On Newshub Nation: Lisa Owen interviews Health Minister David Clark

Lisa Owen: It’s not an easy time to be the Health Minister. Since the Labour-led government took office, there have been revelations of mouldy, damp hospital buildings, serious staff shortages, a lack of medical resources, and increasing demand. Minister David Clark has asked an expert panel to review the entire health system, and an extra $4 billion was allocated to health in this year’s budget. Well, David Clark joins me now. Good morning, Minister.
David Clark: Morning, Lisa.
Health — it has the potential to be an absolute bottomless money pit, and a ministry performance review from December last year found that the current model for delivering health services is not fiscally sustainable. So I’m wondering — despite all your very best intentions, do you accept that there just simply will never be enough money?
With health, it is about maximising what we get for the money available ¬— making sure New Zealanders get the health services that they would expect — and that means it is timely to have a review and look at whether we could do things better and could get more out of every health dollar.
So you don’t want to just keep throwing more money at it.
Absolutely right. We want to make sure we are the best health system in the world, and we compare, actually, relatively well to many of the countries we would compare ourselves to. We have a quality health system and, in many cases, we provide care cheaper, but we’ve got to look ahead 30 years; we’ve got a growing and aging population, and we need to prepare for that.
So your current spend is about 20 per cent of Government’s budget; do you think that’s about right?
I, of course, would like to see that grow. Western countries—
What’s the sweet spot?
As countries get wealthier, they tend to spend more of their budget on health services, because health is something that’s incredibly important to everybody. Without your health, you don’t have much. So I’d expect that to gently grow over time.
Do you have a percentage in mind?
I don’t have a particular percentage.
Okay. Well, as part of your health review that you mentioned, there’s 20 DHBs that we’ve got at the moment; they’re going to come under scrutiny, obviously. How much does it cost, in total, for all their administration?
For the administration across all the DHBs, I don’t have a figure for that.
Why not?
That’s one of the things I would expect the health review to look at — what are the costs? Because at the moment, there are some inefficiencies, and I think people — clinicians, people who access health services — can see it with all the different DHBs. They duplicate planning functions. They duplicate a whole lot of functions. Unfortunately, one of the alternatives is saying, ‘Well, let’s put a cap on administration,’ which the previous government did, and one of the consequences of that is you’ve got surgeons, who are paid a phenomenal amount every hour, writing their own case notes, and so there are perverse incentives; you’ve got to optimise the settings around administration.
Do you not think it’s bizarre that there is no single figure for administration across these 20 DHBs?
It’s the kind of thing I would like to better understand, and that’s part of what I would hope would come out of the review.
What’s your gut feeling? Have you got too many of them? What would be the optimum?
I think that the whole system settings are something that need to be reviewed — whether we actually have DHBs; how do we put more focus on primary care?
So you haven’t ruled out getting rid of them altogether.
I have not ruled that out — not ruled it in, not ruled it out. That’s how fundamental I want this health review to be. I want to look at all of the settings.
You’ve got DHBs billing each other for services. You know, if a patient comes to them, then they charge it back to the other one. It all seems very complicated. Your gut feeling — should you get rid of them?
My gut feeling is that we need to have a good, hard look at it. It is, until now, the best system anybody could think of, and, as I say, we do compare well to other countries, so part of having a detailed review is not throwing the baby out with the bathwater — trying to preserve the best of what we’ve got but looking to the future with that aging, growing demographic, more diabetes, more cancer, and other expensive conditions to treat.
One of your top priorities that you have identified is addressing health inequalities for particularly Maori and Pasifika. How bad do you think those inequalities are?
Well, they’re growing. I had a Pharmac report come across my desk not long ago that showed, in the last five years, a significant growth in the inability of Maori and Pasifika to access the medicines they need. So it’s growing all the time, and that’s something that I think we need to turn around. We’ve seen rheumatic fever bounce back last year — up to 160 new cases in the past year, up from 141 the year before — so we’ve got to keep a lid on these things. These are things that shouldn’t exist in New Zealand in the way that they do now. We should have a first-world health system. We need good housing and so on to make sure that we are improving the quality of life for everybody, not just those who are well-off.
Given that you have said that that inequality is something that you simply can’t accept, I’m trying to understand your decisions. I understand that you are doing a review of Whanau Ora, but given the seriousness of the problem and the emphasis that you have put on it, how can you justify no cash injection for Whanau Ora and no new targeted funding for Pasifika?
Well, Whanau Ora sits outside my mandate.
But it crosses over into primary health.
Whanau Ora is having a fundamental review to make sure that the money is getting to where it’s supposed to be getting to. In terms of primary care, we’re taking steps in the interim; one of the big Budget initiatives was to make sure 540,000 more people with a Community Services Card could access cheaper doctors’ visits so that people can get the care early in community.
And health workers say, yeah, that is great, but here’s the thing — the promise was cheaper health visits, doctors’ visits, for everybody. So when will you fulfil that promise?
Well, the doctors tell us that actually there’s workforce planning issues — making sure you ramp up for that kind of change.
But that’s not why you didn’t do it, though.
We’ve got a primary sector review coming up as well. Making sure that we align everything is indeed why we push that out.
All right, so are you saying that it is a lack of GPs that stopped you giving cheaper visits to everyone?
No. One of the key things was listening to the clinicians who said, actually, we want the primary sector review findings on the table before you make those drastic changes, because it’s hard, then, to rearrange things.
