New Zealand Public Health and Disability Amendment Bill

I rise to support the second reading of the New Zealand Public Health and Disability Amendment Bill. This bill is all about increasing the efficiency and effectiveness of our public health system, and it has been supported widely. I thank the submitters for their thoughtful work, and everyone who was involved with the select committee process on this bill. Health costs are rising everywhere in the world, so in the face of a global recession and for the long term we need to get more bang for our buck in health care. With an ageing population and increased demand for new health technologies and services, the New Zealand public health system faces enormous fiscal challenges.

When the National Government came to power it commissioned an expert ministerial review group to make recommendations on how we could run our health system more efficiently and more effectively. The expert group developed a set of over 170 recommendations, and this bill progresses some of them. The bill is designed to drive better value for money out of the public health sector, with the intention of providing a framework to foster economies of scale through national and regional cooperation in the sector, and to reduce duplication and bureaucracy. It also provides a greater focus on patient safety and supports health professionals in their call for an independent, clinician-led agency to drive quality improvement across the health service.

The Health Quality and Safety Commission will be established as a stand-alone Crown entity, and will bring a focus on quality and safety not previously achieved. All New Zealanders are keen to see improved quality and safety in health care. Adverse health events—that is, when things go wrong—are tragic for individuals and families, but also they are very expensive. It is estimated that avoidable adverse events cost the public health service between $500 million and $600 million every year. Obviously we will never be able to be 100 percent error free, but even a 20 percent reduction in errors could save us over $100 million a year. That money could be reinvested in front-line health services.

The bill drives improved efficiency by encouraging the provision of shared administration, support, and procurement services across the public health system. Our goal is to improve health outcomes and cost-effectiveness by increased system collaboration across the district health boards, and for the planning and accountability of each district health board to take into account national, regional, and local requirements. In the past, one of the obstacles to increased collaboration was the wording of the current New Zealand Public Health and Disability Act, but this new bill provides a mechanism to fix it. In addition, to help facilitate collaboration at a local level, the bill enables the appointment of elected members to more than one district health board. It is hoped that that change will bring boards closer together, and improve working relationships, teamwork, and cooperation. To cover all eventualities, the bill also amends regulation-making powers relating to the arbitration and mediation to manage any disputes between district health boards.

This bill is part of the National Government’s move to dramatically improve health services in New Zealand. It is part of a drive to cut bureaucratic costs in health and to invest in front-line staffing. We have already increased the number of doctors and nurses working in the system. We have dramatically increased the number of people getting elective surgery. We have cut emergency department waiting times, and time spent waiting for cancer radiation treatment. We have also ensured that all cancer patients can be treated in New Zealand, rather than being sent to Australia, as happened under the previous Labour Government.

This is a good bill. It will increase efficiency and effectiveness. I commend the bill to the House.

I will first take up some of the quotes that the previous speaker, Nicky Wagner, used. I think I heard—people will correct me if I did not hear it—the phrase: “we need to get the best bang for our buck”.

💬 Hon Maurice Williamson: What does that mean?

Exactly—the member asks what that means. I think that is the whole principle here. Maurice Williamson does not know what it means, and he is supposed to be a Minister in the National Government. This bang for our buck is actually about redistribution, which is what happens in the policies of the National Government.

Let us look at the bang for the buck that we are seeing currently. We have seen cuts to accident compensation, to victims of sexual assault, to people who have been injured at work and are not getting back to work, and to people in this country who are hearing impaired. Under this “bang for our buck”, we see a complete redistribution of that money to—guess what—tax cuts. We see those tax cuts go very, very disproportionately to people on high incomes. So when Maurice Williamson asks what bang for our buck means, I actually congratulate him. Maybe he is not up with the play of this pretty sinister stuff that this Government is doing.

💬 Hon Maurice Williamson: I’m not; I never have been.

He said he is not up with the play. I appreciate that. I know that he has been quite a rebel at times, and I am saying to Maurice Williamson that he should be a rebel again. He should say that this is not bang for our buck.

We are seeing members stand in this House and say that this is the best bang we can get for our buck. We know that that is not what is happening. Do we commend efficiency in the health system? Of course we do. In fact, that was the way the Labour Government was going. This bill has two purposes: one is to establish the Health Quality and Safety Commission, and the second is a mandate for collective purchasing across the whole of the district health boards. Of course we in Labour support efficiency with purchasing and with the delivery of services. But if it is at the cost of local people, of consultation, and of people having a say in their health services, then we have serious concerns. Labour voted for the bill to go to the Health Committee, and we are not opposing it at this stage, but we are putting on record, as did the Green Party, that we will put amendments forward to this bill to ensure democracy and to ensure that local communities are having a say in health delivery in their regions, their communities, and their cities.

