HEALTH CARE ANALYSIS vol_ 4:130-145 (1996)

Addressing Restoring Reality

the Minister

Editor's Introduction

Health Care Analysis carries an occasional series in which extracts from speeches and other publications of Health Ministers are examined critically. The writings of politicians are not academic treatises, HCA does not analyse them in this rarefied light, and it is well-known that

politicians do not always mean what they say. However, where politicians purport to make serious statements, they must expect to be taken at their word.

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Extracts from an Address by the Former Minister for Crown Health Enterprises* to the Auckland Divisional Conference of the New Zealand National Party. 25 June 1995 Debunking the Myths and Restoring Reality

Paul East

After reading their morning newspaper two Thursdays ago, a large number of New Zealan- ders---more specifically the 250 000 readers of the NewZealand Herald---could have been excused for thinking they had woken up in another country!

For there on page 19--was a story about our public hospitals and a survey carried out by the

*A Crown Health Enterprise (CHE) is a hospital, or a group of hospitals and other clinical services. ACHE is the equivalent of a UK NI-IS Trust, providing services that are 'purchased" by officially separate Health Authorities.

Consumer magazine. The survey's overall condu- sion, according to the Herald, was:

'Most people are happy with their experience of public health and hold the public health service in high regard'.

Similar levels of satisfaction with the services from our publidy-funded hospitals are reflected in customer satisfaction surveys carried out by each of our 23 Crown Health Enterprises.

By and large, those 500 000 people who are admitted to hospital every year are satisfied with the performance of their public hospitals. Yet the wider New Zealand public are assailed by unsubstantiated claptrap from every con- ceivable interest group suggesting that New Zealand's public health system is falling apart.

That is having an unwarranted impact on public confidence in the system. That's why the Consumer survey found that the proportion of people with some level of medical insurance had risen and that those people gave restructuring of the public health system as one of the main reasons for taking out medical insurance.

The reality of the public health service is reflected by those who have actually used it.

CCC 1065-3058/96/020130-16 ©1996 by John Wiley & Sons, Ltd.

ADDRESSING THE MINISTER 131

The mythology of the public health service is created by those with particular agendas-- political, professional and industrial--and dis- seminated by a largely uncritical media.

I want to debunk ten of the most visible of those myths and replace them with facts. Facts which will allow all New Zealanders to make up their own minds about public health in this country.

Myth One: The Government is Cutting Back on Funding for Public Health

Fact:. For the 1992/93 year, Vote Health--the money allocated to funding the public health sys temwwas $4.06 billion. For the 1994/95 year, it will be $4.9 billion--an increase of around 18%.

Myth Two: Public Hospitals are Doing Less

Fact: Public hospitals are doing more. For each of the past two years, total services provided by public hospitals increased by around 4%.

Myth Three: When They Run Out of Money, Hospitals Stop Doing All Surgery

Fact:. The Regional Health Authorities--the gov- ernment agencies that provide most of the public hospitals' revenue have a contract with the hos- pital (sic) to perform a set number of non-urgent-- or electivc operations in any one year. This helps the RHAs direct the~ funds in the areas of most need. Sometimes, this results in hospitals doing no more of a particular elective procedure when they have fulfilled their contract...

If you need immediate and urgent hospital care at any time of the day or night, it will be there available (sic) to you at a public hospital from a workforce of skilled and dedicated health professionals.

Myth Four: Waiting Lists for all Non-Urgent--or Elective Surgery is Growing Longer Every Day and those Lists would Disappear if only the Government Put More Money into the System

Fact: It is a fundamental precept of economics that resources--whether they be hydro power or health services---are scarce in that demand for those resources always outstrips the ability to provide them, particularly if there are no price signals. So there will always be a demand for particular health servicesMno matter how much money and /o r resources are provided-- and that demand will be reflected in waiting times, or lists. Furthermore, medical advances, instead of reducing those lists, often increases (sic) them. For example, coronary artery sur- gery was once very risky, and once not even available. Now, thanks to increased skills and technology the risks have reduced and this, coupled with the demand generated by an ageing population, means more people want the procedure ...

There are four main reasons why waiting lists are not a useful measure of a hospital's effec- tiveness.

The first is that it's not the length of the list, but the time you have to wait that's important. A big list does not necessarily mean a long wait if the procedure is quick. Similarly, a short list for a complex, high risk procedurc such as trans- plants--does not necessarily mean a short wait for the operation. That's why it is more useful to talk about waiting times ...

Secondly, there are names that shouldn't be on the list in the first place. The Consumer reports that the Central Regional Health Authority has found that the waiting lists in its region could be overstated by up to a third ...

Thirdly, it appears a number of people are waiting for inappropriate treatment. For exam- ple, there is a wide range of intervention rates across the country for a number of elective procedures with no identifiable clinical reason to explain the different levels.

Finally, there are mixed incentives for specia- lists, who work in both the public and private sector, to shorten the public list, because any increase in activity in the public sector dearly will have an impact on their private sector activities.

132 ADDRESSING THE MINISTER

Myth Five: if I'm Old, Sick and Need Expensive Medical or Surgical Care, I Won't Get it Because There's Not Enough Money and Younger People Always Get Treated First

of them and contain sanctions---including dis- missal--if they fail to perform.

