1 AUGUST 2018
Speech at the Waitemata DHB Annual CEO Lecture Series
HON DR DAVID CLARK
Health
It is my privilege to speak to you as Minister of Health and discuss the Government’s priorities for the health and
disability system.
The Government’s policy platform for health is the product of discussion around the country with people like you on the
frontline both before and after the election, which is why the opportunity to discuss this with you is valuable to me. I
believe in a system that works cooperatively, and can have honest and frank discussions with one another. We’re not a
big system in terms of scale, but we’re rich in innovative and passionate people like yourselves.
The Coalition Government, sees the health and disability system as an asset that belongs to and should serve all New
Zealanders. A high functioning and universal health system is a core part of the make-up of Aotearoa New Zealand. It
reflects the view, from both sides of the political spectrum that all New Zealanders deserve and expect support for
their health and wellbeing, so that they can contribute to their communities, families, and wider society.
Challenges
But what we’re seeing and hearing, through the voices of health professionals, consumers and communities across New
Zealand is that this asset has not been adequately maintained, or prepared for the future. This isn’t just the bricks
and mortar, it is the people that work in our health system as well, and investment in the areas that we know will help
manage future demand.
Underfunding over the last nine years has strained our system and created the need for significant change. Health
spending peaked at 7.41% of GDP in 2009/10 when the previous Government took over, and dropped to just 5.95% in 2017/18.
DHBs’ have borne the brunt of these cuts, and the Coalition Government has inherited combined DHB deficits of $225
million in 2017/18, up from just $7 million only four years earlier.
Too many New Zealanders are currently being left behind by our health system. In the almost two decades since the Public
Health and Disability Act made removing inequalities an objective of district health boards, overall, only marginal
progress has been made.
Many Māori and Pacific New Zealanders, and New Zealanders on lower incomes, still have significantly worse experiences
of the health system than the rest of New Zealand. They have higher rates of major conditions like diabetes, cancer and
mental health, have less trust and confidence in the health professionals supporting them, and live shorter lives.
As a country that prides itself on giving everyone a fair deal this cannot be acceptable. We must change how we work to
live up to the principle of a public health system that delivers results for all New Zealanders, rather than most New
Zealanders.
Underfunding also means that investment to prepare the health system for the future has been overlooked. Many of you
have driven innovation on the frontline to help manage limited resources better, and I thank you for your hard work. But
innovation also means investment in new models of care, new technology, new buildings and infrastructure.
This Government is committed to addressing this need for change, and investing to shift the system back to a sustainable
pathway. It won’t all happen in one year, and things like the 10 year programme of infrastructure investment won’t
happen in one electoral cycle, but this Government is committed to facing the hard choices needed to put the system on
sound foundations for the future.
What this means for you, as the people that form the lifeblood of our system, is that you have the support of a
Government that is making historic levels of investment in health, and a Government that is listening and working
alongside DHBs rather than against them.
My priority - Equity
My core priority as Minister of Health is improved equity of health outcomes New Zealanders experience. The disparities
different people face are largely preventable, yet persistent across the health and disability system. This failing for
groups of New Zealand’s population carries costs for us as a country, for communities and for individuals in terms of
money and quality of life. I want a health system that delivers the same high-quality health outcomes for all people, so
they can reach their full potential no matter where they live, what they have or who they are.
Recent statistics are sobering – in 2013 rates of amenable mortality were almost three times higher for Māori, and
two-and-a-half times higher for Pacific peoples than non-Māori, non-Pacific New Zealanders.
We need to know what is driving these persistent disparities, where we can invest and innovate, and how we can spread
that innovation. We will take a whole of system and whole of life approach, making a people centred system designed in
partnership with communities. I’ve discussed this challenge with DHB chairs and CEOs around the country, and expect to
see an equity focus in all major decisions.
This is not something that will be fixed in the short-term. It requires us to work together, to challenge and hold each
other to account. There is great work going on in many pockets around New Zealand, but the overall results show we need
to spread what works and change the system settings that are contributing to what doesn’t work. In the first instance, I
have prioritised change in primary health care, mental health and wellbeing, and child wellbeing, as the first cabs off
the rank for reform.
Quality and accessible primary health care services are at the centre of an effective health system. They are the front
door to our health system, and a referral pathway that unlocks the services you provide in secondary and tertiary
settings. That front door needs to be open to everyone. If someone is sick they need to be able to see a member of the
general practice team. They need to be able to afford it, and we’ve seen GP fees going up for some time, which impacts
most heavily on the people often facing the greatest level of need.
