Debate on Crown Entities, Public Organisations, and State Enterprises — Pharmaceutical Management Agency

In March the Government required the Director-General of Health to write to eight district health boards around the country to threaten them with an upgraded level of monitoring and the removal of their early payment situation if they did not improve the level of their performance of what are called the elective services patient flow indicators. The ministry’s letter follows the revelation in Parliament that despite, apparently, billions and billions of dollars being put into the public health system in the last 6 years, fewer elective procedures are being performed. That also showed that fewer surgical procedures were being performed compared with 5 years ago. As a result, the Ministry of Health wrote to a number of district health boards to threaten them with increased monitoring by the Government, and to send a very clear message that their current performance was concerning and that they must move to compliance with those standards.

That is why we have seen thousands and thousands of New Zealanders culled from waiting lists in the last few months. We already know that about 14,000 New Zealanders—

💬 Anne Tolley: Fourteen thousand?

Hon TONY RYALL:—14,000—so far this year have been culled from the waiting list to see a specialist. On top of that, we know that now almost 9,000 New Zealanders have been culled from the waiting list after seeing a specialist and being told by that specialist that they need an operation and would benefit from having such an operation.

In the district health board considerations that the Health Committee conducted, district health board after district health board confessed to the select committee that people have to be sicker today to get an operation than they needed to be 5 years ago. That is what the Auckland District Health Board, the Waitamatā District Health Board, the Counties Manukau District Health Board, the Capital and Coast District Health Board, and the Canterbury District Health Board said. This paints a picture of an elective services system in crisis. Fewer New Zealanders are getting elective surgery today than were getting it 5 years ago. That is very serious when we consider that the Government has made a huge investment in the health system, yet fewer people are getting seen.

What is frightening, in the words of Dr Frizelle, a leading cancer specialist in New Zealand, is that many people are being dumped off a waiting list and sent home—some to die. On top of that concern, salaried medical specialists have described what the Government has under way as dangerous and risky. The Minister of Health, Pete Hodgson, has not responded to that criticism. Senior medical specialists are saying that the cull the Government has under way, directed by these letters that the Minister instructed the Ministry of Health to write, is dangerous and risky, and, using the word of one of New Zealand’s leading cancer specialists, frightening.

We can understand why ordinary New Zealanders are worried about this Government’s handling of the health system. They are worried because there is a major disconnect in the Government’s policy. The Government is saying that it wants to increase access to primary care, and to get people who do not go to see general practitioners to see them in order to get care. It is a laudable principle. More people, apparently, are going to see general practitioners, but general practitioners are saying that those people need to go to hospital to get dealt with, and to be seen by specialists, because they have a secondary need. But when people get there, they hit a logjam.

As the Ministry of Health has said in its own documents, the Government’s approach to electives is focused solely on cutting waiting lists, not on increasing the number of elective procedures. That is what the Ministry of Health wrote to the Minister of Health. The Government’s elective policy is more about cutting the waiting lists than it is about focusing on additional elective procedures for New Zealanders.

It is a great shame that the Health Committee did not get the opportunity to hear from the Hawke’s Bay District Health Board, and that we ended up producing a pro forma report on that district health board. I can tell members that if we had known what we know now about what has been going on in elective surgery in Hawke’s Bay, we certainly would have wanted to see that district health board, because what has been uncovered there has been just appalling. I can tell members that the National Party health team has really been putting the focus on health. The more focus we put on it, the more uncomfortable truths are coming home to roost for this Government.

Back in February the Minister of Health, Pete Hodgson, said, when he was asked, that the mark for anything in health will always be 5½ out of 10. Well, if we were to ask the people in Hawke’s Bay now, I would say that the Minister would definitely not get his 5½ out of 10, because 5½ is a pass mark, and, frankly, in terms of elective surgery in Hawke’s Bay, as around the rest of the country, this Government is getting nowhere near a pass mark.

