I’m pleased to note that timely, prioritised elective surgical services are now a feature of the New Zealand health system.

The Elective Services work programme covers a wide range of important areas: clinical prioritisation, primary-secondary interface, targeted funding and patient flow.

Prioritisation of patients is important to ensure that there is fairness in the way elective services are provided. And fairness means that those patients with the greatest need and ability to benefit receive treatment first.

The Ministry is working closely with the professional colleges to develop and implement better clinical prioritisation systems.

Innovation pilots have been funded within DHBs to identify and assist in overcoming some of the barriers to improving access to elective services. This work has included funding of primary care to provide a range of services previously delivered in hospital settings.

More recently pilots are being developed to improve primary care access to diagnostic services. This important work will help ensure patients receive access to appropriate services, including specialist assistance, in a timely manner.

The level of elective services provided in New Zealand is an ongoing concern to many stakeholders.

In October 2006 the government announced a sustainable funding increase of $60 million each year to improve access to elective services for New Zealanders.

By the end of that financial year, patients had received 112,507 elective procedures—an increase of nearly 7000 over the previous year.

Since 2004 the government has been investing in elective services through the Orthopaedic and Cataract Initiatives.

These initiatives have seen an increase in the number of major joint replacement and cataract procedures provided each year, improving the quality of life for New Zealanders, and ensuring that people can age with dignity and independence.

Since 2004 an extra 8200 patients have received publicly funded joint replacement. An extra 4200 patients have received cataract surgery in the past two years.

New Zealand’s elective surgical system is one of the fairest and most transparent in the world. DHBs are managing waiting lists more efficiently. In fact, there was a 3.3% increase in total surgical discharges in 2006/07 compared to the previous year.

More people are being seen and waiting times are improving. People who need treatment the most get it first, and 92% of patients who are promised treatment receive it within the required six months.

Last financial year there was a 6.5% increase in the number of patients with assured status receiving elective service treatment within a six month period compared to the previous year.

Last year the cataract initiative was exceeded with 919 more procedures delivered than planned – in total that was 11,290 operations.

On the other side of the coin, the Orthopaedic Initiative delivered 184 fewer procedures than planned.

What are the issues?

We are doing pretty well overall but there are still areas where we need to make further improvements. We are facing a number of issues, many of which you may have already touched on in this workshop. And I want to outline some those today.

What has become clear to me is that there are areas where we can make improvements between services, across DHBs to improve both acute and elective services.

We have to rethink how electives fit into the health system, where the gaps are and how we can fill the gaps to improve services. This isn’t something we’ll find the answer to today but I challenge you all to think hard on this when you go back to your DHBs and in future planning exercises.

Legitimate need
Last year around a third of DHBs didn’t complete all of their elective quotas. The question has to be asked why.

At the end of the 2006/2007 year the percentage of patients with an assured status who had been waiting for more than six months for surgery had decreased by over 52% from the previous year.

There are still many people who were waiting for hip and knee surgery or cataract operations - people who are prevented from enjoying the same quality of life as the rest of us.

We need to take a serious look at how we can build on current achievements. Shortly I want to touch on how DHBs can work together to achieve positive outcomes through shared services and knowledge.

It’s clear that we’re doing well in some areas but overall more work needs to be done across the board.

Capacity constraints
Some DHBs are citing capacity constraints as a reason for limited increases in elective services.

I do understand that, despite the largest capital investment in New Zealand’s history, some DHBs still have physical capacity constraints – campus redevelopment projects and restricted facility space.

Workforce and scheduling issues can also impact on throughput so there is an opportunity to increase capacity through improved processes or workforce development.

I believe that investment in the Quality Improvement Committee’s work on ‘optimising the patient journey’ will assist with this.

The Ministry of Health has developed a set of indicators that can be used by DHBs to determine whether you are making the best use of your capacity. This will have been discussed at today’s workshop.

