March 28, 2025 • 41 mins
Health care in New Zealand eats up a huge portion of the budget each year, and it's growing - The Government spent 7.3% of GDP on health in the year to June 2024, more than any year outside of Covid.
Treasury reckons spending is expected to grow to 10% of GDP by 2061 - so how can we get on top of it?
This week, Thomas is joined by Sir Bill English, who served as Health, Finance and Prime Minister during his time in Parliament, for a long-form discussion on what's needed to fix our health system and get spending under control.
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Episode Transcript
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Speaker 1 (00:05):
Hello, and welcome to on the tiles. I am your host,
Thomas Coglan, the Deputy Political Edditer of The Herald. The
health system is in a bit of a state. The
government spent seven point three percent of GDP on health
in the year to June twenty twenty four. It's more
than any year in history bar one, which was twenty
twenty two when temporary COVID measures pushed us to seven
point six percent. When the last National government left office,
(00:27):
health spending was five point nine percent of GDP. That
was roughly where it was when it took office, which
was six percent of GDP. Treasury and twenty twenty one
and it's long term insights briefing reckoned health spending would
grow to ten percent of GDP by twenty sixty one.
Last year, the nominal figure that was twenty nine point
nine nine billion dollars. That includes things like acc So
what is it buy well Health? New Zealand employees about
(00:49):
one point five percent of all New Zealanders, that's all
of us, from infants to superinnuitance, and about one in
every thirty five New Zealanders who have a job we're
looking for a job are employed by Health New Zealand.
Despite union reports of a hiring freeze, a public service
data out this week showed that Health New Zealand actually
added three four hundred net staff since June twenty twenty three,
(01:11):
and that figure was current as of December twenty twenty four.
So that means that for every net job loss in
the core public service as a result of the fiscal
spending restraint of the last year, one point twenty five
roles were added at Health New Zealand, which is the
frontline health agency. The wider health sector, including the funded
sector that's providers are private providers of people who do
(01:32):
publicly funded work, set at eighty five nine hundred and
June twenty twenty, but by June twenty twenty four it
was at one hundred and three thousand, three hundred. That
means a net increase of eighteen thousand, six hundred people
in just four years. The health sector has added roughly
the workforce roughly the size of the population of Timidoo
(01:52):
since the last National government left office, that's thirty thousand people. Now,
very little of this seems to be making a massive difference,
or a difference for portional to the amount of money
that we spend, the number of people that we hire.
From June twenty twenty three to May twenty twenty four,
the number of patients waiting longer than four months of
treatment range from twenty seven thousand to thirty three thousand.
The Auditor General is now looking into wait times. Now,
(02:13):
all of this is a very long way of introducing
my next guest. How do you make sense of health?
How do you make sense of the economics of it?
How do you make sense of the funding of it?
He's wore many different hats. He was Parliamentary Undersecretary for
Health from ninety three to ninety six. He was Health
Minister from ninety six to ninety nine. He held the
Finance portfolio in nineteen ninety nine and then again from
twenty eight to twenty sixteen and twenty sixteen he gave
(02:34):
up gave that job up to get the top job,
Prime Minister of New Zealand, which means my guest is,
of course none other than former Prime Minister Bill English. Bill,
thank you very much for joining.
Speaker 2 (02:43):
Us, Good morning, Thomas, and congratulations on looking into all
those numbers.
Speaker 1 (02:47):
Yeah, sorry for the Sorry for the very long rambling introduction. Look,
can I just start by asking the most basic of questions,
does the health system need more money? Is the problem
the aging population and the funding not matching what we
need to handle it.
Speaker 2 (03:02):
The health system gets more money every year in a
growing proportion of government spending, so it grows at about
five or six percent per annum. The odd burst six
or seven percent talks about discussion about health cuts quite misleading.
The money goes up every year, that's not the issue.
I mean, of course we could decide to spend more
(03:23):
on it, but as you've pointed out, it's getting more,
but it's processing less, it's providing less, not providing health
services consistent with that, As you've pointed out, staff have
grown quite rapidly. I think from twenty seventeen to twenty
to about twenty twenty three, the health the nominal health
(03:46):
budget went up sixty percent, six to oh and any
politician promising that would have been praised, I think for
solving every health problem we've got so no more money
at the margins not It's part of an answer in
any particular circumstance, but it's not the key issue. The
key issue really is for New Zealand now is how
(04:09):
to extract itself from what's been one of the worst
public sector reforms done that I can remember. The health
policy world became dominated by this sort of idealizing of
an NHS type system, let's have just one big one.
(04:31):
It's precisely the wrong answer to the solution to the
problems they diagnosed, and those problems are much more to
do with what's driving demand for health services, so the focus.
So I've got to undo what was a disastrous reform.
(04:52):
It's turned out to have reduced productivity significantly. Even now,
it's still hard to find a decider in the health system.
So if you've got if you're a clinician with a
better idea, if you're someone in the community who wants
to help with dealing with homelessness that's feeding people into
the health system, you can't find someone to decide. So
(05:14):
that's just one of a number of issues that can
be improved quite significantly.
Speaker 1 (05:19):
One of the you know, just on if someone came
down from Mars, you know, when we still have the
DHB system and said, look, I think one of the
ways of getting more bang for your buck would be
to abolish dhb's. You have a lot of duplication. There
are twenty of them. That's a lot of executives, a
lot of back office. You abolish the duplicator, you get
rid of the duplication, you direct that money to the
front line. That means are more efficient. You can see
(05:43):
how the economic argument for the health reforms sort of
stacks up on that basis. So what has been lost?
I mean, first of all, I guess do you agree
with that kind of just very simple economic argument that
abolishing dhp's and centralizing leads to less duplication and more
efficiency in that regard? And then what has happened from
(06:03):
that basic economic argument to get to the system that
we have now where used there isult I mean, there's
a large degree of agreement with what you're saying, which
is that the system has gone from being kind of
balkanized and difficult to kind of grasp to being centralized
in one great organization. But that is actually no easier
(06:23):
to get to the bottom of which decision makers make
which decisions. Who I need to talk to?
Speaker 2 (06:30):
Look, I think the answer to your question is that
you can mistake complexity for an efficiency, and someone coming
from Mars would probably not diagnose it in that way.
I mean, the opportunities for improvement and health are generally
about better information flows, incentives, and clearer accountability. And I'll
(06:56):
just give you one little example, because it's a project
of Became was aware of providers of homeless, providers of
getting social providers getting people who are homeless into houses.
Were able to show that it reduced the bed nights
(07:16):
that a homeless person with mental illness was spending either
in a mental health unit or hospital from one hundred
average of one hundred and thirty a year to ten
across a group of about of one hundred people. Now,
that's this whole story about the data flows and information sharing,
which was incredibly difficult because health is a very controlling
(07:38):
system at the moment, they don't want to share data
with anybody. But the real issue was that having seen
the clarity of that solution, there was no one in
a position to decide to follow through to implement any
changes in the system. So you think there's an obvious
(07:59):
little problem replicated around the country, small group of people,
and there's a lot of these small groups, small groups
of people who taken who need an an ordinate amount
of service, disproportionate amount of service, but sensible interventions can
reduce that pressure on the health system, but more importantly
give them a better quality of life. There's no one
(08:20):
in a position, no one has a good reason to
make that sensible decision. Now, there's a lot of sensible
decisions get made in the health system every day. Actually,
tens of thousands of people are getting treatment. But if
you want to improve it at the margin, to deal
with the pressures on the funding that you've talked about,
then it needs to reorientate away from centralized control to
(08:43):
localized problem solving.
Speaker 1 (08:45):
So you're you're a community housing provider or someone in
the funded sector, and you use the health data that
you do have access to say well, look this is
our cost benefit analysis. You write a paper, you prove that,
But then you think who do I talk to? You
can't really talk to the minister because you know, the
minister has got a pretty booked diary. And let's use
(09:06):
the Timaru example again and the farmer housing provider and Timaru.
That's going to be pretty difficult to get a conversation
with the minister. Do I talk to you know, Health
HQ and Wellington? Do I talk to the Southern you know?
Is that the issue that is not there that they're
so centralized there's no way to get into the system.
