Financial Review Debate — Ministry of Health

I am pleased to have the opportunity to speak to these very important appropriations. I note that the appropriations sought for Vote Health for this year were $9.6 billion—a huge amount of money, and an increase of 11.3 percent on the year before. In 1999 the amount sought was $6.6 billion. So under a Labour Government we have seen an increase of $3 billion in 4 years, yet all the problems in health are still there—many of them much worse. I have diligently asked all the district health boards in the country whether there are any measurable improvements in health outcomes that they can tell me about, and they have unanimously said “No”. Despite $3 billion of extra money going into health, they said there have been no improvements in health outcomes.

A little earlier we heard Moana Mackey talk about Labour’s welfare strategy. What we know about that strategy is that it has, in the last 5 years, resulted in a 39 percent increase in the number of people on the invalids benefit and the sickness benefit. That is what has happened to health under Labour over the last 4 years. Just recently two top academic surgeons—one from the North Island and one from the South Island—told me that the surgical waiting lists are worse than ever before, despite all the money that has been thrown at them.

There is no doubt that in health there is infinite demand and finite resources, and each scarce health dollar must be put to the best possible use. Yet what did this Labour Government do? Firstly, in 2000 it developed the biggest health bureaucracy ever conceived in New Zealand. I want to repeat what Helen Clark said in 1994, when she was Leader of the Opposition: “Why does he not tackle the costly, inefficient, bureaucratic, top-heavy health structure that his Government has put in place? Why, for example, does he not tackle a Ministry of Health in which never have so many people been employed to do so little?”. Well, in the chair today we have a Minister of Health who said that Labour would decrease the number of people in the ministry by 25 percent, and they would go to the district health boards. What happened? The number increased by 25 percent. There were 900 people in the ministry in 1999; now there are over 1,100. The Minister said that the number would decrease by 25 percent. Instead, we got 21 district health boards with all their plethora of committees, not to mention the 76 primary health organisations.

There is no doubt that Prime Minister, Helen Clark, and Minister of Health, Annette King, have been determined to create one of the most complicated and inefficient health bureaucracies in the history of New Zealand, if not mankind. This is what Helen Clark said in 1997 in a speech to the Respiratory Health Services conference: “I know all the arguments about getting better value for money in health spending. I do believe that effectiveness and efficiency in health services is of the utmost importance.” Let us see what the reality was—and it comes from the Health and Independence Report 2003. A table in the report shows that the total number of surgical acute and elective discharges in 1999 was 160,000 and that by 2003 the number had reduced to 157,000. What is worse, when we go to the Health and Independence Report 2004, we do not see any such table. It is just not there. It is too embarrassing.

As a report card, the financial review of the Ministry of Health from the Health Committee is very positive. One would not think so if one listened only to the previous speaker. He made a highly political speech but failed to tell the listening public a single thing that a National Government would change. I will tell the listening public why that is so. Don Brash has already told New Zealanders that National will not change the “highly complicated, bureaucratic system” that this Government has set up. He said there are no votes in it. Mr Don Brash said that the public have no appetite to change the health system. Why does he believe that? He believes that because New Zealand saw a decade of “health reforms” under the previous National Government. They want to talk about bureaucracy! We had CHEs, four RHAs, and one THA. Then we had an HFA, 23 HHSs, and a plethora of organisations—business units, etc.

The changes that have been made by this Government have been overwhelmingly supported by the health sector of New Zealand. Its representatives tell me—and they tell Dr Hutchison—that they do not want another round of changes. They do not want to throw out 21 district health boards. They do not want to change what we are doing. They want to consolidate what we have in New Zealand; they want to get on with the job.

So Dr Hutchison owes it to the Committee tonight to tell New Zealanders what National would change. Will it get rid of the 21 district health boards? He talked about bureaucracy, but do members see that he forgets that there were 23 hospital and health service providers—not 21 district health boards but 23 hospital and health service providers—not to mention the huge bureaucracy that was in the Health Funding Authority. Let us remember that the chief executive of that authority earned $27,000 a month as his pay and worked three days a week. We can talk about the waste and bureaucracy we had in the past; New Zealanders are not keen to see such changes. So I say to Dr Hutchison that he can wail all he likes and make the political points, but then he should tell the people of New Zealand what a National Government would do.