I heard Nicky Wagner say that under National we are seeing much more happening, that we see more bang for our buck, and that we see health services, the public health system, and hospitals delivering far more on time services. Well, that is not the experience that we have had. That is not the experience we are having when day after day we question the Minister on the health cuts under this Government. If we look throughout the country, we see older people with their $5 a day meals cut. We have seen their home help, which might be just a couple of hours a week to ensure that they can stay at home, cut. We have seen those services cut not just in Southland; when we were visiting our providers in Waitakere just a couple of weeks ago, we saw the same thing happening there. So when I hear members on the opposite side of the House say that this bill is all about bangs for the bucks, I share with Maurice Williamson in asking what it is all about. That was the question that that Minister asked, and it is a question that we share in asking on this side of the House.

We have no problem with raising quality or with raising purchasing powers, but, as my colleagues have said before me, we do have a problem with setting up another bureaucracy, with taking democracy out of consultation, and with communities not knowing whether health services will be delivered. Why do I say that? It is because I know how we got a full-service hospital in Waitakere. We got it under a Labour Government and we got it from a community that lobbied for it, a community that went through rounds of consultation and said “This is what we want in our community.” This Government is not doing that. The Government that was going to get rid of red tape and bureaucracy is introducing additional tiers and layers. Although we want money to be saved, we do not want those savings to be spent inappropriately; we would rather see them going into health services.

I think it is pretty rich for members to come into the House and say that we are getting far more bang for our bucks, when we are seeing cuts being made throughout the country. Tony Ryall calls it streamlining. That is the new term for cuts. We call it a cut in services and delivery. Because of funding cuts, older people have had their home support cut by district health boards; but the Government calls it streamlining. It could equally be said that the Government calls it bangs for its bucks. We do not think that cutting services for older people in New Zealand is getting more bangs for one’s bucks. We have had many calls to our offices from people who, despite what Nicky Wagner said, are not being seen. They are not getting fast service or their operations on time, to say nothing of the escalating cost of doctors’ visits. We do not see that as more bang for our bucks.

We see a Government that is possibly—and we would not say this categorically, but it was raised by many submitters—setting up something that is quite risky. In their submission to the Health Committee, senior doctors called the restructuring proposal for the Southern District Health Board risky and erratic. The Nurses Organisation said that it believed that these proposals were removing nursing leadership from the region. We in Labour do not think that cutting services, particularly services to older people in our communities, is a good bang for the buck.

Of course we support this bill as it is. We supported its referral to the Health Committee. The Labour and Green members on the committee listened to what the submitters said. We will be putting forward a number of amendments to ensure that should this bill come into effect, it will be democratic, it will not be another level of bureaucracy, it will meet the needs of the community, and it will ensure that local communities have a say. Can we ensure that health services will not be cut for older people, and that people will get the medical and surgical care they deserve and need? No, we cannot ensure that, but we certainly can assure the public that in the Committee stage of this bill Labour will be putting up amendments that ensure the local voice will be heard, and that the people who know about the health services—because they are living them and breathing them—are part of the consultation process.

I hope that Government members listen to that and that when we look at bang for the health buck, we look at the big picture and we ensure that New Zealanders receive the health care they need, deserve, and invest in, that care is put into health, and that health care delivers. Thank you very much.

Last year, during the financial review by the Health Committee of the Counties Manukau District Health Board for the 2008-09 financial year, a single comment was made by the chief medical officer about doctor productivity that I think summed up the tangle that the New Zealand public health system had got itself into at that time. He pointed out that an analysis had been done of doctor productivity and the measurement of patient contact time by their specialists. In 2000, I think it was, the specialists at Middlemore Hospital spent about two-thirds, or 67 percent, of the working week in front of a patient. By the end of 2008-09, that proportion had fallen to below half of their working week: to about 47 percent. I have no doubt that some of that was necessary and well intentioned, but at a time when doctors at Middlemore Hospital were already spending one-third of their time away from patients, and when there was a massive injection of cash that led to about 900 more Ministry of Health staff and about 3,000 district health board staff in departments like funding, planning, information technology, and data gathering—some of which should have meant less paperwork for doctors—despite all of that, doctor contact time with patients went down massively.