Speaker 2 (09:25):
Well, in that case, people even people in the health system,
didn't know didn't know who they should talk to. And
this isn't a system which for twenty five years has
said its primary care lead. And so you do wonder
what are all the thousands of extra staff actually involved with.
While some of it's dealing with growing demand of an
(09:46):
aging population, but you've had in recent years a lot
of focus on talking and a lot less on doing,
a lot of focus on form and structure, and not
much focus on results and outcomes shifting gradually and it's
a bit painful for the health system, particularly when the
leadership of it has yet to settle down. But you know,
(10:09):
we do a bit of work on the on the
periphery of the health system, and there's the toolkit around
now to do a better job of dealing with that.
The demand that gives the system a sense that it's overwhelmed.
And if you go to an need, they'll say they're overwhelmed.
You talk to GPS, they'll say they're overwhelmed. Actually, a
(10:31):
lot of that demands predictable if you go and look
to the chronic users like the homelessness group we talked about,
and there are others people with serious diabetes, older people
who are in that sort of difficult period between hospitals
and rest homes. The solutions for that At the moment,
there's no demand in the system for those solutions. Everyone's
(10:51):
just saying, oh, it's overwhelming.
Speaker 1 (10:53):
So it's a way of finding alternative care models for
high users and finding some way of I mean, it's
a bit of a cliche, but everyone says the worst
thing that happened when the health system fails, it's when
someone ends up in hospital. You know that you want
to do everything. Obviously, every day people need to go
to hospital for a number of reasons, and that will
never be well, that will never change. But when the
(11:15):
health system is at its worst, it is when people
who don't need to be in hospital end up in hospital.
That's the most expensive thing, probably with the most expensive
public service that we provide.
Speaker 2 (11:24):
That's right, And I think there's two there's two kind
of concrete steps I think can be taken. One is
they have to set, in my view just the personal opinion,
they should separate out the core funding function from the
operation of the hospitals. The fact is that the hospitals
get more of the money than everyone else. Health New
(11:47):
Zealand's primary obligation, whether they articulate it this way, is
to their eighty thousand employees. And that's the recent track record.
So if the people who run the hospital have control
of the whole budget, the hospitals will always be their priority,
and that's been borne out by track records. So they
(12:08):
should separate out that funder from the hospitals and create
some tension between the funders and the hospitals, because what
happens now as the hospitals get the line's share of
the money, they just turn up every year and so
we've got cost pressures and the people are talking to
are their owners, not some separate funder. And I think
the other thing is primary care has kind of lost
(12:28):
its way. I think GPS. I'm married to a GP.
They do a great job, they're working hard, but the
understanding over twenty five years of primary care lead with
the phos it hasn't moved that far. Do Some good
stuff happens, but the incentives in there are not strong
(12:49):
to achieve the things they want to they say they
want to do, and this is one of the fascinating
things about health. At the moment, everyone knows what to do,
they've just forgotten how to do it right.
Speaker 1 (13:01):
So I'm glad you mentioned primary care because that's where
I wanted to move too. So I think the current
primary care funding model is about twenty to thirty years old.
You might have actually been involved with the sort of
transition period to it. I haven't actually gone that deep
into the archives, but there's a capitation capitation model is
the main funding model. What that means is gps get
(13:21):
a subsidy from the government from real free patient they
have on their books. They get more or less money
depending on the person's sex if the male female, and
the certain age and depending on their age. So if
you're at at the older end of the spectrum, you
get your GP gets a larger subsidy because you're likely
to see them a bit more. And then if you
(13:44):
use the GP more ten times a year, then you
get an additional the GP gets an additional payment. Basically,
the GP is subsidized to see you. Simeon Brown announced
some extra money for GPS a couple of weeks ago,
maybe even a month ago now. He said that he
was looking to looking to see what could be done
about the primary care funding model. It does seem like
(14:06):
it's on the government's radar. Everyone does talk about it.
Where do you think, I mean, you say, we know
what we need to do? What do we need to do?
What should we think?
Speaker 2 (14:14):
I think this really about three things in primary care.
One is just GP supply. There's too much workforce planning,
bureaucratic pretend manipulation about training. Another twenty thirty GPS. Look,
that's a useful thing to do, but what's worked has
(14:35):
been increasing is just supply and demand. When they increase
nurses pay back. In twenty twenty three there was something
like nine thousand nurses reregistered thet they were out there.
There's no nursing shortage now. In fact, right now you're
seeing one of the announcements from the minister, there's four
and a half thousand graduate nurses with who they are
(14:56):
trying to subsidize into primary care because the hospitals are
and can't take more nurses, just suddenly more than is needed.
And the same happened with specialists. They got significant and
so in GP and this GP's turn, they are on
relative compared to professional incomes are relatively lowly paid. If
you want more of them quickly, there's a simple, well
(15:19):
tried way to do it that has increased the increase
the income one way or another. However, the funding work.
I think that with the capitation formula, it's fundamentally not
it's fundamentally a reasonable system. Right, we've got a reasonable
mixed system, but you have got you're going to remember
who who does the patient connect with? Well, they connect
(15:40):
with their medical practice. It's not just the GP, it's
the nurses and other allied health there. But if you
think of it as the medical practice, which is you
know where the GPS the main service, that's where the
decision should be made about what happens. And at the
moment you've got a lot of primary care money goes
through phos and other other ways. They do some useful stuff,
but the incentive should be on the medical practice to
(16:04):
manage the patient. So a lot of that money you
should come through the medical practice instead of And at
the moment you've got essentially bureaucracies either in Wellington Head
office or the PHOS trying to design primary care at
a time when there's so much opportunity for renovation, you've
got telehealth coming, you've got AI coming people. A lot
(16:26):
of people still want the face to face. So what
you're going to how it's going to evolve is is
a nuanced mix of AI support, telehealth service, sometimes face
to face. Sometimes. The bureaucracy is in no position to
design primary care, and they've been trying to do that
(16:48):
for the last ten years without making much progress. So
those are a couple of things I think that could
help with primary care. Put all the money through the
medical practices, and if they need the PAH show services,
they'll pay for them and allow.
Speaker 1 (17:03):
The actually change the change the just change.
Speaker 2 (17:06):
How it's routed, and you'll get you'll certainly get more
value out of that because the practices are closer to
the patient.
Speaker 1 (17:11):
And I suppose the practices would would determine whether they
see that they're getting value out of the PHOS rather
than the PHO. They value themselves.
Speaker 2 (17:20):
And give them room for innovation, and I think the
bureaucracy pulled back from trying to plan all this with Look,
they can have nice ideas, but as someone said to
me at a conference here that couple of months ago,
we've been going They said, Look, we've been going to
these collaboration meetings for around primary health care and social
determinants of health. You know, the housing people are there,
(17:42):
the police are there, the youth workers are there. They said,
after three or four years, nothing's really happened, but we
all get on well. And that's been a feature of
the health system. There's a whole lot of talking with
each other and getting on well, and not enough clarity
about what each bit of it's meant to be achieving is.
Speaker 1 (18:00):
We do seem to be I think all businesses, all
all organizations are in the era of the conference. We
seem to be in a sort of.
Speaker 2 (18:07):
It's too much talking and not enough doing and and
too much restating the problem. I mean, how many more
times are you going to hear the facts that Maori
and Pacific do worse. Well, we've known that for a
long time. What we need to hear more about is
what they're doing about practical on the ground solutions.
Speaker 1 (18:27):
How do you feel about funding extra places at in
terms on the supply side? So I think it's you know,
it's a demand side solution. I suppose no, I suppose
to supply a supply as well if you pay them
more on as well. On the supply side, funding more
places at med schools, and then and talking with the
(18:48):
professional colleges, the Medical Council about how difficult it is
for some people to register to practice in New Zealand.
Speaker 2 (18:55):
Look, there's star are all part of an answer, but
if you want supply now, increase their incomes. It worked
with the nurses, it worked with the salary specialists, and
it will work with the gps because you've just got
a lot of them who have essentially retired from the field.
(19:15):
They're just saying, well, it's not worth my time working
another day, or I'm going to retire a bit earlier
because it's not worth the time and the effort, because
the pressure on them these days is pretty intense. Those
other solutions will take a long time and produce relatively small.