Let us talk about the Health Committee. I have heard a report from the select committee that is totally different from the one Dr Hutchison heard. I am sure my colleague the chair of that committee will talk about it in a moment. I know that boards appeared before the select committee to speak to their financial reviews, and they told Dr Hutchison—although he may not have wanted to hear it—of the very, very good things they were doing in primary health care. They are reaching out to those people who have diabetes or cardiac conditions. However, that member, who was a health professional, asks where the health outcomes are. Anybody who understands health knows that if people want to track health outcomes they track them through morbidity and mortality. Dr Hutchison will see the improvement—even in the short time we have been in Government—in morbidity and mortality. Now, that is interesting because that is how it is measured—not by asking the question: “How many people do you think you have saved today?”. I do not know what questions Dr Hutchison asked, but he was told of the projects and programmes that have been put in place. We measure health in the same way that other countries do—that is, around morbidity and mortality.

It is interesting that we have seen for the first time an improvement in the health—mortality and morbidity—of Māori. That is one area where we have had a huge discrepancy in New Zealand. We know that Māori people in New Zealand do not live as long as other New Zealanders. We know that the difference in life expectancy can be as much as 10 years compared with other New Zealanders. We know they get sicker than other New Zealanders, but we have started to see improvement. Is that not good? Is that not what we should be measuring in the way we run our health systems? That improvement certainly did not come out of the policies of the 1990s.

I do note any absence of rebuttal of the facts contained in the Health and Independence Report 2003, which showed that 160,000 operations were carried out in 1999 and 157,000 in 2003.

💬 Hon Brian Donnelly: How many people are healthier, then?

Very few. But we have just heard the Minister talking about how we measure health outcomes, and she talked about morbidity and mortality. Well, if the Minister really wants to know, I can tell her that morbidity and mortality have been decreasing in New Zealand over the last 120 years—and so they should be. What we have not seen in the last 5 years is a sudden measurable decrease, under the Labour Government. Any improvements are probably the lag from the benefits of the last 10 years under National, in actual fact. There is always a lag with morbidity and mortality, and the Minister certainly has a very large lacuna when it comes to knowing that.

I turn now to the question of Ms Clark, and the point she made in saying she knew all the arguments about getting better value for money in health spending. After all, she indeed was the Minister of Health in 1989, when the Auckland Area Health Board was so dysfunctional that she had to fire her own husband as well as the entire board.

💬 Steve Chadwick: Stop raving on.

They say I am raving on, but I see almost a déjà vu situation. We have an Auckland District Health Board with a deficit of $44 million this year, and next year the board is due to have a deficit of $84 million. So let us have a look at what Ms Clark said in 1997: “The deficit funding of the public sector has to stop. A Labour Government will be looking to negotiate with our public health sector what we need to provide and the cost of providing it. We should fund a balanced budget for our public health services, not a deficit budget.” Well, I ask the Minister how it is that the Auckland District Health Board this year has a deficit of $44 million, and is projected next year to have one of $84 million. The Minister should be embarrassed about it, and I hope she will do something about it in this Budget, because the legacy that she has left in the Auckland District Health Board over the last 4 years is a disgrace. It is very much like the disaster we all know about that was left by Helen Clark in 1989. We have a health board crippled by problems that have occurred during the time of this Government.

But let us get back to the scandal of waiting lists under Labour. That party’s members ranted and raved during the 1990s about waiting lists, yet under Labour we saw one of the biggest deceptions in the history of health when it said it would fix the waiting list but took 25,000 people off that list and sent them back to their general practitioners. As a constituency MP, I know that the most frequent visitors I have in my electorate office are people who say they cannot even be seen in order to be put on the waiting list.