If one district health board illustrates the sorry state of elective surgery under this Government, it is the Hawke’s Bay District Health Board. We have heard that 1,800 people just waiting to see a specialist for a first specialist appointment at that district health board have been dumped off the waiting list. Those people have not even seen a specialist. What was the precipitant for that? It was a threat, as my colleague Tony Ryall has stated, from the Ministry of Health that if the district health board did not come up to scratch and start to meet its target, and if it did not comply, it would be put under intensive monitoring. That district health board, like a number of others, received a letter that stated: “I anticipate you will move immediately to tackle the issues that underlie this position. As an indication of the seriousness attached to this matter, I must regrettably formally advise you that failure to correct current non-compliance will lead to the ministry reviewing your status on the monitoring and intervention framework.”

What did that mean? That meant that the management of Hawke’s Bay District Health Board had absolutely no option but to dump 1,800 people off the waiting list to see a specialist. Then what happened? The Prime Minister blamed the managers—it was the managers’ fault! What happened next? The Minister of Health said it was an ethical matter—that the doctors, general practitioners, and surgeons of Hawke’s Bay were acting unethically in removing those people from the waiting list.

💬 Hon Member: What does that mean?

Yes, what does that mean? What does “acting unethically” mean in this context? Really, only one person is to blame for this situation, and that is the person who has to take the ultimate responsibility—the Minister. People should not blame the general practitioners, surgeons, and management of Hawke’s Bay District Health Board; they should blame the Minister of Health. Because the sad fact is that the buck stops with him. He has to stand up and take accountability. We in the Health Committee have heard, week after week, from district health board official after district health board official admitting under questioning that, under this Government, people have to be sicker than ever to get an operation. It is harder than ever to get an operation now. People cannot just get any old quality-of-life condition fixed—people cannot get their hernias or their varicose veins fixed. A person has to be within sight of the pearly gates before he or she has a real chance of getting on an operating table. That is disgraceful.

The figures in Hawke’s Bay, however—those 1,800 people—are just the tip of the iceberg. When we started asking a few other questions, we found out that over 8,000 patients around the country were in exactly the same situation. The funny thing is that every time we ask how many people have been sent back to their general practitioners without getting a first specialist opinion, the number goes up. We thought the number was 8,000, until we asked questions in Parliament last week. The Associate Minister said they thought it could be 10,000 but that actually it might be as high as 14,000. So I would like Minister Hodgson to take a call today to give us the revised figure, because I am certain it will be higher. Every time we ask the question, the number goes up. In the meantime, things are even worse. Another 8,100 New Zealanders have been to their hospital, have seen their surgeon, and have been told they will be having an operation. Then, suddenly, they are told they are not having the operation any more. That figure gets worse, too. Last month we found that 800 more people were in that category—over 10 percent more. So now nearly 9,000 people are being told they will have an operation and then are being taken off the list.

I want to talk about Pharmac and the national medicines strategy. The question I want to ask is why New Zealanders have to wait so long. Over 8 months ago, during the election campaign, Peter Dunne said he would review the role of Pharmac, to ensure not only that pharmaceuticals would be made available at the most competitive price but also that the interests of individual patients would be taken into account when funding decisions were made. Last month it was announced that the long-awaited medicines review was finally under way, but that a consultation document would not be available until the end of the year—over a year after Peter Dunne promised it. There is more. It was also announced it would be another year before a final document would be ready. I say to colleagues that it looks as though it will be election year before a final report will be ready. How convenient that is!

No mention has been made in the national medicines strategy review of a forum where members of the public—ordinary New Zealanders—can express their views face to face. That is an appalling indictment. The main focus of the strategy will be on quality access and the rational use of medicines. I point out that there is an urgent need for an operational review of Pharmac. Applications for funding take far too long to be decided on. The average application in New Zealand takes about 3½ years, which compares with 9 to 10 months in Australia. There seems to be no rhyme nor reason as to how drugs are referred from Pharmac’s advisory committee—the Pharmacology and Therapeutics Advisory Committee—to one expert subcommittee or another. Sometimes that advisory committee thinks it has the expertise to make important decisions about complex drugs and complex situations, and bypasses the expert committees completely.