Investing in primary health care isn’t just the right thing to do, it’s the smart thing to do – it helps keep people
well and reduces the burden on secondary and tertiary services.
The first step toward this was the largest single investment in primary health care in recent memory to reduce general
practice fees for the New Zealanders least able to afford them. This has been done using the income-tested Community
Services Card as a proxy for need. This will widen access to low cost fees across the country, and more than half a
million New Zealanders will see the cost of primary care visits drop by an average of $20 – $30. Alongside this, the
Free Under 13s primary care scheme will be expanded to Under 14s, benefitting a further 56,000 young people.
The next priority under equity is mental health. We know that mental health services are under pressure. The challenges
occur across the spectrum from access to support for mild to moderate mental health needs in the community, through to
more intensive support for high needs and people in crisis. Mental illness currently accounts for 15% of the total
burden of disease, and that proportion is growing. This burden falls more heavily on Māori and Pacific peoples.
The Government has commissioned a short sharp independent review to report back on 31 October. It has been deliberately
set-up independently with an impressive panel to deliver it so that it can deliver challenging findings. They have been
interviewing people around the country, from emergency services, staff and members of the sector, and crucially from the
service users themselves, and their families and whanau.
In the interim, the Government moved to improve the conditions of people working in the mental health sector, and the
sustainability of the sector itself, by spending over $40 million per annum to extend the pay equity settlement to
mental health support workers. We’ve also invested more than $250 million across a range of initiatives in Budget 2018.
Thirdly under equity is the health sector’s support of the wider Government priority to improve Child Wellbeing. A
healthy start to life is one of the greatest contributors to health and wellbeing later in life, but too many children
in New Zealand are missing out. Making sure all children can live in a healthy and safe home, are well fed and in school
is a responsibility we all bear as members of the social sector. We know that transformational change requires us to
work seamlessly with other providers and agencies and therefore I am working with other Ministers across the social
sector to make this happen.
This work is tracking towards next year’s Budget, but in the meantime the Government has already moved to shore up
community midwifery by, again, making the largest investment in over a decade.
Equity relies on a strong and sustainable public health system
Achieving equity in health outcomes relies on a strong, universal, publicly funded healthcare system. When countries
have a strong public delivery of health services, that ensure that all people can access services, then they are on the
road to equity.
We know from international evidence that systems with a strong publically funded core deliver the best health outcomes
for people. It means we need the right elements in place to deliver high quality services now, and into the future. It
means we need a strong and well supported workforce. It means we need fit for purpose infrastructure.
That is why this Government has delivered the largest increase to DHB funding since the last Labour Government’s DHB
funding track ran out, and on top of that has invested $750 million in capital spending to address some of the immediate
infrastructure challenges. This will not be a one-off, as the Government has committed to appropriately resourcing DHBs
to do their jobs.
Having a strong public health system also means that the system is correctly oriented to the demographic challenges
facing us. The impact of our ageing population is beginning to be felt, and will be felt even more heavily over the next
ten years as the post-war baby-boomer generation grows to an age when demand for health services traditionally
increases, and caring for these people will place huge pressure on the capacity of our health system, and our workforce.
This “ageing” of the population is being faced across the developed world and it is well acknowledged that we cannot
meet the future demand without changing how we deliver health services.
Likewise, we are facing an increasing prevalence of chronic conditions. This is linked with an older population, but
also relates to an epidemic of obesity, lower physical activity and poorer diet across the population. If we can’t
improve public health, and if we can’t help people to better manage their conditions in the community, then we will face
an unmanageable tide of people in our wards and emergency departments.
In light of these challenges, the Government has established a Review of the Health and Disability System. This is
designed to make sure we have the right system settings for the future. The review will be deliberately wide ranging,
and designed to look at all aspects of the health system. It will be led by an expert panel and I expect it to engage
fully with the sector and the public to inform its recommendations.
I see the review as a once-in-a-generation opportunity to optimise our health system to face the challenges of a growing
and ageing population. It was the opportunities this review presents, rather than the prospects of career enhancement
inherent in the role, that led me to put up my hand for the job of Health Minister.
It will deliver an interim report in July 2019, with a final report to me by March 2020 with recommendations. Those
recommendations will cover:
- how the health system can improve accessibility and outcomes for all populations
- whether the health system promotes the right balance between availability of services, (particularly tertiary
services) population density and proximity
- whether the current system is well-placed to deal with environmental challenges such as climate change, antibiotic
resistance and technological advances
- whether there are changes that can be made to the health system that would make it fairer, more equitable and
effective
- how the technological and global healthcare context is evolving, what opportunities and risks this rapidly-evolving
context presents, and whether there are changes that would support the health system to adapt effectively given the
rapid changes underway.