Under this Government, if one happens to have common things like varicose veins, hernias, haemorrhoids, or gallstones, one cannot be seen unless the condition is very severe. Again, I have asked every district health board I have seen at the Health Committee whether they will do those common operations. They say no, unless the condition is very severe. That means that those patients come into hospital, the operations are complicated, the recovery is complicated, and those individuals often take a long time off work, because they just cannot get to work because of those common difficulties. It is a disgrace that under this Labour Government, which has put so much into primary health care and is planning to put in another $1.7 billion in total, although one might be able to get to the doctor, nothing can be done about it when one actually gets there in terms of some of the common problems.

This review definitely makes interesting reading, and one of the issues discussed is the urgent need to address aged-care funding for our senior citizens. One of the true measures of success for any Government is the care that is provided for the most vulnerable in our society.

We had the Prime Minister telling Parliament that Labour would look into funding pressures in the aged-care sector, and I know that it has done so. But the bottom line is that one cannot build a reputation on what one intends to do. That sector is still waiting to receive the increase in funding it was promised. The Government promised a 3 percent increase unconditionally, but the funding has not yet been passed on to rest home providers. Most of those who enter rest homes do so because they can no longer live at home and they need to be looked after. But these rest homes are not hospitals, even though the majority of funding for them comes from the Government’s health budget. We must ask when that additional funding will be passed on and how much longer those rest homes will have to wait.

The fact is that there is simply not enough money going into elder care. There has been no increase in fees for many years, and that issue needs to be addressed. Many rest homes are operating at a loss, and no one can afford to sustain a loss for a long period. Then, what do we see? We see that providers are literally forced out of the sector and the resultant care they had provided vanishes with them. Chronic underfunding has already forced the closure or sale of dozens of rest homes and private hospitals right through the country, and we regularly hear of more instances of that happening.

There are between 850 and 900 residential care facilities and geriatric hospitals throughout the country, and they cater for a minimum of 42,000 people. We know that the number is far greater than 42,000, as that is the number on the Ministry of Health database is for subsidised residents. We need to be very aware that we have an ageing population, and that we will require the services of those residential care facilities.

I heard the very same pleas for funding when I attended the launch of HealthCare Providers New Zealand, a new organisation formed to represent the rest home industry. Aged-care facilities are watching very anxiously as rest homes are being forced to close. To date, more than 2,000 rest home beds operated by religious and welfare organisations have been lost or are up for sale. If too many providers exit from this sector, the choices will become extremely limited.

We also have a second crisis within the aged-care industry: those who work within the sector are seeing their wages turn into dust. The pay for those who provide the service must be addressed. We cannot continue to rely on the goodwill of those working within the aged-care sector to accept substandard pay, because rest home carers are among the lowest paid in New Zealand. In today’s Dominion Post we also read that: “The Government has been accused of forcing care providers to employ staff as ‘slave labour’, and of crippling services for those in need with chronic underfunding.” So the Government needs to be very aware that if more is not done in this particular industry, the fall-out will be totally devastating.

It is a sad fact that growing older is becoming very difficult in this country. For many elderly New Zealanders, the future looks bleak. At the end of a productive life, it is not too much to expect to receive care when it is needed. Although we acknowledge that some responsibility for that care does initially lie with the family, we must also acknowledge that sometimes it is just not possible to cope with a needy parent, and that is where the Government can help. This is an area that needs urgent attention. Funding must be sufficient to ensure quality care in the aged sector, and we definitely owe our elderly that. It is an area that we do not want to see fall over. We have seen the demise of many rest homes, such as those run by the Salvation Army, the Methodist Mission, and some of the smaller private rest-home providers. Last December the Salvation Army announced that it would close rest homes.

I am pleased to take a turn in the debate on the financial review of the Ministry of Health, especially following the Minister of Health, to address some inaccuracies from the Opposition spokesperson on health. I want to remind him that in 1995, 85,000 people were on the elective waiting list—and it was a waiting list, not a booking system—and 50,000 people were taken off it. We do not forget that.