I will take as an example the saga of the diabetic insulin drug Lantus—a very valuable drug, according to the medical community. Following an application for funding in July 2004, the drug was assessed as being of only low priority by the advisory committee. Lantus was then referred to the diabetic subcommittee, which was fortunate, but it took a staggering 10 months to meet. When the subcommittee finally met, the expert subcommittee gave the drug a high priority for funding, a decision that was completely at odds with the advisory committee’s position. Now, 2 years later, it is hoped that a decision about Lantus is not far away. Incredibly, that rate of progress is considered to be quick by Pharmac’s standards.

I think Pharmac sometimes thinks it is doing a fabulous job. It is proud of the fact that pharmaceutical spending has flatlined over the last few years. It is proud of the fact that it takes over 3 years to fund drugs. When Pharmac told the Minister of Health that New Zealanders have access to more medicines than Australians do, it was very proud of that fact until it was pointed out that that included things like condoms, bandages, and peak flow meters. What an embarrassing oops! The reality is that New Zealanders are being short-changed on the total number of medicines, and also short-changed by the use of special authorities and other rationing mechanisms that mean the number of people who are eligible for drugs is severely restricted.

I have been led to understand that the Pharmac model has been praised internationally, and that countries like Canada are looking at adopting the model at this very moment. I doubt whether they will do so when it is pointed out to them that severely restricting the access to innovative drugs will have a negative impact on health outcomes, and also that Pharmac’s preference for being the sole supplier, as a means of getting the price lower, is risky and eliminates consumer choice. Although that approach has saved money, it has prevented patients—consumers—from receiving the treatment they need.

Pharmac’s approach has produced a rigid, divisive, silo mentality. Its antagonistic and hostile attitude has meant that a number of pharmaceutical companies have downsized or left the country completely.

💬 Dr Jonathan Coleman: Yes.

That is right. I say to colleagues that unfortunately tens of millions of research and development dollars are leaving with those companies.

💬 Dr Jonathan Coleman: Out of our economy.

Yes—overseas. I say to members that research and development money would not only help to fund new drugs and improve people’s access to drugs but would help to retain our doctors and attract them back from overseas.

Pharmac’s attitude has dumbed down the whole sector. In 2004 only 600 people were working in the pharmaceutical industry in New Zealand—down from 1,000 in 1990. Members can compare those numbers with Ireland’s. Ireland, which has a similar population to New Zealand, has over 12,000 people working in the pharmaceutical industry. I ask colleagues whether it is any wonder that New Zealand is considered to be a backwater.

New Zealanders deserve better than that; they do not deserve only a limited access to the drugs that Pharmac has denied them. Pharmaceuticals and early intervention with drugs can improve outcomes and save lives. Pharmac has been far too Scrooge-like in its whole operation, and it needs a complete and an utter review. The national medicines review does not go far enough, and it is not happening soon enough.

💬 Hon Tony Ryall: And it doesn’t involve the public.

It does not involve ordinary New Zealanders, who deserve the right to have a face-to-face meeting with Pharmac officials, so those officials can see the human toll that denying patients access to drugs has, and what that really means to ordinary New Zealanders and their families.

I will now talk about the district health boards and the waiting lists. I was told of a horrifying story last week. A woman in Waikato, who was aged 39, found a breast lump. That is a pretty scary situation for any woman, no matter what her age is. She found the breast lump and went the next day to her general practitioner, who acknowledged there was a breast lump and also found lymph nodes in the armpit. Naturally, the general practitioner wrote an urgent referral to the Waikato District Health Board. One would have expected the lady to be seen quickly and without any problem, but she was not seen quickly. In fact, she received a letter from the district health board stating it was very sorry, but it could not see her for 9 months—a 39-year-old woman with a breast lump!

💬 Jo Goodhew: That’s appalling.

It is appalling.

