Sunday16th August 2009: Q+A interview with Health Minister, Tony Ryall.

Points of interest:
- Government admits it’s “tightening belts” in health
- Minister to create new National Health Board, cut committees and amalgamate ‘back office functions’, but denies he’s “restructuring” the health sector
- “There are going to be fewer people” working in the health sector
- 950 doctors, nurses and midwives have signed up to bond scheme

The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can be seen on tvnz.co.nz at,
http://tvnz.co.nz/q-and-a-news

MARK Each year Health, the health system costs you and me 12 billion dollars, and it's not enough, too many patients say they're waiting too long for treatment. A new ministerial review says continuing to pump ever more money into health is unsustainable long term. Health Minister Tony Ryall says National will continue the growth in health spending but will be cutting bureaucracy and moving resources into the front line.

Tony Ryall there in our Wellington studio – Minister, thank you very much for joining us. Twelve billion dollars, is that enough?

TONY RYALL – Health Minister
Well look I think I think most New Zealanders have a really strong commitment to the public health system as does the government and 12 billion dollars is what we've got at the moment and that’s what we're dealing with. What I can tell you, the one surety in politics is that health spending always increases, the real question is making sure that we get the best value for patients for that investment, and that’s what we're busy working on.

MARK Always increases. Look at the election you promised that National will continue the growth in health spending set out by the Labour government. Now your ministerial review group says we do not have the resources to continue spending increasing amounts of public money on the public health and disability system, so what’s it going to be?

TONY Well we are continuing to put more money into the public health system. In this year's budget half of every new dollar committed in this year's budget went to health. So we got 750 million, the other 30 government departments and ministers got the other 750 million, so John Key, Bill English, have a very strong commitment to continuing investment in the public health system, but things are getting tighter, and just as families are having to tighten their belts and economise, we're doing the same thing in the health system. We have to make sure that every dollar is going in to get maximum value for patients, so we're putting a lot of effort into doing what we can to reduce administrative overhead, try and reduce duplication, get that money to the front line to improve services.

MARK Okay you got some money this year, can you guarantee there'll be an increase next year?

TONY Oh look I'm absolutely certain there will be an increase in health funding next year, what that is I can't tell you at this stage cos there's a budget process to go through. What our focus has to be on is making sure that what we're spending at the moment we're getting best value for. What we know is we've inherited a system where over the last nine year the health budget doubled and actually fewer people on a per head of population basis got operations, so there's a disconnect. More money doesn’t necessary mean more service, but what we know is we will be putting more into health, we're putting a much greater effort into trying to release more of that cash to improve front line services. I think pivotal to that has to be engaging our doctors and nurses more in running the health system. We've gotta get their expertise as part of the process to make sure that the money is well spent.

MARK But hang on, is this some idea that you're the first person to have thought of it, I mean haven't successive health ministers said, we've got to involve the doctors and nurses, yet successive health ministers come up with their own reforms.

TONY Well look, that’s a very valid criticism that often people have talked about, engaging doctors and nurses and not much has happened. Well this government's made huge progress in that. We have made it an accountability for District Health Boards to re-engage with doctors and nurses, because it's the only way we're going to improve services for patients. For example, on Friday I'm going to go to Tauranga Hospital visiting a ward there, where under the leadership of nurses they’ve increased the amount of time that they spend with patients by 50%. Now you can see the value for patients from that, that’s being led by nurses and doctors themselves, that sort of quality improvement comes from engaging the staff.

MARK See I'm interested Minister in terms of what your concept is of an effective public health system because as you know, as we get wealthier, as technology advances there are more and more things that we might expect from our health system. Fertility treatments for instance, I mean much more sophisticated treatments, is there a place for those in the health system under your watch?

TONY Well there certainly is a place to try and improve the health services and the options that New Zealanders have, but what we've got to do to achieve that is a couple of things. We've got to make sure we've got the health workforce to do it, and we have to make sure we've got the resources to do it. Now right now, you know things are getting tighter right around the country for all sorts of people, so we have together get maximum value for what we're doing, but we're never going to achieve many of these things if we don’t have the health workforce to do it, and that’s why the government's put a lot of effort into our strategy to retain and recruit more doctors, nurses, physios, etc. Fundamental to that is our first step to try and keep our young doctors, nurses, midwives in New Zealand. We've introduced a voluntary bonding scheme which has been very successful, we've now got 950 young doctors nurses and midwives on that scheme, with an incentive to write off their student loan if they stay in the country for between three and five years. That makes a difference, but what I've really put a lot of effort into Mark is trying to stop this plethora of committees and duplicated effort that’s been going on in trying to shape our health workforce, and just last week we announced we're bringing all those committees, all that work together, under one organisation, so that we can get real traction, and we're going to be backing it with resources, money, to get this stuff dealt with, because the big problem I've inherited is just huge numbers of committees, huge duplication, 21 of this, 21 of that, and we have to bring it together to get maximum value for patients.