It was very interesting to find the Opposition spokesperson on health talking from a slash-and-burn perspective. Of course, the member is a surgeon and can look at health only from a surgical perspective, whereas this Government and this financial review of the Ministry of Health started to turn the tide to look at addressing the decade of disparities that we saw throughout the 1990s. We heard about the availability and the roll-out ahead of time of the primary health organisations, which are starting to look at some very, very exciting health disparities, and that report affirms those disparities. The primary health organisation roll-out is ahead of schedule. It has already targeted the under-18s and the over-65s. We are now targeting the 18 to 24-year-olds. This year one of the interesting perspectives we heard from the Ministry of Health was about looking at some complex patterns of care, Care Plus, that are emerging from primary health organisations now that those organisations are getting on with doing the business.

This financial review of the Ministry of Health was a very positive one. I have been at four such reviews previously, and this is the first time the ministry has had an absolutely clear understanding of where it is coming from and where it is going to. That was absolutely clear in its presentation to the Health Committee, because we actually got on to some rather small and insignificant points that were of interest to individual members, without even worrying about or spending a lot of time on the big issues. We heard about aged care being devolved out to the district health board sector. The funding has been devolved; the issue is not about how it is being devolved. When we have gone to the district health boards, they have said: “Good job. We’re glad it has come to us.” This is the last bit of the puzzle that they want to get right, and why do they want to do it? It is because they have democratically elected boards. They know their communities. They go out and consult with our communities through some of the committees they have set up.

I point out that the perception that there are burgeoning costs in the health sector in administration and management is simply turning out to be not true. In my own district health board, Lakes District Health Board, management costs in 2000 under the old Crown health enterprises were at 11 percent, but now those management and administrative costs have dropped to 6 percent. I hope that the member opposite is listening. The drop in management and administrative costs in the district health board sector has been absolutely astonishing. Mark my word, those facts are real. Management and administrative costs in the Lakes District Health Board went from 11 percent to 6 percent. It is a mean machine that is focused on keeping people well and not on obsessing on waiting times for surgery.

In fact, we heard from the Ministry of Health that it had started to look at the wonderful roll-out of orthopaedic surgery. Over the next 3 years, $130 million will meet the demands we face in the electorate. No one at all has come into my electorate office concerned about the orthopaedic waiting time, and I have a very busy electorate office. There is some degree of satisfaction, too, to see that after measuring transparent waiting times for surgery, the Ministry of Health, along with the Minister, has agreed that the next chunk of work will focus on cataracts. That is something I am sure all of us will be very pleased to see. We want to keep people well and to reduce the disparities in health—the decade of disparities we inherited.

I want to talk about the widening gap between health wellness and disease management, and about the disparities in health under the previous administration, which brought about bottom-line financial fatigue in Crown health enterprises. Now that district health boards are not focused on debt management alone—by being accountable as companies and by attempting to make a profit in the health sector, which was what we faced for a decade—they are starting to say that they are getting out there with their annual district plans, working with their communities, and targeting the reduction of inequalities and disparities in health. We heard about targeted programmes for diabetes and cardiac disease. That was incredibly exciting. Morbidity and mortality are our indicators of effectiveness.

I rise on behalf of United Future to speak to the financial review of the Ministry of Health. It is great to be involved with a party that commits itself to positive politics. I thank the Minister of Health, Annette King, for having a very wide open door towards our party, whereby we can approach her with solutions and suggestions and receive a welcome from her. She listens to what we say and she considers it seriously. We are very proud, for instance, that in the last Budget we had a hand in securing the extra $250 million over the next 4 years to ensure that the Government can follow through on its commitment to the Mental Health Commission’s blueprint. However, I would be remiss, as a member of a party separate from the Minister’s, if I did not express to the Minister some concerns that we want her and the ministry to consider as a way forward in this area.

We signal that we have some concerns about the underspending of blueprint money in some regions. We understand that the Minister’s priorities for spending in the primary health services have been to layer into primary health organisations, firstly, inexpensive or free GP visits for the under-18s, and secondly, funding for GP visits for the over-65s. We expect that the Minister’s third priority will be the funding of a community level of primary mental health service. We welcome the opportunity for that to be funded through primary health organisations. However, the concern remains that if we are under-delivering now on current levels of funding for mental health services, we need some assurances that the services offered in terms of desperately needed primary interventions for those suffering from ill health will reflect the money allocated. United Future is keen to see clear provisions for psychological therapies to be funded with as much enthusiasm as pharmaceutical treatments currently receive.