Billions of dollars were poured into Vote Health, but services in real terms were static and in many areas were dropping. Doctors, nurses, and allied health professionals were becoming increasingly frustrated at the red tape that prevented them from doing better. They told me that they were feeling increasingly marginalised from the decision-making process in their public hospitals, and that they really wanted to improve the quantity and quality of the care they were providing to their patients, but they were being prevented from doing so.

Yes, it is about more bang for the buck. I make no apology for the comment made by my colleague. Whatever we call it—perhaps value for money—it is the responsibility of any Government to make sure that resources are spent in the right places. This Government has pushed resources from the back office to the front line. The Opposition might scoff at what that means, but the results have been, by any measure, astounding.

Surgery is something that I know pretty well, and it has been static at about 125,000 surgeries per year for the last 10 years. In the first year under the National Government, the number of surgeries went up by nearly 13,000. That is on a very small increase in the baseline, relative to what had been the case in previous years. There have been very good improvements in the timeliness of patients receiving chemotherapy treatment. The number of publicly funded chemotherapy clinics is up by a quarter, or 25 percent. Emergency departments are seeing their patients faster. Before this Government came into power, 80 percent of patients were getting out of there within 6 hours; it is now 87 percent and climbing. That is because doctors, nurses, and our allied health professionals are now feeling more re-engaged, more involved, and more listened to when it comes to decision making in their district health boards. So we are already on that journey, and the New Zealand Public Health and Disability Amendment Bill continues that process.

I want to talk about planning issues, because I have to laugh at the concerns about what changes will be made to the public consultation and planning process. I do not know whether anybody has been to one of those planning meetings, but I used to go to them in the Otago area. I cannot remember a public meeting on the annual plan for the Otago District Health Board that had more than about 12 people at it. The fact is that it was more about process than it was about outcomes. One could pick up one of those plans and read it and be none the wiser about which district health board it was for, because they were so generic

I think these are really good improvements that will improve the quality of the planning and hopefully make the plans much more meaningful to the individual communities that boards are meant to represent. This is a good bill. I think there are still a few things we need to talk about in the Committee stage, but I look forward to the bill’s progress and I commend it to the House.

It is indeed an honour to speak on the New Zealand Public Health and Disability Amendment Bill. With the sad departure of our colleague and friend the Hon Luamanuvao Winnie Laban, I am now on the Health Committee, so it is good to be thrown in at the deep end, I guess. Be warned, I say to members, an old cynic is coming to the Health Committee. I have been around for a wee while, and I smile when I read some of the notes on the bill and hear some of the speeches, because I can remember Jenny Shipley as the Minister of Health making statements on the efficiency of having many Crown health enterprises and competition in health. Even in Christchurch, two Crown health enterprises were set up on the basis that the competition would deliver efficiency, better outputs, and more money to the front line. At the same time, the National Government brought in charging for hospital beds, so that if someone ended up in hospital, that person paid about $100 per night. That was abhorrent, and it contributed to the defeat of the National Government and its silly ways in 1999.

💬 Hon Maurice Williamson: 9 years later!

It was 9 long years of that National Government— Mr Williamson is dead right. He can remember all those things, because at that time the policy said that if we had many, many competitors and participants, and a split of funders and providers, plus everyone else, and if we had them all fighting and scrapping, then we would see efficiency. Well, when Labour came into Government we realised that that simply was not working. We put billions of dollars into the health system, and we brought some alignment.

💬 Hon Lianne Dalziel: And we put up nurses’ pay.

We put up nurses’ pay. We had a huge amount to do to retain people in this country. We realised that there had to be better alignment and that there had to be strategic thinking in health. This bill talks along those lines, but I have not seen strategic thinking coming from National, or from many of the champions of business that National members go on about and use as exemplars in terms of business management. Well, I welcome any move towards strategic thinking, but, unfortunately, Tony Ryall has moved away from that. In respect of strategic thinking, we said that primary health care is the smartest way to spend money in this country. I know there are members opposite who understand health and who know this is true. Getting in at the front line early on, reducing the cost of seeing general practitioners, and getting medical help when needed reduces the cost over time.