MARK Minister I want to discuss those reforms in a moment but I just want to pursue this issue of your view of health and what's important. I mean say for instance procedures like stomach stapling could end up having a huge overall saving to our health budget because interventions taken now avoid long term costs downstream, do you believe that matters like that, and I come back to fertility treatment that many New Zealanders see as a right, is something that should be available in our public health system?

TONY Well those procedures are available in the public health service, we are making a contribution to those, expanding them is dependent on our workforce and on having the resources to do it. Look what the government wants to do is to make sure that people are getting the service they need. There was a very clear message at the last election that New Zealanders were worried that they had to wait too long in emergency departments, the budget had doubled but we were getting fewer elective procedures, not keeping up with the population growth, and cancer treatment waiting times weren’t good enough. So we've made those our three big priorities in hospitals for this year, is to get real progress on what was worrying the public. Now a lot of stuff in Health is important, but these areas are urgent and that’s where our big focus is going on this year

MARK Look if you want to cut the waiting list, do you effectively then have to prioritise? Do you say to someone look, and it's a matter of personal responsibility which is something your government believes in, if you're a smoker, if you're obese and you do not look after your health, you should be further down the queue than say someone else who's looked after their health and is facing some sort of health crisis.

TONY Look I don’t think there's much point in having a discussion about trying to do that, because the fact is doctors and nurses are not going to deny patients treatment on the basis of what they were doing with their lifestyle. The government wants to increase the amount of surgery, the opportunities people have to be dealt with by doctors and nurses, and that’s where our focus is going into. It's about the public hospitals organising themselves well, supplementing it with some private sector capacity if that’s necessary, and also the strong commitment from the government that we're going to be building 20 dedicated elective theatres specifically in the public health system in order to provide more surgery. Now these are the priorities that the public have, I don’t want to be a Minister of Health that culls 30,000 patients from waiting lists like the previous government did, because they can't get their investment right. We're putting a lot of effort into that because it's a public priority.

MARK So in terms of how you're looking at the problem Minister, you’ve put those 30,000 back on?

TONY No, those 30,000 people were culled by the previous government, I'm looking at increasing the amount of surgery that we get in New Zealand, making sure more people get the opportunity to see a hospital specialist, and what I can tell you is in the last six months we've had the biggest single increase in elective surgery we've ever seen in the country, that’s because we've got a strong focus on it, we've told the District Health Boards it's a priority, because the public says it's a priority.

MARK Minister, you’ve ordered a review, and you know as I said I mean I don’t want to sound cynical, but I've seen many many Health Ministers come in, order a review, this is going to sort it out, now you'd presume if one of them ever got it right there'd be no need to have the subsequent reviews, but you also came into – again I come back to your election manifesto saying – “restructuring doesn’t necessarily change the way people work, structural change diverts the attention of doctors and nurses away from improving patient care. National believes our health service can be improved without the distraction of restructuring” – yet that’s exactly what you're proposing

TONY Oh no that’s not what we're proposing. We're releasing a report today, which is absolutely consistent with what we said before the election, was that we want to move administrative overhead out of the system and into the front line, cut back on waste and duplication to release resources to go into the front line services. We're going to be releasing a report today by a ministerial review group, which included some of the best minds in the health system, which is very much focused on how we can bring together back office functions in the District Health Boards in the Ministry of Health around IT, procurement, payroll for example, and use the benefit of bulk purchasing to get more money into the health service. Now those changes will mainly affect the Ministry of Health in Wellington, but the strong focus is freeing up administration overhead and getting the resources in front line services. I've gotta be clear to you, the government will not accept any recommendations that increase bureaucracy and take resources away from front line services. We've put this group together, smart minds, to look at how we can do that, how we can get the resources out of administrative overhead and into the front line, because Mark it's unacceptable that over the last nine years the numbers of managers and administrators in our hospitals grew from eight thousand to ten and a half thousand.

MARK Okay Minister, when you say administrative overheads, you're talking about jobs, so two and a half thousand are going to go?

TONY No look, there are going to be fewer people involved in a lot of these administrative functions, because we have to move the resources into the front line, we made that quite clear before the election.

MARK How many Minister?

TONY Well we're going to work through the recommendations of the report to identify that. The report makes it clear that there should be no more staff, and potentially fewer, under the proposals that this group has made, and the government will go through and pick and choose what it wants to do here. We've been very clear, we've got to move resources from the back office to the front line, because resources are limited.

MARK Sure, but you’ve already noted that the Health bureaucracy if you like has grown from eight thousand to ten and a half, I presume you're seeing that two and a half as unnecessary?

TONY Well it's actually more than ten and a half because on top of that we've got fifteen hundred in the Ministry of Health and a whole lot involved in other agencies as well.

MARK How many of them will go then?