The real crisis facing our health system is threefold: workforce, workforce, workforce. Shortages plague us in both high-level tertiary specialist services and the vital aged-care sector, with caregivers who deal with New Zealand’s most vulnerable citizens—who are in the most vulnerable season of their life, and where dignity is absolutely essential—being paid the most appalling wages and working under the most appalling conditions. That problem will not go away; it will only get bigger, and some long-term planning in that area is absolutely essential.

Another concern we have relates to core child health services. We believe that there is a huge need to overhaul and review what we are presently offering. The eight Well Child health checks need to be monitored more closely. We need the ministry to provide us with the data to assure us that the coverage of those Well Child checks is as complete as possible. We are hugely concerned, for instance, about child dental services. I say to the Minister that we face an extremely Third World condition in the Hutt at present, in that the Sisters of Compassion are funding a dental service on a Saturday morning to make up for the shortfall in that area. I think that the problem is more widespread. Bay of Plenty schools have reported that they have children who have not been seen by a dental therapist for 2 years. We really think that child health is a huge area.

The Vision Hearing Screening Programme is particularly dear to United Future’s heart. We are deeply concerned that that is a flawed screening programme that is giving false information to parents and teachers, and that large numbers of children are slipping through the cracks, going undetected, and failing in our education system, purely because they cannot see the work in front of them or have a hearing impairment that has gone undetected. We urge the ministry to do a serious review of that screening programme.

We are also concerned about child mental health services. We agree that, again, workforce development will be needed. We are concerned, as others are, about the overprescription to children of Ritalin. We encourage the ministry to make sure that it monitors that, and we encourage the Minister to keep an eye on that core child health service.

I thank members for their contributions to and comments on the financial review, which, as I said in my opening remarks, was a very positive one for the Ministry of Health. In fact, the ministry received a very good report card from the Audit Office. Those who take the time to read the review will know that there are very many good things outlined in that report. I thank the members of the Health Committee for the report they have given to the Committee of the Whole House.

I will deal with some of the issues raised by Judy Turner. In the first instance, she raised the issue of child health. I share her concerns about child health, particularly in the area of dental health, and about our ability to provide a network of dental health services to children and adolescents in New Zealand. Members will be aware that two major reviews of the way we will provide it have been done. In the next 3 months I will announce the total repackaging of the way in which we provide those services, including the capital investment that is needed. One of the great tragedies, however, is in our ability to provide that service, because we have such a shortage of dental therapists.

💬 Darren Hughes: And why is that?

My colleague may well ask why we are unable to provide that service. For over 80 years, Governments provided training for school dental nurses, followed latterly by dental therapists. They were trained in three places in New Zealand: Christchurch, Wellington, and Auckland. In my day, about 80 people were trained in each of those schools per year. In the 1990s, every school was closed—no school was left open by the end of the 1990s. How did we think we would train a workforce to do dental and oral health in New Zealand if we did not have a workforce to do it? I have no idea what went behind that thinking.

The first new training course was opened in 2001 in Dunedin. It is a degree course for dental therapy. The second course opened in 2002 at the Auckland University of Technology, and it also is a 3-year degree course in dental therapy. It takes 3 years to train people. We got our first graduates from Otago last year. We got our first graduates from Auckland 2 weeks ago. We need 40 graduates per year just to replace what we have now.

When I hear National Opposition members making comments about the Government’s inability to provide dental health services to children, it makes me sick, because we cannot provide the service without the workforce. We will have 40 graduates per year by next year. It has taken determination by this Government to put that in place. Otherwise we would not have had that workforce and we would continue to be unable to provide it. I know the concerns of both Barbara Stewart and Judy Turner. They have raised them many times, and I know they are genuine in their concerns. This is a good opportunity for me to set out once again why we have the problem. That is not an excuse; it is the problem. We will overcome it, and I believe that we will overcome it by next year, when we will see children once again being recalled after no more than a year.