The challenge now is to progressively reduce throughput constraints. I understand that this is not a straightforward process in many areas. However, I expect to see consistent efforts from DHBs to learn, innovate, and improve their performance in critical areas.

Sharing best practice among DHBs
In spite of the achievements and gains we’ve made in the sector, significant challenges remain. DHB performance shows stubborn variations, in particular variation between ethnic groups in rates of ambulatory services as well as avoidable hospital admissions. Overall, variation between DHBs is higher than I would like.

There is a lot to be gained by sharing knowledge and expertise between DHBs. No more of the ‘if it wasn’t invented here” syndrome – I want each of us to act with the public benefit and the integrity of the whole system in mind.

Building a culture of cooperation between DHBs and between staff is important if we are to deliver improved services to the public.

You will be aware that the government has agreed that DHBs can utilise unused capacity in other DHBs to deliver elective services. The inter-district pricing model supports this.

DHBs also have the ability to use private hospitals to perform elective surgery. And let me be clear that I have no problem with this. However, I would be concerned if I started to see a trend toward increasing reliance on this system as a means of delivering elective services. If this became the case I would expect to see a significant system analysis from the DHB.

It is important that good relationships are maintained between public and private service providers. But I don’t want to see an increasing reliance on private hospitals, where there are unrealised opportunities to achieve system gains internally. First and foremost we must maintain a strong, safe, secure and accessible public healthcare system.

Reducing inter-DHB variation
I have come to the view that greater co-ordination throughout the 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 Ministers.

Improving healthcare delivery requires a joint approach across the sector. Part of the solution comes from what we can learn from what other hospitals and DHBs are doing to improve care.

Supporting more volume
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.

I recently visited the Manukau Super Clinic. This Clinic delivers significant elective volumes for Counties-Manukau DHB.

This is an example of an organisation set up to specialise in a “production-line” process of delivering operations whereby electives are separated from acute admissions. This is one alternative model of care from the standard delivery of elective surgery in other hospitals where electives and acutes are co-located.

Managing pricing
I recognise the need to address growth and some ongoing pricing issues. Under the EI, funding is for elective delivery that is additional to existing agreed base volumes, and is targeted towards areas of high need. Areas of need are informed by Standardised Discharge Ratios (SDRs), and local intelligence on access constraints.

Ambulatory electives
Another possibility looking forward is to think about expanding ambulatory electives procedures.

Under the current Electives Initiative, First Specialist Assessments (FSAs) are only funded when associated with additional elective inpatient treatment. The only outpatient procedures considered for funding have been endoscopy, skin lesions and lithotripsy procedures.

Expanding funding for the types and numbers of first specialist assessments (FSAs) and treatments in outpatient settings has the potential to benefit many thousands more New Zealanders per year.

In addition to increasing volumes, investment in this area could improve diagnostic pathways and improve the quality of elective services. This includes thinking about which setting is best for delivering additional volumes.

As is currently the case, we would expect additional electives to sometimes be delivered by DHBs other than the DHB funding the procedure. If additional funding were based on national prices it is recognised this would reduce the transaction costs of negotiating prices DHB by DHB.

Additional funding would also allow innovative thinking with respect to when primary care practitioners and settings are more appropriate to deliver elective procedures. DHBs are also interested in different models of FSAs, for example “virtual FSAs”.

So it is important when we are thinking about “more”, how things could also be done differently and “better”.

A new role for MOH
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 DHBs and the system as a whole operating as effectively and efficiently possible.

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.


If I can leave you with one thought today it would be that closer relationships across the sector are needed to ensure organisations share information and develop innovative solutions at district, regional, and national levels.

I believe that by doing this we can make improvements in electives and improve the outputs of our public health system.

Today, I’ve outlined some of the areas where I see need for improvement in elective services. I call on all of you to take these messages back to your own organisations and look for areas where you can make improvements and work in collaboration with other organisations.

Thank you for your time today, enjoy the remainder of your workshop.


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