Although the district health board offered that woman a mammogram without a specialist appointment, I point out that that is bad practice. I have taught breast medicine over many years, and I say that is bad practice. One should never do just a mammogram in the case of a woman who has a breast symptom; a specialist has to do a breast check, an ultrasound, and a biopsy. That district health board was forced to take short cuts, and that is terrible. It was put in the terrible situation of being under-resourced, and all it could do was to send the woman back to her general practitioner with a mammogram, but without the gold-standard treatment that the woman needed. I say to colleagues that it concerns me that if the woman had decided to go with the mammogram alone, the mammogram might have been negative. A percentage of mammograms do not show up cancer. What could have been worse, just before Christmas, was that the woman would have had her mammogram and been reassured that all was well, so she would have gone off on her Christmas holidays thinking all was well. That would have been a worse situation for her to be in than to have had proper treatment.

The Waikato District Health Board breast surgeon explained, when asked why the woman had to wait 9 months, that it was short of a doctor at the breast clinic. I understand the lack of resourcing at the breast clinic was the lack of a breast physician. I say to members that I have been lobbying for breast physicians to be in district health boards for years and years. Breast physicians are an important resource, and they are not recognised in BreastScreen Aotearoa, which is a tragedy. They are cost-effective, they can be used in situations like that, and they should be in every district health board’s breast clinic. Breast physicians can see women in an efficient and a cost-effective way, so I hope the Minister takes up the challenge and looks at district health boards employing breast physicians.

Fortunately, the woman concerned found the money to be seen privately, which was good for her. But what would other women do if they did not have the financial resource or the family support to enable them to be seen privately? So I am very concerned about the waiting lists. That woman is just one example, but there are many examples of people being culled off waiting lists and being sent back to their general practitioners, when they should be seen by specialists. Those New Zealanders have earned the right to be seen by the public health sector within an appropriate time frame, and if there is a problem with regard to the workforce or money, then it needs to be sorted out here, right now.

I am greatly concerned about how general practitioners in this country are being told how to set their fees. They are being treated like people who cannot manage their own businesses. The Minister seems to be fighting with them all the time. They deserve better treatment than that. General practitioners do a very good job in this country. They are at the coalface for patients, managing them and being there for them on a daily basis. General practitioners deserve the right to be listened to and treated with respect. If they feel that patients should be seen by specialists in hospitals, then that should be utterly respected. They should not be treated in the way they are at present. General practitioners are being bossed around, bullied, and fought with. They deserve much, much better treatment than that.

Part of my interest in the health portfolio relates to the non-governmental organisations. Those organisations are quite diverse. They range from Plunket to the Order of St John, to health promoters, and so on.

I am not surprised the Minister of Health has not sought a call in this debate. What would he talk about if he did take a call? Would he talk about his vision for health? Would he talk about his action plan? I will tell members what he would talk about—us. He would talk about the National Party. When he had the opportunity to give his maiden speech as Minister of Health, he spent nine out of 10 pages talking about the agenda National has been setting in health and trying to explain why Annette King managed the portfolio so much better than he is. The Minister talks about lying awake at night worrying about the bird flu. I wonder whether he also lies awake and worries about why Annette King managed to have health under control as opposed to how it is going under him—and poll after poll shows that, under this Minister, health is turning into a disaster.

How was Annette King able to negotiate with general practitioners and get a successful roll-out of the increased subsidies, whereas this Minister is having trouble with significant parts of the general practitioner workforce in getting those through? Why, when the waiting lists were growing and growing, was Annette King able to be Minister of Health without that being too much of an issue?

💬 Dr Jonathan Coleman: It’s the Kyoto touch.

Yes. Why were district health board deficits growing and growing under Annette King without that seeming to be an issue? And why under Annette King was elective surgery going nowhere in this country without anything being said about it? Why is it all turning to custard on Pete Hodgson’s watch?

I will tell members what it is about. It is about a Minister who thinks he knows everything. That is what is being said in the health sector today. As we travel around the country talking to district health boards, community groups, and interest groups, one message is becoming clear: this Minister of Health thinks he knows everything and dares not take any criticism. We have seen his performance in this Chamber. Could he justify fewer New Zealanders getting elective surgery today than 5 years ago? No, he just gives a vein-popping performance, which his colleagues have counselled him against. Does he stand up in this Chamber and justify why he has dumped 14,000 people from specialists’ waiting lists, with another 20,000 at risk? Because that is what is at risk. If district health boards are to become compliant, as Poutasi wrote to them about in March, that is how many people would have to be dumped.