But since National came into power, we have seen an absolute determination to focus on measurements, not on long-term strategic goals in public health, mental health, or areas where money spent can reduce our long-term costs. What has the Minister done? He has measured hip replacements—and the odd knee, but knee operations are a bit more complex. The measurement of the success of the health system has been on elective surgery once again. That is destined to fail, because it is short term, populist, and political.

💬 Michael Woodhouse: Shorter waiting times. No! How terrible!

The member opposite says that elective surgery waiting times are really important, as is the number of people waiting for hip surgery, and we know that those things improve the quality of life for all of those people. But although those people might wait 1 month less for a hip replacement, they now understand full well the wisdom of investing in primary health care for their grandchildren, and making sure that their sons, daughters, and grandchildren can take their children to the doctor when they need to. They understand the wisdom of that investment, but that is not where the Government has gone.

I have looked through the notes on the bill, and I applaud some of the things that have happened. If we end up, in the area of procurement, with a model like Pharmac, then I will commend the Government. Pharmac is a highly successful model, but I have fears about it. John Key was talking with the Americans about free-trade deals and all the rest of it, and he came back to this country and said the issue of Pharmac and pharmaceuticals might have to be opened up again. He said that, having coming back from the US on one of his earlier trips. I do not know what has caused a change of mind since then, or whether it was due to the collective wisdom of many of the people in his caucus who know that Pharmac is brilliant, but we do not want to muck around with a model that is successful.

💬 Hon Maurice Williamson: Only the visionary person who first set up Pharmac.

Even Maurice Williamson understands that, right wing though he is, and erratic though he is.

💬 Hon Maurice Williamson: Who was the visionary who set up Pharmac?

Mr Williamson understands, and I commend the Minister for understanding, that Pharmac is brilliant. Please do not play around with it. But he knows full well that his Prime Minister—

💬 Hon Lianne Dalziel: They’ve already undermined it with Herceptin.

Well, that is right. There was an intervention, but we will not go there; let us just move on.

The best thing I can see in this bill is the move to national procurement and some centralised purchasing of the core materials and goods that are necessary for all district health boards. That is likely to save us a whole lot of money, and give us some strength when we negotiate with many providers of highly technical things in health, who often have the whip hand. We no longer accept the word of the general practitioner or the specialist. People now go online and find out what is available throughout the world, so we are forced—and there is nothing wrong with it—to try to provide the very best we can for New Zealanders up and down this country in terms of apparatus, equipment, and health care. That is the way it should be. There is a price associated with it, and health is a bottomless pit—we know that. There will be demands, so the question is where we draw the line, and for what reasons. The problem at the moment is that the National Government is drawing the line and making measurements in relation to elective surgery: waiting times for elective surgery, outputs, or throughputs, or what do they call them now? They have probably changed the terms. I get confused myself; I think we might have changed the terminology once or twice ourselves, I have to confess. But the bottom line is that outputs from the health system are measured, and they are now focused on elective surgery. We are trying to measure and improve the overall health of society.

The US is often held up by National as being a wonderful place, with the best of management and systems.

💬 Chris Tremain: When was the last time we did that?

Well, the member opposite probably has not been around long enough to hear some of the speeches in this House about the wonderful management in the US.

💬 Hon Maurice Williamson: Give us one National MP who has held up the United States as wonderful.

Mr Williamson knows—

💬 Hon Maurice Williamson: Give us one example of any National MP who has held up the United States—just one.

Mr Lockwood Smith, the Speaker, has done that. I do not like to speak of the Speaker in his absence, but I know that he has been to the United States and thinks that there are some wonderful examples of management there, right through Government and industry. I am not trying to discredit that view; it may or may not be true. But the US spends almost twice as much as we do on health, and its overall health status is no better than ours.

We should guard jealously our hands-on system of management and consultation with the community, allowing the community to make judgments on important issues for their region in terms of health care. Unfortunately, this bill takes away the obligation to consult with local communities. My community down on the West Coast is totally different from that of South Auckland. I would not like to be making judgments on the priorities for health care in South Auckland, because I do not know what they should be, whereas that community does. This bill takes away from the district health board, which is mandated to care for people in its region and provide all their health care, the obligation to consult the community. I am scared that people sitting on their chuffs here in Wellington under the Minister’s direction will make decisions on what is the best health-care for South Auckland, North Auckland, or Northland. It is not the right way to do it.