This review will build on the ongoing work of the Inquiry into Mental Health and Addictions, my Ministerial Advisory
Group and the Waitangi Tribunal’s Health Services and Outcomes Kaupapa inquiry.
DHB Performance
The Review will need time to develop recommendations on these tough issues, which is why I have set a deadline of March
2020. I’m not interested in a quick fix for three years; I’m eager for recommendations that will set us up for the next
thirty years. In the meantime I have instructed officials to work with DHBs to develop better monitoring and support for
DHBs to do their jobs, which includes a better set of accountability measures rather than the limited health targets of
the past.
In response the Ministry of Health is currently working on a number of workstreams focussing on aspects of DHB
performance, as well as the performance of the wider health system. I am very pleased to see that DHBs have a key role
in the governance of those projects and will be contributing substantially as work progresses. The outputs expected from
these projects in 2018/19 include:
Firstly, design of the revised DHB performance framework, a refresh of the monitoring and intervention framework and
implementation of the associated reporting and monitoring,
Secondly, development of proposals for improved DHB Board inductions and implementation support (which may enable
increased identification and sharing of good practice across the sector), and,
Thirdly, changed approaches to annual planning in 2019/20.
The challenges facing the sector are large and complex, and as I have noted, the system has been under-funded for some
years. No responsible government could realistically solve all of the funding issues in one Budget. This will mean that
DHBs will continue to need to get the best possible results for their populations from resources which this Government
has increased - but not without limit.
You may have also heard in the media that we are making changes to how we measure success. As you will all be aware,
measuring and reporting on things is a great way to drive the behaviours you want to see in a system, but if you don’t
get the measures quite right then it can drive perverse incentives and sub-optimal distribution of resources. We’ve been
pretty vocal as an opposition party, and now in Government that we don’t think the previous set of Health Targets hit
the mark.
I’ve asked the Ministry to deliver a new suite of measures that focus more on the results New Zealanders care about –
better health outcomes, rather than just activity. This doesn’t mean that the work you all did to deliver on the
previous Health Targets was not worthwhile – it was – and some of those expectations will stay in place in the short
term as well.
The revised framework will have a broader focus, recognising that the health and wellbeing of families and communities
is about more than just what happens within the walls of this hospital. They will also have a naturally medium and
longer term focus as we start measuring things that can’t be changed overnight. This will support those of you on the
frontline that are working to achieve meaningful medium to long-term shifts in how the system functions and delivers for
New Zealanders.
The Ministry is refining its advice on the interim set of measures and will present it to me shortly, and will provide
me with advice before the end of the year with a more comprehensive framework that links with the DHB performance and
monitoring work. I look forward to discussing these with you when they are ready for wider consultation.
Looking ahead to Budget 2019
As you know, the 2018 Budget made significant strides to stabilise and invest in the health sector – over $1.6 billion
of additional operating and capital expenditure in 2018/19, and $3.2 billion over the forecast period. Even within that
health envelope, we weren’t able to do everything we wanted and I’ve been quite open about some of the prioritisation
choices I’ve had to make.
This year, as we move toward Budget 2019, the Government is focusing on a wider framework that focuses investment on its
contribution to ‘wellbeing’ of New Zealanders, rather than the exclusive focus of prior government’s on economic return
on investment in a very narrow sense. The Treasury has developed a Living Standards Framework, which you can view and
engage with on their website. That framework focuses on Government investment’s impact on four capitals:
1. natural capital – the health of our environment
2. human capital – which covers the skills, knowledge and physical and mental health of our population
3. social capital – which covers the connections within and between our communities, our norms and values, and
4. Financial and physical capital, which has a more traditional economic lens.
I outline this because the health system contributes to, and is supported by, each of those four dimensions. Safe
drinking water and healthy environments are a critical contributor to natural capital. Health and wellbeing is a
critical contributor to building skills and education, which both contribute in turn to better health and wellbeing.
Social capital is a measure of the health of our communities.
This is a way of thinking that values the role of the health and disability system in New Zealand society. But it also
emphasises the interconnectedness of the whole social sector. As I highlighted before, it is my expectation that the
health sector works collaboratively with the welfare sector, with social housing, with education, and with the justice
sectors. A health society is built on those pillars that exist outside these hospital walls, and I challenge you to
think about how that more holistic view can be incorporated in your day to day decision making.
So, in conclusion
I wish to thank you all for the work you do on a daily basis, for the challenges you face so professionally, and for the
skills and dedication you bring to work.
Thank you for your attention.
Tena koutou, Tena koutou, Tena koutou katoa.