Over the last 5 years we have seen a huge investment in mental health. We undertook to implement the Mental Health Commission’s blueprint for services, and we have seen almost a doubling of funding in that area. Judy Turner raised the issue of a drop in access. I need to inform her—I do not know whether the select committee was told this—of one of the problems. From July 2004 we required service providers to provide us with data on diagnosis but, in fact, we did not collect all the data. The data is incomplete, which is one of the reasons why we do not have full data on access. Organisations are required to provide the data by March this year, so we will see the genuine level of access then. One of the problems is that we do not record what services are provided by non-governmental organisations and, as members will know, non-governmental organisations are increasingly becoming the providers of services outside the acute care services provided within hospitals. So being able to capture the data as to what is being provided by those organisations is really important.

I am pleased—and I know that Judy Turner will be—to see the huge improvements that have been made in child mental health. It is not good enough, but I invite members to look at what we started from. If members go back and look at the figures provided on page 7 of the report, they will see that in June 1998 we were funding 24 inpatient beds for children. Now we are funding 56. We had 322 fulltime-equivalent clinical staff. We now have 739. In 1998 we had no day residential or respite care packages for children. We now have 113. So there has been improvement. We still need more.

Barbara Stewart raised the issue of aged care. The Government shares many of the concerns she raised. I am pleased to tell her that my Associate Minister Pete Hodgson is involved with a working group on long-term sustainability for aged care, because it is an issue we will face into the future. Most of us here are baby boomers. We are going to live a long time and want a lot of services, particularly services for older New Zealanders. Ensuring that we have that long-term sustainability is really important. That work will, I think, be very significant. Also, the member asked when the 3 percent will be passed on to aged-care providers. It will be passed on as soon as they sign their contract. The Government has approved the money. It is there for the providers. They have to sign the contract. I hope that that happens soon.

Finally, the National member Paul Hutchison took a second call and raised a number of issues, including the issue of deficits. It is interesting that we rarely hear about deficits today. That is because we no longer run what is called the “second chequebook”, which was a hallmark of the 1990s. Boards were able to run up deficits, and then the Minister of Health, with the Minister of Finance, would sign off a cheque to cover the deficit. Now there is only one funding stream. Boards are required to live within the funding they receive. When we look at the deficits across this $10 billion sector—most of which goes to the district health boards—we see that the deficit for the last financial year was around $80 million. I remember that around 1997-98 it was over $200 million on much less money. Paul Hutchison said that the sector was worth around $6 billion. It was probably worth about $5.5 billion at that stage, and the deficit was over $200 million.

He also asked about Auckland. Most of his speech went back to the 1980s. He did not talk about what a National Government would do, but he went back to Helen Clark and the 1980s. He talked about the Auckland District Health Board and its deficit. I would like the member to reflect on why it has a deficit. If he had asked the chairman of the board, I am sure he would have been told that the major reason why Auckland has a deficit is the shoddy decision made prior to the 1999 election to build the Auckland Hospital. The deficit almost reflects the underfunding of that project, because there was no business case. The project was signed off in Jenny Shipley’s office just before the election.

💬 Steve Chadwick: They were told that.

I am told that the select committee was told that. There was no business case, there were no real costings, and when the building was done the project was well over the proposed cost. [Interruption] That is the absolute truth. I say to Bill English, who is very ashamed of this, that he should speak to the chair and the members of the Auckland District Health Board, who will tell him never again to build a hospital with that shoddy approach. National did the same thing in Wellington. It promised a new hospital for Wellington, a few minutes before the election, at $150 million. There were no real costings, it was never able to be built for that sum, and once again we have had to fix up the health mistakes of the past. We are prepared to do it whether or not it is the workforce or buildings. Those are just a few of National’s mistakes. It failed then and it would fail if it ever got another chance.

Report noted.

Ministry of Agriculture and Forestry