So although the consolidation of procurement may be a good thing, consolidation in some areas of health care decision-making is not all good. Although we support the bill in general terms, we do not think the savings the Minister claims will be made will eventuate. We hope that improvements are made, as I say, in the area of procurement, but we will be monitoring this very, very closely to make sure the district health boards are indeed answerable to their communities.

I am pleased to speak to the second reading of the New Zealand Public Health and Disability Amendment Bill. This bill proposes legislative changes that are a result of the earlier ministerial review group report, which I must admit is a landmark document, and congratulations need to go to Murray Horn and his team. They put a huge amount of work into that report. They travelled up and down the country looking at the sector, and interviewing people who worked within the sector, and made over 170 recommendations. It was a comprehensive review and I think it is a landmark document.

The ministerial review group found a number of problems that had a common theme. The problems were that we have an ageing population with more long-term health problems, and greater health care will be required in the future. There were issues with the health workforce, with high dependency on overseas-born and trained staff in a world of growing health workforce shortages. We cannot compete internationally with salaries; we have to compete with the way in which we treat our staff, and what we can offer them in their working conditions. The group found that the hospital services in some areas were quite vulnerable to staff shortages, particularly in some of the smaller district health boards. There were mixed health indicators when compared with other OECD countries, and waiting times and volumes of elective surgery were of concern to the public at large. There were concerns about preventable errors and the quality of care. The group was concerned about the financial viability of the public health system. Despite the billions of dollars that have been poured into it, district health boards were still running at a deficit.

The ministerial review group made a number of recommendations: it wanted to look at new models of patient care—more important, at stronger clinical management—and I am pleased to say that that has become a cornerstone policy. I think that the work done as a result of the report, and that is strongly supported by the Minister, is now translating into efficiencies and a better working environment for clinicians in the public health sector. The group wanted a sharper focus on patient safety and quality of care to ensure better results for patients, and, of course, on identifying services that were really needed and looking at duplication. A change of culture is needed, but a change of culture is something we cannot legislate for. Clinical leadership, as I have said, has been the cornerstone policy, which has translated into new ways of working.

I will make a point here about the six health targets that the Minister of Health has brought in. A previous speaker commented that we are measuring outcomes. Well, yes, it is good to have targets, because it focuses the mind, but also the achievement of those targets does not happen just overnight; it involves clinicians working together to make efficiencies to achieve those targets.

The targets of elective surgery have been phenomenally successful in the last couple of years. In relation to cancer treatment waiting times, not a month or week went by in the last term of Parliament when there was not some blowout in radiotherapy oncology waiting times. Patients were either waiting or being shipped off to Australia, and it was totally unsatisfactory.

Emergency departments are considered to be the barometer or the shop window of a public hospital, and when emergency department waiting times blow out we know something is going wrong in the system somewhere. So the target of 95 percent of patients being processed within 6 hours really has made a big difference. Many district health boards are achieving that target, and we can see that fact in the quarterly league tables published in the national papers. There have been some comments about publishing those types of tables, and that it is not a good thing to do. But in actual fact we heard a comment from Dave Gellar, a clinician in his own right, who advises the Minister of Health. He said that clinicians actually welcomed those tables. They wanted to have benchmarks, and the tables mean that they can compare themselves with colleagues in other district health boards. It can be seen that initially there were patchy performances, with some district health boards doing well on some targets, and others not. But over time the game has been lifted, and that is because the data is being presented in a uniform way.

This bill is not about a major restructure; it is about making things work more efficiently. We have had a system of 21 district health boards doing work in 21 different ways, which is basically reinventing the wheel in 21 different ways. One provision of the bill is to provide shared administrative support and procurement of services across the public health system, including additional powers such as ministerial direction to enhance services, and ministerial ability to require greater system collaboration and the use of shared services. The Minister of Health has already made some changes in the way to improve the health sector.

The Clinical Training Agency was established to help to unify workforce planning. We have a crisis in the workforce. In the last term of Government there were 40 or 50 health work reports, one after the other, all saying that there was a problem, but there was not much happening about it. Well, the Clinical Training Agency, headed by Professor Des Gorman, is making changes, and already those changes are impacting on the health workforce in this country.

This bill is about getting our district health boards working more efficiently and about reducing the number of committees. It is about reducing bureaucracy and about getting better value for money; I make no apology for that. It will ensure greater national and regional cooperation in the sector, and that can only be good for the patients who are at the centre of the health system. Thank you.

Bill read a second time.