But do we hear any explanation of that from Mr Hodgson? We hear none at all. I wonder whether he has been to Annette King and asked her how she managed health like she did for 6 years, yet in the 6 months he has been in the job it has been nothing but a bad headline, with cartoon after cartoon showing him as a Minister who is under pressure and out of control. What is behind it? Maybe the Minister could take a call and tell us whether he has ever gone to Annette King and asked her how she had it under control when under him it is out of control. Let us actually hear from the Minister. Let us see whether he can go 5 minutes talking about his positive plan of action without mentioning the National Party. Whatever his plan of action might be, it will be in response to what we are doing, because more and more people in the health system realise that this Government’s rhetoric is all it has to offer.

Where is the real commitment to a strong and growing primary health workforce? Where is the investment in the workforce in this country? Where is the commitment to support private - practice general practitioners? Why is there a breakdown that has resulted in general practitioners issuing, for the first time in years, a red letter warning their members against the Government’s proposal? Where is his plan of action to provide more elective services for New Zealand? Where is his plan to stop the wasteful duplication and fragmentation in the health system? It is nowhere. I want the Minister to take a call and see whether he can speak for 5 minutes without doing what he did in his maiden speech—that is, see whether he can talk the whole time about his plan of action without responding to National’s.

I would like to thank Dr Jackie Blue for her contribution on the role of breast physicians. There are some things I would like to understand about that, and I wonder whether she and I might not share a conversation in the near future. I would like to understand some of the subtleties better.

I am so pleased we won the last election. It was fought around whether this country was to go forward with a bunch of tax cuts worth $11 billion over 4 years, or whether we were to invest in more services and better education, and give more attention to our nation’s infrastructure. It was fought around whether we were to build a nation or whether we were to have tax cuts we could not afford. Members can notice how I can listen—how we all can listen—to 25 minutes of drivel from the National Party without interrupting, and how, 25 seconds into my speech, Tony Ryall has got himself blathering like a Gatling gun. All he can do is try to talk people down. That is the sort of guy he is. Members can notice that the National Party did not speak about mental health or about older New Zealanders wanting to stay longer in their own homes. It did not acknowledge that mental health funding has doubled under this Government. Boy, are we proud of that! Boy, have we got some way to go yet! But that is really significant progress.

Members can notice the amount of money that has flowed through district health boards to help older New Zealanders stay in their own homes longer and to go to rest homes later, or temporarily, or, for the most part, not at all. That sort of money has doubled since the change of Government. Members can notice how the primary health care strategy will be rolled out one more step on 1 July this year, and will be rolled out in its entirety on 1 July next year, and how, by 1 July this year, there will be an investment of $540 million, near enough, into the primary health care strategy.

💬 Darren Hughes: National says it isn’t enough.

National does not know what to say. National wants to have tax cuts; and if it wants to have tax cuts, then it cannot afford a primary health care strategy. The primary health care strategy is the largest single change in the way we have delivered health systems since, probably, 1950. It is a remarkable change, and I want to pay tribute to those very many people in the primary health care sector and the Ministry of Health—policy makers and practitioners alike—who have contributed to the design and roll-out of that remarkable strategy.

I wonder why in 25 minutes we did not hear about one new hospital being built, even though 22 new hospitals have been built or are in the process of being built. So there is an investment in the infrastructure of this country; but in 25 minutes, members opposite could not get anywhere near it. There was no mention of the biggest vaccination programme in New Zealand’s history—not a mention. The number of children dying from meningococcal disease has already dropped by 57 percent and will drop further. That is a remarkable achievement.

What National did talk about was Pharmac, which is an interesting thing to pick on because Pharmac is an exercise in cost-effectiveness. If we had no Pharmac—if we had no reference pricing—there would be an increase in our health budget of $700 million, for which we would get nothing. So let us be careful when we start to criticise Pharmac, although I think the future for pharmaceutical purchasing will have to change somewhat. I noticed that Tony Ryall in his last 5 minutes, which we could have done without, spent all of his time, as he has in his interjections ever since—

The CHAIRPERSON (H V Ross Robertson): I am sorry to interrupt the Minister because I am conscious of the time, but I remind members on my left to look at Speaker’s ruling 57/3. Running commentaries are out of order. If members want to make a speech, they should take a call.