Speaker 1 (19:30):
Numbers, some incredible number of gps. I think of a
frightening number of planning to retire in the next ten years,
and I think that everyone who's sort of thinking about ways,
I'm ensuring they don't. As part of the problem of Australia.
(19:51):
Anyone who can work in New Zealand's more or less
can go to Australia. Australia is a richer economy. They
are a more successful economy. Australia can pay Australian prices
for obviously for health services for health professionals, but it
can do that because the Australian health system has access
to Australian revenues, mineral wealth, or good Australian stuff New Zealand.
(20:13):
Simm Brow mentioned in the press conference the other day
that we're trying to achieve parity in some areas of
a health system with the Australian system, But of course
that means that New Zealand doesn't have access to Australian
style government revenues. We're not an economy of the scale
that they are. We're not per capital as wealthy as
they are, so we're paying Australian prices on New Zealand incomes.
(20:35):
That's a huge problem.
Speaker 2 (20:36):
Well look, it's a challenge, but it's not a new one.
It's been there for a long time. And guess what's
going to be there for the next hundred years. These
are people in health motivated as much by professional fulfillment
as they are by the wages. Because if you really
thought the Australian story was very strong to be no
health professionals here that will be there, Well, they're not.
They're here servicing their own community, their own people, getting
(21:00):
your own sense of fulfillment. What they what will help
keep them here is a system where they're clinical roles respected,
but where they feel like they'll put up with an
awful lot if they feel like problems look like they
can get solved. That actually the big crowd and the
eed is gradually diminishing because someone's figured out what to
(21:23):
do about the bed blockers in the hospital, or where
there is actually a live, live project out in the
community reducing the incidents of rheumatic fever. You know, when
health professionals see those sorts of things actually happening, they'll
stick around. But if all they see is a kind
of blah blah strategy equity everything is a public health
(21:44):
crisis kind of rhetoric, well why would you stick around
for that if you want to do things right.
Speaker 1 (21:49):
So it's a culture that you think it's a culture
as much as income and then comes obviously part of it,
but it's culture as well.
Speaker 2 (21:55):
Yeah, I think the two go together. If you get
the culture more solue focused, less talkie, and you get
the incomes up for the groups who've lagged behind. Then
I think you'll get more stickiness in the workforce.
Speaker 1 (22:13):
The economists ran The Economists magazine ran a really good
piece on the healthcare in the English speaking countries recently.
Australia did very well. Australia is a very They always
seem to do well in these sorts of things. So
and one of the things the economists pointed to is
the relatively high uptake of health insurance private health insurance.
(22:35):
Now figures these are not from the story, but I
dug them up today. As of twenty twenty three, the
Financial Services Council thinks that about one point four to
five million New Zealanders have private health insurance, about thirty
seven percent of US at that time, and the comparable
figure for Australia for twenty twenty four was fourteen point
(22:58):
eight million ausies or fifty four zero point five percent
of the population, and then forty five percent have a
slightly lower level just had hospital cover. Do you think
one of the things we could look at, I mean
that they health economists say that the benefit that health
insurance gives is that it's a pricing mechanism. It prices
your risk and encourages you to do arious things. Obviously
(23:18):
there's a pre existing condition issue, but what I mean
do you think that that is part of the story too.
Speaker 2 (23:24):
Look, one of these stale arguments, very stale arguments in
New Zealanders around privatization. It's like funding cuts. There's no
funding cuts and health it goes up every year and
there's a kind of political part. Is the ideological thing
that you know, seend the right governments cut health funding.
That's not happened. It goes up. And the other is privatization.
(23:46):
The systems in the world that work are mixed, and
you get these outbursts. We're having one a bit now
over elective surgery. It's going to undermine the public system.
The fact is the public system doesn't need all the needs.
You need a mixed system, mixed insurance coverage, public and private,
and mixed provision. Unfortunately, in more recent years the policy
(24:11):
Ministry of Health two have been actively hostile to private participation. Now,
the most interesting innovation in health in the last ten
years in New Zealand is the nati far to a
nib essentially health insurance scheme in Auckland covering the NATI
far to a population. As far as i'm aware there's
(24:33):
no official attention to it, probably because it involves an
insurance company, but actually the work they've done, have done
and are doing there for some of the most needy
people in the country is just fantastic and the results
are impressive, and there should be a trail of officials
(24:55):
and politicians going to have a look at that because
it works and it was no initiative of government at all,
but it is sort of public private EU operates with
public funding and so on. So I think we've got
to get in New Zealand, we've got to get past
this silly argument about privatization. Focus on results and if
(25:19):
you can get better results with a combination of public
and private insurance coverage, why not. That's what they do
right across Europe. It's what happens in Singapore, it's what
happens in Australia. That's not some extremist right wing view.
And here there has been hostility to private provision. I've
never understood why it matters more who does the job
(25:43):
than achieving something for someone with significant health need and
then getting the results for the person is what matters.
And let's get a bit pragmatic and results focused about
who does it?
Speaker 1 (25:55):
And so just to pick up on that, you felt
that the bureaucracy not it wasn't just a sort of
less right political thing playing out in parliament, It was
a bureaucratic problem as well. That the bureaucracy is really
hostile to that.
Speaker 2 (26:07):
Yes, that's right, and some of them are quite open about.
I mean the PHO is quite open about being opposed
to corporate ownership of medical practices. Well, actually it's none
of their business who are the practices. What matters is
can a sixteen year old a sixteen year old girl
with depression and other physical problems get the treatment and
(26:30):
support that she needs when you know they struggle to
afford the transport public transport costs to get to the
GP clinic. You know, those are the kind of problems
that we should be focused on.
Speaker 1 (26:43):
And in terms of so what I mean, so the
uptake of public of private health insurance, private health cover,
I mean tax can you can look at tax concessions
or I mean perhaps a fringe benefit tax for employees.
Speaker 2 (26:54):
You know, Look, I have been through that argument many times.
I'm not a fan of tax concessions for it because
it so regressive. I mean, it's higher and come people
get the benefits of it. You know, you you were
the people who can who will they know how to
get the best out of the service, and they actually
still use the public service fairly extensively. So no, not
(27:16):
a supporter of tax concessions. And I don't think there
is any broader political support for it.
Speaker 1 (27:21):
And what was so, how would you encourage it? Then?
Speaker 2 (27:25):
Oh? Well, I think the private insurers have to encourage
it by doing a good job, you know, offering better
coverage at lower prices. That's how they'll attract people into it.
But I think the the the the right response of
the public system is to work with those who do
that and when and when when you when you get
(27:46):
the blend right, it works well. So one of the
projects I was involved in was down in the far
down and down south getting the small hospitals out of
public ownership. And most of them are south of Tamaru
and they're in community ownership or community owned companies. And
(28:09):
since they moved out of public ownership, there's been no
five thousand person health marches like they used to be
in the early nineties. And they are a great mix
of private non government ownership. They get the public funding
for the public services into those into their hospitals, and
they are great examples of fully integrated care in a
(28:33):
community of a type which academically the policy people want
to see. But to get it you need that public
private mix, public coverage, private ownership, and the community supports
the service. So this goes back to the point I
said before. We actually a lot of the solutions are known,
a lot of them have been in place before. We've
(28:57):
just forgotten how to do it because there's too much
talk about how what what I've seen branded is everything
is you know, everything is public health crisis, everything is
everything is mental health. Well that's that's, you know, sometimes
a useful discussion. But if that's all you're doing, you're
(29:17):
not actually solving problems.
Speaker 1 (29:18):
Do you think they sort of we should be more
specific and what we and what the problems are. So, yeah,
this specific problem, how do we solve it?
Speaker 2 (29:26):
Look, the policy system should be banned from producing the
five hundred and thirty sixth Analysis of the aging population
and its effect on health budgets. It should be required
once a month to produce a solution to one more
(29:48):
smallish problem that's actually solvable. Now. I think that would
sort out who's capable of solving problems and who just
keeps writing more strategies and action plans and needs analysis,
which is another one. Needs analysis is dead cheap, easy
with modern data and technology. So a lot of what
the policy function is carrying out these days is actually
(30:11):
a significant distraction from getting value for money and health.