TONY Well we'll be working that through with this report. What I can tell you is that even capping that growth is a significant effort, even stopping that growth in bureaucracy is a significant effort, and we've done that, we've put a cap on the growth of management and administration in the health service, it's working, we're keeping control of it, but we want to make further improvements, we're wanting to move resources from the back office to the front, because that’s what patients want.

MARK The review team of course was led by Murray Horn, now he's a banker, spokesman for the Business Round Table, and as a senior official of Treasury through the 90s his CV boasts – “led the Treasury effort in securing a substantial reduction in government spending immediately after 1990.” Now that suggests a rather radical choice for someone reforming the health sector doesn’t it?

TONY Well Mr Horn chaired the committee, but it's a committee – a review group – which includes a smart DHB manager, PHO chairs, a number of doctors, nurses, people with strong experience at the front line of the public health service, people who know the problems and they’ve identified them. It's quite clear from reading this report that we've got a lot of trouble with too much duplication in the health service, we've got 21 payrolls, 21 approaches to IT, capital is not being spent well across the sector, and they’ve identified a number of proposals that they have, of how we can get better value for the dollar that you're putting into the health system, about moving administrative resources to the front line. Now I'm releasing this report, inviting the public and the health sector to make comment on it. We're going to work through the recommendations, do what's best for New Zealand, we're not going to accept anything that adds to bureaucracy and takes resources away from the Health front line.

MARK Why not ditch the DHBs then, as you say 21 duplications in services in lots of areas?

TONY Well we made a commitment before the last election that we wouldn’t forcibly amalgamate any District Health Boards because that would be hugely disruptive to our front line staff. We want to focus on improving services for patients, if you have a big restructuring of District Health Boards that just diverts everybody's effort. You know I travel around the country and I meet a lot of people who say look the answer to this is amalgamate District Health Boards but not their own. So we've made a commitment not to do that. Our commitment is clear though, we want to move administrative functions in a way that releases resources for the front line, and if we can consolidate payroll and IT and procurement the way that Capital has worked out, that gives us an opportunity to release cash which improves front line services.

MARK But you're effectively talking about like with a Pharmac model, that if you have one national group with greater purchasing power and decision making power, that can be done more effectively. That’s the nub of it is it?

TONY Well that’s certainly the core recommendation of the ministerial review group, and we'll be looking at that to make sure that – see if it works for New Zealand, and if it does Ministers will consider it. The opportunity here is to take away so much of the duplication. You know you don’t need 21 payrolls, and you don’t need 21 procurement systems. If we can harness the power of bulk purchasing, that saves money, and that’s what we talked about before the last election, reducing administrative waste and putting that on to front line services.

MARK So in the end it is about saving money, that’s the bottom line?

TONY It is about saving money that can be used at the front line of health services. Look, there is a strong and insatiable demand for improving front line health services, we know we need to do more to help try and retain our doctors and nurses in the country. You’ve gotta get best value for every dollar, and I don’t think New Zealanders want me tying up huge amounts of money and endless committees and lots of duplication when we could release those resources to improve front line services. This report for example Mark has a plan to reduce 157 Ministry of Health committees to 54.

MARK Sure but Minister aren’t you effectively, is it shuffling the deck chairs, you're saying look I'm going to get in, I'm going to be tough, we're gonna cut these bureaucrats, which was a popular message during the election, and instead you're going to set up another system of dealing with it, you're just going to create more bureaucracies and are replacing - you know ten committees with five, where's the saving?

TONY It's a proposal from this group, I'll be quite clear with you. We will not adopt any recommendation unless it reduces bureaucracy and frees up resources to support more services in our public health system. We've had nine years of endless committees and bureaucracy growing, the patients and the public are clear the resources need to shift, and this is part of our plan, to do that is to have a look at this group, look at their recommendations and accept those that work.

MARK What makes you think it's going to work?

TONY Well I think there's quite a lot of consensus in the health service that we do need to cut through this problem of 21 this and 21 that, and another duplication in the Ministry of Health. We need to bring the stuff together to consolidate it, to release the cash to improve services for front line health. Now for example, in the last ten days we announced that we're bringing all the workforce effort to Health under one organisation. We simply can't have endless committees spread across the health service with the money spread thinly, when if we could get it all together under one organisation, with a strong vision and plan, we'll get the progress we need.

MARK Minister, if people don’t have confidence in our health system, they go to private health insurance, which I think about 32% of the country already has. Do you have private health insurance?

TONY No.

MARK You don’t believe in it?

TONY Well it's a choice that people have and they can make as per their circumstances, but I don’t have private health insurance, I'm strongly committed to the New Zealand public health service, I see it as my job as Minister of Health is to make sure that New Zealanders know that a National government can be trusted to protect and improve the public health system, and I spend most of my day working on how we can improve the public health system.

MARK So you wouldn’t recommend people take out private health insurance then?

TONY Look that’s a choice for people to make, it's not a choice that I've made for my family and I.

MARK Health Minister, Tony Ryall, thank you very much for your time.

ENDS

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