All that Tony Ryall could do was make an ad hominem attack. Has he not got something better to offer than a personal attack?

Actually, there is one point on which I agree with various National Party members—that is, we should not be putting people into a booking system for first specialist assessment, then not seeing them. We should not do that. The extent to which people are returned to general practitioners represents, in my view, a failure of the system. I do not think that that should happen. I think 10,000 is too many. I think 15,000 is too many. We have had that number for years—it is not recent—but what is really interesting is that, to offer a bit of perspective, 450,000 New Zealanders do see a specialist in the public system each year. So 10,000 or 15,000 people do not, and I do not think that that is good enough—I do not think district health boards are managing their front doors well enough—but 10,000 or 15,000 out of 450,000 is not total failure, either. It is a few percent, and for those 10,000 or 15,000 New Zealanders I do not think it is at all satisfactory. That is where I agree with National members, and that is why the letters have been going out saying: “Please manage your front door better.”

The same story goes for people who have been put on a booking system for a surgical procedure. We think that 7,000 or 8,000 is too many, but it is also the case that 107,000 do get their surgery, so there is a bit of perspective.

What do we know about what National members said that was wrong? Well, most of what they said was wrong. They said there are fewer elective procedures—wrong. They said there are fewer surgical procedures—wrong. They said that under Annette King the deficits went up—they went down. Pretty much everything National members had to say that was an apparent fact was wrong. Even the figure of 1,800 from Hawke’s Bay was wrong. All of the figures they mentioned that I took note of were wrong. What is more, not only were they wrong; they were intended to mislead. It is not OK to intend to mislead; it is a good idea to have some perspective.

However, the most important thing is that 8 months ago New Zealanders made a choice. They made a choice not to have massive tax cuts. For that reason, in 2 days’ time the Hon Dr Michael Cullen will announce a further increase in the health budget—

💬 Hon Tony Ryall: No, it’s already been announced.

Of course it has. It is $750 million in 1 year. If National had won the election, its Budget, 2 days from now, would have had a total new spend of $800 million—not in health, but in everything. In 2 days’ time $750 million extra will go into health through the Labour Government, because it can invest. The National Party wanted to give it away in taxes, and National members have the gall to sit there and say that things are not good enough. I say to National members that that is a point of view that they will have to reconcile internally because one cannot argue for increased expenditure and for tax cuts. We get to spend money but once around here, and that is why winning the last election was so important.

In 2 days’ time we will have a further investment in our health system. We will be able to deal with the priorities the Government has put into the public arena. I am happy to go through them. We need to get ahead of the curve on chronic disease. Whether it is Healthy Eating - Healthy Action, whether it is the Cancer Control Strategy, or whether it is further reduction in the prevalence of tobacco smoking or the amount that each smoker smokes, all of those things are key to the future of New Zealand’s health.

We need to make further progress in the health of older people. We need to make further progress, especially with funding, in that area. We need to make sure that the primary health care strategy is rolled out well, over the next 2 years, and that the move to a population-based approach in primary health is taken up fully. That will take some years, but that has become a priority for this year and for later. And there are a bunch of things we want to do for our children. We do think that neonatal testing for hearing is a good idea. We do think that more attention to child and adolescent mental health is a good idea. National members do not, because they chatter right through it. They yell in an effort to try to break up this speech. They just keep doing it. I do not know why they do not get laryngitis, but that is what they do. We need to pay more attention to the oral health of our children. The oral health of our children has plateaued. It has stopped getting better. That is not good enough. So we need to make progress—

💬 Hon Tony Ryall: Under Labour.

As it is under Labour, I will just say what happened under National. A National Government stopped training dental nurses. I do not know whether anyone can believe that, but National stopped training dental nurses. That, roughly, is the difference between the two parties. It is the difference between investment and disinvestment, and I rest my case readily.

Reports noted.

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