Speaker 1 (30:15):
It's lay two blue skies and not enough to benefit analysis.
Speaker 2 (30:20):
It's not even blue skies. It's just the same old
gray skies of complaining about how hard it is. Well,
you know, it might be hard for you as policy analysis,
the damn sight harder for people aren't getting the service
they deserve. Get up on Tuesday morning and feel pretty sick,
like you know, and have to wait for eighteen months
to get their hip pain dealt with. So you know,
(30:42):
I've got really allergic to this, the kind of psycho
health crisis babble which solves nothing. Go and solve a
real problem.
Speaker 1 (30:53):
They do. I mean, I use the OAA a lot
to get papers out, and you do. You do have
to say that there is a the ratio of very
broad kind of papers about large problem yea, the agent
population for example, massive problems. There are a lot of
the relative to the papers about very specific targeted sort
(31:16):
of this is an issue that is coming up. Here's
how you might solve it. It seems to be.
Speaker 2 (31:24):
Or another layer there, which is how do we arrange
funding so that someone has a good reason to resolve
that issue. I talked about earlier on chronic of homeless
homeless guys with mental illness who are taking a lot
of hospital beds right now. There's there's a whole lot
(31:47):
of socioeconomic explanations for why they are how they are,
and you can go off to a conference and feel
good about that, but that is actually a real there's
real suffering there. There's real things going on right now
now as it happens. He's just often the problem solving
these problems often about information flows. So in that case,
(32:08):
it actually took nine months to get the hospitalization data
with the consent of the individuals. It took nine months
to get it out of the health system because are
such a closed, controlling entity, and that behavior completely contradicts
the endless analysis where they where people say we want
to deal with the social determinants of health. Well, the
(32:32):
entities who do deal with it, housing providers, people who
help people find jobs, dealing with youth mental health. The
health system usually won't share any information with them to
help them solve the problem that the health system has
(32:52):
that is overwhelming demand and that the individuals have.
Speaker 1 (32:57):
Who deserve support, and this is a privacy they site.
But the data should be anonymous, didn't it.
Speaker 2 (33:02):
Well, there's plenty of ways these days of using synthetic
data and nominized anonymized data, sort of random non identified data.
There's no will. The will at the core of the
health system is still of the public health opera. Not
I'm not talking about the clinicians here, but the public
health administration is control of information.
Speaker 1 (33:24):
And this is this is an example that you had
when you were minister, or is it one that's st
been aware of more recently?
Speaker 2 (33:29):
We have a we run a business that measures social impact,
so we get to see the interactions with the health
system and information flows is one of the one of
the key problems, and it comes down to some very
boring technical issues which if resolve, would allow a whole
lot of goodwilled people to to follow their own common
(33:51):
sense to resolve issues that we all believe can be improved.
Speaker 1 (33:56):
Just just finally, it's some it's March. The moment, it's
a budget by lateral season. I know that Finance Minister
Nicola Willis is having budget by laterals. I think last
week she had some, she had some this week. If
you were in the chair your you know, go back
to when you were Finance minister Tony Ryle comes at
(34:18):
you with a health budget bid. What questions are you asking?
What do you want to see from that budget bid?
Speaker 2 (34:23):
To get it out of the line, Well, I think
the key thing is not to spend too much time
nickel and diming for the last fifty million. Health has
the extraordinary privilege that they get first call on apart
from the automatic ones like National super and Benefits, first
call on the government's discretionary funding and they get well
(34:45):
over half of it now every year. The key questions
are what are you doing to increase the transparency and
accountability in the system and what are you doing to
solve the odd problems that represent future challenges for government.
Now you can't stop a population aging, but you can
(35:06):
deal with You can deal with homelessness, you can manage
chronic disease is better and if you think about it
as the finance minister, you know the poll of people
who have diabetes represent a significant opportunity to reduce future cost,
but more importantly, a significant opportunity to improve their lifestyle
(35:31):
the quality of life if we can reorganize ourselves, because
often the problem here is you know, you could say
to the diabetic, we've got to change your diet. Well,
some of them will, some of them won't, but often
the easiest lever for changes is the policymakers and bureaucrats
changing their behavior. So given that, say you take diabetes
an example where it's intensive as very well understood. The
(35:56):
treatments and support that's needed is very well understood academic
literature and clinical experience, but no one's in charge of
doing it. And despite twenty five years of PHO lead
primary care, they haven't got much better at it either.
And even where people say they have, they haven't got
systems for showing the making progress. Because as a finance minister,
(36:20):
you might say, look, if you're able to reduce the
incidence of this phenomenon, whatever it is, with diabetes by
ten percent, I'm willing to pay for that. But if
you can't show me, I'm not willing to pay. And
that's what I found most challenging as finance minister the
system that the publicly delivered services usually can't show you
(36:43):
whether they're making progress. But at the same time they
impose fairly significant requirements on non government delivery to be
able to show that they can change the world or
they won't get any money. So I would say to
the Finance minister, you must lift the standard of evidence
quiet for the assertions, and you must they must be
(37:04):
able to show you. There's a feedback loop where if
they said this program is going to this program is
going to fix all the problems with diabetes auromatic fever,
well come back in twelve months time and show us
whether it did or it didn't. That last but is
almost always missing. But it's powerful if you can get
(37:27):
it in place.
Speaker 1 (37:28):
And so that's the tafutawara. The hospitals, the tertiary level
stuff massive demands on the public purse, but you're not
you aren't necessarily seeing what you're getting for it. Whereas
if you have community organizations the funded sector, they say, well,
look we might be able to offer you this. The
demand to prove that they can offer you that is
so great that they're not getting a looking at the
(37:51):
money whereas if the same standard were applied to the
hospital system, to the tertiary level system, you'd get a
very different outcome.
Speaker 2 (37:58):
Well, remember a scrap of years ago, a bit of
out a date on this, this guy called Dave Latally in
South Auckland who does fantastic work with obese people, a
great motivator, saves lives and there's a great what's a
video on on social media where he's using a chainsaw
(38:19):
to demolish a wall because the guy who was in
there was too big to get through the door, and
the Tafida Aura decided to set up an obesity clinic
essentially competing with what he was doing. Instead of him
getting the funding, now he may have got some since
because Dave's a great communicator and very persuasive. Yes, but
(38:41):
that's a and could show results, like you could see
what was actually happening. Now the clinics at the uppatient
clinics at the hospital would not be subject to the
kind of demands that were made on him. And actually,
so you want a funder who's sitting there going okay.
So obesity at scale is an ongoing problem for us
(39:04):
as well as for those patients. Let's find who can
deal with it best. What you actually have is if
at the moment as the funding goes through the hospital,
because that's the top priority, and they'll set up an expensive,
expensive clinic which may or may not whose effectiveness may
or may not be measured.
Speaker 1 (39:24):
Just just the last question, what do you think of
the new multi year funding funding system for health. It's
now funded on a cross pressure multi year basis. Actually,
Bloomfield said ten years. That's a very long period of time.
The current plan is for three years. What do you
think of that system?
Speaker 2 (39:39):
Look, I don't think that makes a lot of difference.
You know, it's going to go up five or six
percent compound per year, and it might be a bit more.
So let's just say for the next ten years that's
going to happen. And that is the truth of it.
It doesn't matter what the partisan claims are. It'll either
go up five or six or a bit more seven
or eight. The real issue is how how are we
(40:00):
using the money? So let's stop wasting time on that
rhetorical scrap and look at the productivity of the system.
And you know, he has a very basic set of numbers.
You've quoted big increase in health professionals through the throughput
of the system. In patient and outpatient discharges and GP
(40:23):
visits hasn't changed much over that time, but there's something
like twenty percent more doctors and nurses now. They're not
all sitting around lazing being lazy. But it is a
legitimate question to say, okay, we should be getting more
value for those inputs. That's where the debates should be,
rather than this time wasted on a funding track every
(40:45):
finance minister knows is going to go up pretty much
the same every year for the next ten years.
Speaker 1 (40:51):
Ran well, Billinglish, Thank you very much. That was there
was fascinating stuff. I really really really appreciate your time
and insights into into the state of the health system.