Fact: Your age in itself is immaterial, except as an indication to clinicians of risk of complications, the response to the healing process, and the benefits or adverse impacts in terms of the length of your lifespan. Most often, there will be a tick against those points and the treatment will proceed. However, if there is a high risk of complica- tions setting in after treatment, the healing process will be slow and painful, or if it is decided your quality of life won't be improved over a meaningful time span--and clearly the older you are the shorter that time span will be---then the resources that would have been devoted to you will go to someone else.

It's called rationing and it is a fact of life when you are dealing with a finite or scarce resource or service. There will never be enough financial resources or skilled personnel to per- fectly match demand--that 's why choices have to be made. However, the Advisory Committee on Health and Disability Services is looking to establish some sort of priority criteria so these important decisions are made on a reasonably consistent basis throughout New Zealand.

But, at the end of the day, clinicians have an ethical obligation to make decisions--based on clinical priorities---to ensure the most effective use of resources.

Myth Six: Hospital Managers Get Paid Too Much

Fact: The salaries of senior managers in the public health sector reflect the size of the institution they are expected to manage. Generally, these salaries are lower than what those people could expect to earn in the private sector and in the same league as local government salaries which don't draw the same criticism as often.

I ask the question: should these people pay for the privilege of working in the public health sector by accepting lower salaries?

Senior managers don't have jobs for life. They are on contracts which detail what is expected

Myth Seven: The Country's Public Hospitals are in Deep Financial Trouble and if They Don't Pull Out, the Government will Close Them Down

Fact: Many of the country's 125 hospitals within the 23 Crown Health Enterprises are running at a loss and carrying large deficits supported by money borrowed from the crown and/or the private sector. A loss occurs when it costs more than it should to efficiently provide those services, or the hospital provides more services than it is contracted for.

The government has a number of choices in front of it to deal with those Crown Health Enterprises. It can help them manage their resources better, it can provide them with finance, the RHAs can sometimes increase the CHE's revenue, or the government can dismiss the CHE Board. The government is not about to physically shut down Crown Health Enterprises because they are not financially viable. Finally, it should be noted that this government is addressing the problems arising from decades of disinvestment in the country's public hospitals.

Myth Eight: Every Time Something Goes Wrong in a Hospital it's the Fault of the Health Reforms

Fact." This is nonsense. Like everybody, doctors and nurses and hospital managers sometimes make mistakes--the wrong diagnosis, inap- propriate treatment and discharge, mixing up medical records. But on any one day when something goes wrong, there are around 2,100 instances where everything goes right, because that's how many people get admitted to our hospitals every day. Mistakes have happened in the past, happen now and they will happen in the future, that's regardless of what the structure is. The challenge for doctors and nurses is to work together to make sure there are as few of these incidents as possible ...

ADDRESSING THE MINISTER 133

Myth Nine: The Public Health System is Only About Money. It's Not About People

Fact:. If the public health system was only about money, the government would have wasted little time in privatising it. The fact is this government has made a significant investment to improve and restructure the system--often in the face of hostile agendas from sector interest groups--in order to improve service delivery to meet the needs of future generations.

Myth Ten: The Public Health Sector is all About Public Hospitals

Face The government spends around $2.3 billion in providing care for people in public hospitals. That's just over 50% of Vote Health. The other 50% goes on the following activities in the area of what we call primary and community care: GP services, laboratory tests, pharmaceuticals, rest home care and so on ...

I'd ask Crown Health Enterprises to plan for smaller hospitals and more community-based services. The "bricks and mortar' should match the services; not the services being determined by the size of the "bricks and mortar'! I'd ask them not to exploit their community constitu- ency by using public pressure in their efforts to use increased revenue for an increased amount of hospital-based services from the Regional Health Authorities in order to balance their books. I'd rather they focused on a reconfigura- tion of services and other efficiencies to ensure they are not losing money, using every taxpayer dollar to the maximum benefit of their patients.

To those who ask why public hospitals should be expected to operate in a businesslike fashion, I say why not? We expect every state agency, regardless of the goods or services it provides, to be well-managed and accountable for the prudent use of all its resources. Publicly owned hospitals are no exception.

I would ask Regional Health Authorities to take a more active role in making sure the public understands that they are responsible for the

purchase of publicly-funded health and disability services in their regions.

It is the Regional Health Authority that makes the decisions on the level of health services to be purchased for a community.

I would ask that their purchasing strategy reflects the trend away from hospital to community care; and that a wide range of providers will be (sic) contracted to provide those services.

I would ask of myself and my cabinet colleagues to resist the temptation to meddle. Considering the political sensitivity of health, it's a hard temptation to resist. But the restructuring was based on the premise that history has shown that politicians--be they local or national--don't make the best health decisions on their own. We need to let the sector get on with it.

I would ask the public to separate the ability of the publidy-funded health and disability sector to deliver quality services from the "noise" surrounding the debate about the new structures. I would remind the public that we have one of the best public health systems in the wor ld- - delivering quality services at a reasonable cost. The facts are there for all to see:

• At 75.8 years, our life expectancy is among the highest in the world;

• At 7.1 infant deaths per thousand live births, infant mortality rates are among the lowest in the world;

• Ministry of Health surveys report 90% of New Zealanders believe their health is 'good' or 'excellent'; and

• At 7.6% of GDP, our spending on health is comparable with countries like the UK, Swe- den and Denmark ...

Finally, those opposed to this government's bold measures to design a health service for the 21st century also have a role.

By all means debate the issues with vigour, but don't undermine the public's confidence in the sector's ability to help them whey they are in need.

Paul East Minister for Crown Health Enterprises, New Zealand