Speaker 2 (41:01):
Thanks for joining us our problem, Thomas Sinky.
Speaker 1 (41:03):
That was on the tiles for another week. You can
find us on iHeartRadio or Worrithervi your podcast
Hello, and welcome to on the tiles. I am your host,
Thomas Coglan, the Deputy Political Edditer of The Herald. The
health system is in a bit of a state. The
government spent seven point three percent of GDP on health
in the year to June twenty twenty four. It's more
than any year in history bar one, which was twenty
twenty two when temporary COVID measures pushed us to seven
point six percent. When the last National government left office,
(00:27):
health spending was five point nine percent of GDP. That
was roughly where it was when it took office, which
was six percent of GDP. Treasury and twenty twenty one
and it's long term insights briefing reckoned health spending would
grow to ten percent of GDP by twenty sixty one.
Last year, the nominal figure that was twenty nine point
nine nine billion dollars. That includes things like acc So
what is it buy well Health? New Zealand employees about
(00:49):
one point five percent of all New Zealanders, that's all
of us, from infants to superinnuitance, and about one in
every thirty five New Zealanders who have a job we're
looking for a job are employed by Health New Zealand.
Despite union reports of a hiring freeze, a public service
data out this week showed that Health New Zealand actually
added three four hundred net staff since June twenty twenty three,
(01:11):
and that figure was current as of December twenty twenty four.
So that means that for every net job loss in
the core public service as a result of the fiscal
spending restraint of the last year, one point twenty five
roles were added at Health New Zealand, which is the
frontline health agency. The wider health sector, including the funded
sector that's providers are private providers of people who do
(01:32):
publicly funded work, set at eighty five nine hundred and
June twenty twenty, but by June twenty twenty four it
was at one hundred and three thousand, three hundred. That
means a net increase of eighteen thousand, six hundred people
in just four years. The health sector has added roughly
the workforce roughly the size of the population of Timidoo
(01:52):
since the last National government left office, that's thirty thousand people. Now,
very little of this seems to be making a massive difference,
or a difference for portional to the amount of money
that we spend, the number of people that we hire.
From June twenty twenty three to May twenty twenty four,
the number of patients waiting longer than four months of
treatment range from twenty seven thousand to thirty three thousand.
The Auditor General is now looking into wait times. Now,
(02:13):
all of this is a very long way of introducing
my next guest. How do you make sense of health?
How do you make sense of the economics of it?
How do you make sense of the funding of it?
He's wore many different hats. He was Parliamentary Undersecretary for
Health from ninety three to ninety six. He was Health
Minister from ninety six to ninety nine. He held the
Finance portfolio in nineteen ninety nine and then again from
twenty eight to twenty sixteen and twenty sixteen he gave
(02:34):
up gave that job up to get the top job,
Prime Minister of New Zealand, which means my guest is,
of course none other than former Prime Minister Bill English. Bill,
thank you very much for joining.
Speaker 2 (02:43):
Us, Good morning, Thomas, and congratulations on looking into all
those numbers.
Speaker 1 (02:47):
Yeah, sorry for the Sorry for the very long rambling introduction. Look,
can I just start by asking the most basic of questions,
does the health system need more money? Is the problem
the aging population and the funding not matching what we
need to handle it.
Speaker 2 (03:02):
The health system gets more money every year in a
growing proportion of government spending, so it grows at about
five or six percent per annum. The odd burst six
or seven percent talks about discussion about health cuts quite misleading.
The money goes up every year, that's not the issue.
I mean, of course we could decide to spend more
(03:23):
on it, but as you've pointed out, it's getting more,
but it's processing less, it's providing less, not providing health
services consistent with that, As you've pointed out, staff have
grown quite rapidly. I think from twenty seventeen to twenty
to about twenty twenty three, the health the nominal health
(03:46):
budget went up sixty percent, six to oh and any
politician promising that would have been praised, I think for
solving every health problem we've got so no more money
at the margins not It's part of an answer in
any particular circumstance, but it's not the key issue. The
key issue really is for New Zealand now is how
(04:09):
to extract itself from what's been one of the worst
public sector reforms done that I can remember. The health
policy world became dominated by this sort of idealizing of
an NHS type system, let's have just one big one.
(04:31):
It's precisely the wrong answer to the solution to the
problems they diagnosed, and those problems are much more to
do with what's driving demand for health services, so the focus.
So I've got to undo what was a disastrous reform.
(04:52):
It's turned out to have reduced productivity significantly. Even now,
it's still hard to find a decider in the health system.
So if you've got if you're a clinician with a
better idea, if you're someone in the community who wants
to help with dealing with homelessness that's feeding people into
the health system, you can't find someone to decide. So
(05:14):
that's just one of a number of issues that can
be improved quite significantly.
Speaker 1 (05:19):
One of the you know, just on if someone came
down from Mars, you know, when we still have the
DHB system and said, look, I think one of the
ways of getting more bang for your buck would be
to abolish dhb's. You have a lot of duplication. There
are twenty of them. That's a lot of executives, a
lot of back office. You abolish the duplicator, you get
rid of the duplication, you direct that money to the
front line. That means are more efficient. You can see
(05:43):
how the economic argument for the health reforms sort of
stacks up on that basis. So what has been lost?
I mean, first of all, I guess do you agree
with that kind of just very simple economic argument that
abolishing dhp's and centralizing leads to less duplication and more
efficiency in that regard? And then what has happened from
(06:03):
that basic economic argument to get to the system that
we have now where used there isult I mean, there's
a large degree of agreement with what you're saying, which
is that the system has gone from being kind of
balkanized and difficult to kind of grasp to being centralized
in one great organization. But that is actually no easier
(06:23):
to get to the bottom of which decision makers make
which decisions. Who I need to talk to?
Speaker 2 (06:30):
Look, I think the answer to your question is that
you can mistake complexity for an efficiency, and someone coming
from Mars would probably not diagnose it in that way.
I mean, the opportunities for improvement and health are generally
about better information flows, incentives, and clearer accountability. And I'll
(06:56):
just give you one little example, because it's a project
of Became was aware of providers of homeless, providers of
getting social providers getting people who are homeless into houses.
Were able to show that it reduced the bed nights
(07:16):
that a homeless person with mental illness was spending either
in a mental health unit or hospital from one hundred
average of one hundred and thirty a year to ten
across a group of about of one hundred people. Now,
that's this whole story about the data flows and information sharing,
which was incredibly difficult because health is a very controlling
(07:38):
system at the moment, they don't want to share data
with anybody. But the real issue was that having seen
the clarity of that solution, there was no one in
a position to decide to follow through to implement any
changes in the system. So you think there's an obvious
(07:59):
little problem replicated around the country, small group of people,
and there's a lot of these small groups, small groups
of people who taken who need an an ordinate amount
of service, disproportionate amount of service, but sensible interventions can
reduce that pressure on the health system, but more importantly
give them a better quality of life. There's no one
(08:20):
in a position, no one has a good reason to
make that sensible decision. Now, there's a lot of sensible
decisions get made in the health system every day. Actually,
tens of thousands of people are getting treatment. But if
you want to improve it at the margin, to deal
with the pressures on the funding that you've talked about,
then it needs to reorientate away from centralized control to
(08:43):
localized problem solving.
Speaker 1 (08:45):
So you're you're a community housing provider or someone in
the funded sector, and you use the health data that
you do have access to say well, look this is
our cost benefit analysis. You write a paper, you prove that,
But then you think who do I talk to? You
can't really talk to the minister because you know, the
minister has got a pretty booked diary. And let's use
(09:06):
the Timaru example again and the farmer housing provider and Timaru.
That's going to be pretty difficult to get a conversation
with the minister. Do I talk to you know, Health
HQ and Wellington? Do I talk to the Southern you know?
Is that the issue that is not there that they're
so centralized there's no way to get into the system.
Speaker 2 (09:25):
Well, in that case, people even people in the health system,
didn't know didn't know who they should talk to. And
this isn't a system which for twenty five years has
said its primary care lead. And so you do wonder
what are all the thousands of extra staff actually involved with.
While some of it's dealing with growing demand of an
(09:46):
aging population, but you've had in recent years a lot
of focus on talking and a lot less on doing,
a lot of focus on form and structure, and not
much focus on results and outcomes shifting gradually and it's
a bit painful for the health system, particularly when the
leadership of it has yet to settle down. But you know,
(10:09):
we do a bit of work on the on the
periphery of the health system, and there's the toolkit around
now to do a better job of dealing with that.
The demand that gives the system a sense that it's overwhelmed.
And if you go to an need, they'll say they're overwhelmed.
You talk to GPS, they'll say they're overwhelmed. Actually, a
(10:31):
lot of that demands predictable if you go and look
to the chronic users like the homelessness group we talked about,
and there are others people with serious diabetes, older people
who are in that sort of difficult period between hospitals
and rest homes. The solutions for that At the moment,
there's no demand in the system for those solutions. Everyone's
(10:51):
just saying, oh, it's overwhelming.
Speaker 1 (10:53):
So it's a way of finding alternative care models for
high users and finding some way of I mean, it's
a bit of a cliche, but everyone says the worst
thing that happened when the health system fails, it's when
someone ends up in hospital. You know that you want
to do everything. Obviously, every day people need to go
to hospital for a number of reasons, and that will
never be well, that will never change. But when the
(11:15):
health system is at its worst, it is when people
who don't need to be in hospital end up in hospital.
That's the most expensive thing, probably with the most expensive
public service that we provide.
Speaker 2 (11:24):
That's right, And I think there's two there's two kind
of concrete steps I think can be taken. One is
they have to set, in my view just the personal opinion,
they should separate out the core funding function from the
operation of the hospitals. The fact is that the hospitals
get more of the money than everyone else. Health New
(11:47):
Zealand's primary obligation, whether they articulate it this way, is
to their eighty thousand employees. And that's the recent track record.
So if the people who run the hospital have control
of the whole budget, the hospitals will always be their priority,
and that's been borne out by track records. So they
(12:08):
should separate out that funder from the hospitals and create
some tension between the funders and the hospitals, because what
happens now as the hospitals get the line's share of
the money, they just turn up every year and so
we've got cost pressures and the people are talking to
are their owners, not some separate funder. And I think
the other thing is primary care has kind of lost
(12:28):
its way. I think GPS. I'm married to a GP.
They do a great job, they're working hard, but the
understanding over twenty five years of primary care lead with
the phos it hasn't moved that far. Do Some good
stuff happens, but the incentives in there are not strong
(12:49):
to achieve the things they want to they say they
want to do, and this is one of the fascinating
things about health. At the moment, everyone knows what to do,
they've just forgotten how to do it right.
Speaker 1 (13:01):
So I'm glad you mentioned primary care because that's where
I wanted to move too. So I think the current
primary care funding model is about twenty to thirty years old.
You might have actually been involved with the sort of
transition period to it. I haven't actually gone that deep
into the archives, but there's a capitation capitation model is
the main funding model. What that means is gps get
(13:21):
a subsidy from the government from real free patient they
have on their books. They get more or less money
depending on the person's sex if the male female, and
the certain age and depending on their age. So if
you're at at the older end of the spectrum, you
get your GP gets a larger subsidy because you're likely
to see them a bit more. And then if you
(13:44):
use the GP more ten times a year, then you
get an additional the GP gets an additional payment. Basically,
the GP is subsidized to see you. Simeon Brown announced
some extra money for GPS a couple of weeks ago,
maybe even a month ago now. He said that he
was looking to looking to see what could be done
about the primary care funding model. It does seem like
(14:06):
it's on the government's radar. Everyone does talk about it.
Where do you think, I mean, you say, we know
what we need to do? What do we need to do?
What should we think?
Speaker 2 (14:14):
I think this really about three things in primary care.
One is just GP supply. There's too much workforce planning,
bureaucratic pretend manipulation about training. Another twenty thirty GPS. Look,
that's a useful thing to do, but what's worked has
(14:35):
been increasing is just supply and demand. When they increase
nurses pay back. In twenty twenty three there was something
like nine thousand nurses reregistered thet they were out there.
There's no nursing shortage now. In fact, right now you're
seeing one of the announcements from the minister, there's four
and a half thousand graduate nurses with who they are
(14:56):
trying to subsidize into primary care because the hospitals are
and can't take more nurses, just suddenly more than is needed.
And the same happened with specialists. They got significant and
so in GP and this GP's turn, they are on
relative compared to professional incomes are relatively lowly paid. If
you want more of them quickly, there's a simple, well
(15:19):
tried way to do it that has increased the increase
the income one way or another. However, the funding work.
I think that with the capitation formula, it's fundamentally not
it's fundamentally a reasonable system. Right, we've got a reasonable
mixed system, but you have got you're going to remember
who who does the patient connect with? Well, they connect
(15:40):
with their medical practice. It's not just the GP, it's
the nurses and other allied health there. But if you
think of it as the medical practice, which is you
know where the GPS the main service, that's where the
decision should be made about what happens. And at the
moment you've got a lot of primary care money goes
through phos and other other ways. They do some useful stuff,
but the incentive should be on the medical practice to
(16:04):
manage the patient. So a lot of that money you
should come through the medical practice instead of And at
the moment you've got essentially bureaucracies either in Wellington Head
office or the PHOS trying to design primary care at
a time when there's so much opportunity for renovation, you've
got telehealth coming, you've got AI coming people. A lot
(16:26):
of people still want the face to face. So what
you're going to how it's going to evolve is is
a nuanced mix of AI support, telehealth service, sometimes face
to face. Sometimes. The bureaucracy is in no position to
design primary care, and they've been trying to do that
(16:48):
for the last ten years without making much progress. So
those are a couple of things I think that could
help with primary care. Put all the money through the
medical practices, and if they need the PAH show services,
they'll pay for them and allow.
Speaker 1 (17:03):
The actually change the change the just change.
Speaker 2 (17:06):
How it's routed, and you'll get you'll certainly get more
value out of that because the practices are closer to
the patient.
Speaker 1 (17:11):
And I suppose the practices would would determine whether they
see that they're getting value out of the PHOS rather
than the PHO. They value themselves.
Speaker 2 (17:20):
And give them room for innovation, and I think the
bureaucracy pulled back from trying to plan all this with Look,
they can have nice ideas, but as someone said to
me at a conference here that couple of months ago,
we've been going They said, Look, we've been going to
these collaboration meetings for around primary health care and social
determinants of health. You know, the housing people are there,
(17:42):
the police are there, the youth workers are there. They said,
after three or four years, nothing's really happened, but we
all get on well. And that's been a feature of
the health system. There's a whole lot of talking with
each other and getting on well, and not enough clarity
about what each bit of it's meant to be achieving is.
Speaker 1 (18:00):
We do seem to be I think all businesses, all
all organizations are in the era of the conference. We
seem to be in a sort of.
Speaker 2 (18:07):
It's too much talking and not enough doing and and
too much restating the problem. I mean, how many more
times are you going to hear the facts that Maori
and Pacific do worse. Well, we've known that for a
long time. What we need to hear more about is
what they're doing about practical on the ground solutions.
Speaker 1 (18:27):
How do you feel about funding extra places at in
terms on the supply side? So I think it's you know,
it's a demand side solution. I suppose no, I suppose
to supply a supply as well if you pay them
more on as well. On the supply side, funding more
places at med schools, and then and talking with the
(18:48):
professional colleges, the Medical Council about how difficult it is
for some people to register to practice in New Zealand.
Speaker 2 (18:55):
Look, there's star are all part of an answer, but
if you want supply now, increase their incomes. It worked
with the nurses, it worked with the salary specialists, and
it will work with the gps because you've just got
a lot of them who have essentially retired from the field.
(19:15):
They're just saying, well, it's not worth my time working
another day, or I'm going to retire a bit earlier
because it's not worth the time and the effort, because
the pressure on them these days is pretty intense. Those
other solutions will take a long time and produce relatively small.
Speaker 1 (19:30):
Numbers, some incredible number of gps. I think of a
frightening number of planning to retire in the next ten years,
and I think that everyone who's sort of thinking about ways,
I'm ensuring they don't. As part of the problem of Australia.
(19:51):
Anyone who can work in New Zealand's more or less
can go to Australia. Australia is a richer economy. They
are a more successful economy. Australia can pay Australian prices
for obviously for health services for health professionals, but it
can do that because the Australian health system has access
to Australian revenues, mineral wealth, or good Australian stuff New Zealand.
(20:13):
Simm Brow mentioned in the press conference the other day
that we're trying to achieve parity in some areas of
a health system with the Australian system, But of course
that means that New Zealand doesn't have access to Australian
style government revenues. We're not an economy of the scale
that they are. We're not per capital as wealthy as
they are, so we're paying Australian prices on New Zealand incomes.
(20:35):
That's a huge problem.
Speaker 2 (20:36):
Well look, it's a challenge, but it's not a new one.
It's been there for a long time. And guess what's
going to be there for the next hundred years. These
are people in health motivated as much by professional fulfillment
as they are by the wages. Because if you really
thought the Australian story was very strong to be no
health professionals here that will be there, Well, they're not.
They're here servicing their own community, their own people, getting
(21:00):
your own sense of fulfillment. What they what will help
keep them here is a system where they're clinical roles respected,
but where they feel like they'll put up with an
awful lot if they feel like problems look like they
can get solved. That actually the big crowd and the
eed is gradually diminishing because someone's figured out what to
(21:23):
do about the bed blockers in the hospital, or where
there is actually a live, live project out in the
community reducing the incidents of rheumatic fever. You know, when
health professionals see those sorts of things actually happening, they'll
stick around. But if all they see is a kind
of blah blah strategy equity everything is a public health
(21:44):
crisis kind of rhetoric, well why would you stick around
for that if you want to do things right.
Speaker 1 (21:49):
So it's a culture that you think it's a culture
as much as income and then comes obviously part of it,
but it's culture as well.
Speaker 2 (21:55):
Yeah, I think the two go together. If you get
the culture more solue focused, less talkie, and you get
the incomes up for the groups who've lagged behind. Then
I think you'll get more stickiness in the workforce.
Speaker 1 (22:13):
The economists ran The Economists magazine ran a really good
piece on the healthcare in the English speaking countries recently.
Australia did very well. Australia is a very They always
seem to do well in these sorts of things. So
and one of the things the economists pointed to is
the relatively high uptake of health insurance private health insurance.
(22:35):
Now figures these are not from the story, but I
dug them up today. As of twenty twenty three, the
Financial Services Council thinks that about one point four to
five million New Zealanders have private health insurance, about thirty
seven percent of US at that time, and the comparable
figure for Australia for twenty twenty four was fourteen point
(22:58):
eight million ausies or fifty four zero point five percent
of the population, and then forty five percent have a
slightly lower level just had hospital cover. Do you think
one of the things we could look at, I mean
that they health economists say that the benefit that health
insurance gives is that it's a pricing mechanism. It prices
your risk and encourages you to do arious things. Obviously
(23:18):
there's a pre existing condition issue, but what I mean
do you think that that is part of the story too.
Speaker 2 (23:24):
Look, one of these stale arguments, very stale arguments in
New Zealanders around privatization. It's like funding cuts. There's no
funding cuts and health it goes up every year and
there's a kind of political part. Is the ideological thing
that you know, seend the right governments cut health funding.
That's not happened. It goes up. And the other is privatization.
(23:46):
The systems in the world that work are mixed, and
you get these outbursts. We're having one a bit now
over elective surgery. It's going to undermine the public system.
The fact is the public system doesn't need all the needs.
You need a mixed system, mixed insurance coverage, public and private,
and mixed provision. Unfortunately, in more recent years the policy
(24:11):
Ministry of Health two have been actively hostile to private participation. Now,
the most interesting innovation in health in the last ten
years in New Zealand is the nati far to a
nib essentially health insurance scheme in Auckland covering the NATI
far to a population. As far as i'm aware there's
(24:33):
no official attention to it, probably because it involves an
insurance company, but actually the work they've done, have done
and are doing there for some of the most needy
people in the country is just fantastic and the results
are impressive, and there should be a trail of officials
(24:55):
and politicians going to have a look at that because
it works and it was no initiative of government at all,
but it is sort of public private EU operates with
public funding and so on. So I think we've got
to get in New Zealand, we've got to get past
this silly argument about privatization. Focus on results and if
(25:19):
you can get better results with a combination of public
and private insurance coverage, why not. That's what they do
right across Europe. It's what happens in Singapore, it's what
happens in Australia. That's not some extremist right wing view.
And here there has been hostility to private provision. I've
never understood why it matters more who does the job
(25:43):
than achieving something for someone with significant health need and
then getting the results for the person is what matters.
And let's get a bit pragmatic and results focused about
who does it?
Speaker 1 (25:55):
And so just to pick up on that, you felt
that the bureaucracy not it wasn't just a sort of
less right political thing playing out in parliament, It was
a bureaucratic problem as well. That the bureaucracy is really
hostile to that.
Speaker 2 (26:07):
Yes, that's right, and some of them are quite open about.
I mean the PHO is quite open about being opposed
to corporate ownership of medical practices. Well, actually it's none
of their business who are the practices. What matters is
can a sixteen year old a sixteen year old girl
with depression and other physical problems get the treatment and
(26:30):
support that she needs when you know they struggle to
afford the transport public transport costs to get to the
GP clinic. You know, those are the kind of problems
that we should be focused on.
Speaker 1 (26:43):
And in terms of so what I mean, so the
uptake of public of private health insurance, private health cover,
I mean tax can you can look at tax concessions
or I mean perhaps a fringe benefit tax for employees.
Speaker 2 (26:54):
You know, Look, I have been through that argument many times.
I'm not a fan of tax concessions for it because
it so regressive. I mean, it's higher and come people
get the benefits of it. You know, you you were
the people who can who will they know how to
get the best out of the service, and they actually
still use the public service fairly extensively. So no, not
(27:16):
a supporter of tax concessions. And I don't think there
is any broader political support for it.
Speaker 1 (27:21):
And what was so, how would you encourage it? Then?
Speaker 2 (27:25):
Oh? Well, I think the private insurers have to encourage
it by doing a good job, you know, offering better
coverage at lower prices. That's how they'll attract people into it.
But I think the the the the right response of
the public system is to work with those who do
that and when and when when you when you get
(27:46):
the blend right, it works well. So one of the
projects I was involved in was down in the far
down and down south getting the small hospitals out of
public ownership. And most of them are south of Tamaru
and they're in community ownership or community owned companies. And
(28:09):
since they moved out of public ownership, there's been no
five thousand person health marches like they used to be
in the early nineties. And they are a great mix
of private non government ownership. They get the public funding
for the public services into those into their hospitals, and
they are great examples of fully integrated care in a
(28:33):
community of a type which academically the policy people want
to see. But to get it you need that public
private mix, public coverage, private ownership, and the community supports
the service. So this goes back to the point I
said before. We actually a lot of the solutions are known,
a lot of them have been in place before. We've
(28:57):
just forgotten how to do it because there's too much
talk about how what what I've seen branded is everything
is you know, everything is public health crisis, everything is
everything is mental health. Well that's that's, you know, sometimes
a useful discussion. But if that's all you're doing, you're
(29:17):
not actually solving problems.
Speaker 1 (29:18):
Do you think they sort of we should be more
specific and what we and what the problems are. So, yeah,
this specific problem, how do we solve it?
Speaker 2 (29:26):
Look, the policy system should be banned from producing the
five hundred and thirty sixth Analysis of the aging population
and its effect on health budgets. It should be required
once a month to produce a solution to one more
(29:48):
smallish problem that's actually solvable. Now. I think that would
sort out who's capable of solving problems and who just
keeps writing more strategies and action plans and needs analysis,
which is another one. Needs analysis is dead cheap, easy
with modern data and technology. So a lot of what
the policy function is carrying out these days is actually
(30:11):
a significant distraction from getting value for money and health.
Speaker 1 (30:15):
It's lay two blue skies and not enough to benefit analysis.
Speaker 2 (30:20):
It's not even blue skies. It's just the same old
gray skies of complaining about how hard it is. Well,
you know, it might be hard for you as policy analysis,
the damn sight harder for people aren't getting the service
they deserve. Get up on Tuesday morning and feel pretty sick,
like you know, and have to wait for eighteen months
to get their hip pain dealt with. So you know,
(30:42):
I've got really allergic to this, the kind of psycho
health crisis babble which solves nothing. Go and solve a
real problem.
Speaker 1 (30:53):
They do. I mean, I use the OAA a lot
to get papers out, and you do. You do have
to say that there is a the ratio of very
broad kind of papers about large problem yea, the agent
population for example, massive problems. There are a lot of
the relative to the papers about very specific targeted sort
(31:16):
of this is an issue that is coming up. Here's
how you might solve it. It seems to be.
Speaker 2 (31:24):
Or another layer there, which is how do we arrange
funding so that someone has a good reason to resolve
that issue. I talked about earlier on chronic of homeless
homeless guys with mental illness who are taking a lot
of hospital beds right now. There's there's a whole lot
(31:47):
of socioeconomic explanations for why they are how they are,
and you can go off to a conference and feel
good about that, but that is actually a real there's
real suffering there. There's real things going on right now
now as it happens. He's just often the problem solving
these problems often about information flows. So in that case,
(32:08):
it actually took nine months to get the hospitalization data
with the consent of the individuals. It took nine months
to get it out of the health system because are
such a closed, controlling entity, and that behavior completely contradicts
the endless analysis where they where people say we want
to deal with the social determinants of health. Well, the
(32:32):
entities who do deal with it, housing providers, people who
help people find jobs, dealing with youth mental health. The
health system usually won't share any information with them to
help them solve the problem that the health system has
(32:52):
that is overwhelming demand and that the individuals have.
Speaker 1 (32:57):
Who deserve support, and this is a privacy they site.
But the data should be anonymous, didn't it.
Speaker 2 (33:02):
Well, there's plenty of ways these days of using synthetic
data and nominized anonymized data, sort of random non identified data.
There's no will. The will at the core of the
health system is still of the public health opera. Not
I'm not talking about the clinicians here, but the public
health administration is control of information.
Speaker 1 (33:24):
And this is this is an example that you had
when you were minister, or is it one that's st
been aware of more recently?
Speaker 2 (33:29):
We have a we run a business that measures social impact,
so we get to see the interactions with the health
system and information flows is one of the one of
the key problems, and it comes down to some very
boring technical issues which if resolve, would allow a whole
lot of goodwilled people to to follow their own common
(33:51):
sense to resolve issues that we all believe can be improved.
Speaker 1 (33:56):
Just just finally, it's some it's March. The moment, it's
a budget by lateral season. I know that Finance Minister
Nicola Willis is having budget by laterals. I think last
week she had some, she had some this week. If
you were in the chair your you know, go back
to when you were Finance minister Tony Ryle comes at
(34:18):
you with a health budget bid. What questions are you asking?
What do you want to see from that budget bid?
Speaker 2 (34:23):
To get it out of the line, Well, I think
the key thing is not to spend too much time
nickel and diming for the last fifty million. Health has
the extraordinary privilege that they get first call on apart
from the automatic ones like National super and Benefits, first
call on the government's discretionary funding and they get well
(34:45):
over half of it now every year. The key questions
are what are you doing to increase the transparency and
accountability in the system and what are you doing to
solve the odd problems that represent future challenges for government.
Now you can't stop a population aging, but you can
(35:06):
deal with You can deal with homelessness, you can manage
chronic disease is better and if you think about it
as the finance minister, you know the poll of people
who have diabetes represent a significant opportunity to reduce future cost,
but more importantly, a significant opportunity to improve their lifestyle
(35:31):
the quality of life if we can reorganize ourselves, because
often the problem here is you know, you could say
to the diabetic, we've got to change your diet. Well,
some of them will, some of them won't, but often
the easiest lever for changes is the policymakers and bureaucrats
changing their behavior. So given that, say you take diabetes
an example where it's intensive as very well understood. The
(35:56):
treatments and support that's needed is very well understood academic
literature and clinical experience, but no one's in charge of
doing it. And despite twenty five years of PHO lead
primary care, they haven't got much better at it either.
And even where people say they have, they haven't got
systems for showing the making progress. Because as a finance minister,
(36:20):
you might say, look, if you're able to reduce the
incidence of this phenomenon, whatever it is, with diabetes by
ten percent, I'm willing to pay for that. But if
you can't show me, I'm not willing to pay. And
that's what I found most challenging as finance minister the
system that the publicly delivered services usually can't show you
(36:43):
whether they're making progress. But at the same time they
impose fairly significant requirements on non government delivery to be
able to show that they can change the world or
they won't get any money. So I would say to
the Finance minister, you must lift the standard of evidence
quiet for the assertions, and you must they must be
(37:04):
able to show you. There's a feedback loop where if
they said this program is going to this program is
going to fix all the problems with diabetes auromatic fever,
well come back in twelve months time and show us
whether it did or it didn't. That last but is
almost always missing. But it's powerful if you can get
(37:27):
it in place.
Speaker 1 (37:28):
And so that's the tafutawara. The hospitals, the tertiary level
stuff massive demands on the public purse, but you're not
you aren't necessarily seeing what you're getting for it. Whereas
if you have community organizations the funded sector, they say, well,
look we might be able to offer you this. The
demand to prove that they can offer you that is
so great that they're not getting a looking at the
(37:51):
money whereas if the same standard were applied to the
hospital system, to the tertiary level system, you'd get a
very different outcome.
Speaker 2 (37:58):
Well, remember a scrap of years ago, a bit of
out a date on this, this guy called Dave Latally in
South Auckland who does fantastic work with obese people, a
great motivator, saves lives and there's a great what's a
video on on social media where he's using a chainsaw
(38:19):
to demolish a wall because the guy who was in
there was too big to get through the door, and
the Tafida Aura decided to set up an obesity clinic
essentially competing with what he was doing. Instead of him
getting the funding, now he may have got some since
because Dave's a great communicator and very persuasive. Yes, but
(38:41):
that's a and could show results, like you could see
what was actually happening. Now the clinics at the uppatient
clinics at the hospital would not be subject to the
kind of demands that were made on him. And actually,
so you want a funder who's sitting there going okay.
So obesity at scale is an ongoing problem for us
(39:04):
as well as for those patients. Let's find who can
deal with it best. What you actually have is if
at the moment as the funding goes through the hospital,
because that's the top priority, and they'll set up an expensive,
expensive clinic which may or may not whose effectiveness may
or may not be measured.
Speaker 1 (39:24):
Just just the last question, what do you think of
the new multi year funding funding system for health. It's
now funded on a cross pressure multi year basis. Actually,
Bloomfield said ten years. That's a very long period of time.
The current plan is for three years. What do you
think of that system?
Speaker 2 (39:39):
Look, I don't think that makes a lot of difference.
You know, it's going to go up five or six
percent compound per year, and it might be a bit more.
So let's just say for the next ten years that's
going to happen. And that is the truth of it.
It doesn't matter what the partisan claims are. It'll either
go up five or six or a bit more seven
or eight. The real issue is how how are we
(40:00):
using the money? So let's stop wasting time on that
rhetorical scrap and look at the productivity of the system.
And you know, he has a very basic set of numbers.
You've quoted big increase in health professionals through the throughput
of the system. In patient and outpatient discharges and GP
(40:23):
visits hasn't changed much over that time, but there's something
like twenty percent more doctors and nurses now. They're not
all sitting around lazing being lazy. But it is a
legitimate question to say, okay, we should be getting more
value for those inputs. That's where the debates should be,
rather than this time wasted on a funding track every
(40:45):
finance minister knows is going to go up pretty much
the same every year for the next ten years.
Speaker 1 (40:51):
Ran well, Billinglish, Thank you very much. That was there
was fascinating stuff. I really really really appreciate your time
and insights into into the state of the health system.
Speaker 2 (41:01):
Thanks for joining us our problem, Thomas Sinky.
Speaker 1 (41:03):
That was on the tiles for another week. You can
find us on iHeartRadio or Worrithervi your podcast
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