But the key thing was money, wasn’t it, Minister? The key thing was money.
We’ve said that we wouldn’t achieve everything we promised in our first year. Absolutely that was a factor.
Okay, so when is the end date? When will you deliver that?
I’m not going to announce next year’s budget or the one after that on the show today, Lisa.
So, what would your equal health system look like, then? In your mind’s eye, what does this equal health system look like?
A more equal health system will ensure that Maori and Pasifika are getting the doctors’ visits that they need, that they are accessing health services, that health outcomes are vastly improved. I think we want to have a system where everyone can rely on having access to good health services and get good health outcomes.
So would you consider, for example, prioritising waiting lists for Maori in order to achieve that equality?
I think this is one of the things that the review should look at. I don’t want to be cute about that. But this is the kind of thing we do need to fundamentally look at — how do we achieve those health outcomes? It’s not that past governments haven’t tried, of any stripe, to try and achieve those outcomes.
Exactly. And they haven’t managed to, so…
That’s right. To me, this is a once-in-a-generation opportunity. We’ve had the same health system in place since the turn of the century. It’s one of the reasons I put my hand up to take on the role — is that we can actually have a proper look at things.
But are you seriously considering some options which some people might consider quite radical, like that — prioritising Maori on waiting lists?
That’s not explicitly in the terms of reference, but I would expect that review to consider every option. I really would. I would expect them to consider how do we get to better health outcomes? I’m not suggesting that that’s the solution, by any means; instinctively, it doesn’t feel like the right answer. But I’m not ruling anything out. I expect them to look at everything.
Okay, so if you want everyone to have equal access to primary care, let’s look at a specific example — Waipareira Trust says people in West Auckland are paying much more for after-hours doctors’ visits than people in South Auckland. Is that fair and equitable?
It doesn’t feel right to me, and I know that there are negotiations that happen with the DHB about how that care is delivered. Obviously, with the Community Services Card holder changes coming in, that will make things better for many people in that population.
Still not going to make it equitable. Even with the Community Services Card, South is getting cheaper after-hours visits than West. You say it doesn’t sound right to you. Well, are you going to do anything?
Well, we’re not going to solve everything in our first year, and not in our first budget. Taxpayers expect us to spend every dollar carefully, and that means not having knee-jerk responses to the many quirks in the system but actually doing a thorough review of the system and coming back with a solution that looks to the next 30 years, not just the next three.
Yes, but people have been waiting a very long time, and that sounds like postcode health. Waipareira Trust has been running a five-year campaign to try and get that changed. So, again, are you going to seriously look at that?
That is something I would expect to be seriously looked at, yes.
And you’re going to fix it?
In our primary care settings, we need to make sure that there is more equitable access to healthcare and more affordable access over time, absolutely.
So are they going to get the same subsidies as South Auckland?
Look, I wouldn’t get into the detail of that. How that’s achieved is currently up to the DHBs. And before we make any changes that might result from a review, we’re going to try and optimise the existing system. So we’re not taking the foot off the pedal, as it were. Taxpayers expect us to spend every dollar carefully, and we’re going to.
Well, in terms of that — spending every dollar carefully — can you see how this is kind of a false economy? Because the hospital out there, the Waitakere Hospital, was handing out vouchers in the last couple of weeks to people in their A&E to get them freebie visits to the doctor because they were turning up at the A&E. Who’s paying for those?
Well, yes. I mean, I probably should be congratulating the DHB on actually taking the initiative of making sure people do get the healthcare in the setting that they should get it in, rather than being critical.
But that’s not how it should work, is it?
It’s not how it should work, Lisa, and please don’t hear me saying that I think our health system is optimised yet. We do need to carefully look to the experts. It will be an expert panel that does this review, those people who are the big thinkers in the field, to make sure that we have the best possible settings for the future.
You’re the health minister; people are looking to you for answers, not answers that are deferred into the future. And everything seems to be under review.
Look, I am encouraged by the fact that the media and the opposition think that the health minister has all of the answers, but I think the public would accept that actually the clinicians and the people that access services need to be listened to too. And we need to, also, if we are going to make changes, we need to take those who will implement them on the journey. They need to have their say.
All right. I want to move through a few things quite quickly, because we’ve got a lot to cover. Middlemore Hospital in Counties Manukau — it was running at 170 per cent capacity at various points during last winter. What are you doing to make sure that that does not happen this winter?
We’ve set aside money in the budget for a range of capital projects. One of the big things we did in the budget was put $750 million aside. The previous government — the largest year they put aside was $450 million, and that was for Canterbury earthquake repairs. And part of that money is about capacity. Part of it’s remediation, part of it’s capacity, and part of it’s making sure we’ve got new models of care. So capital projects are a big issue for us. We’ve got to accept that we’ve got a growing population, and we're going to need more capacity in the system.
Yes, but it’s staffing, serious staffing issues, and that independent panel you set up into the nurses’ pay issue told you that as well. How many nurses short are you across all the DHBs?
Well, there’s not a set number on that, but what we have said is that we will put two per cent more nurses in. That’s part of the offer that the DHBs have made, which will be about 500 nurses across New Zealand in addition to what’s being offered in the pay settlement.
So you will do that regardless of whatever the pay settlement is?
That’s the offer that’s on the table, and I expect that’s the kind of change that will be needing to be made.
Yes. They are connected, though. They’re connected.
This is a part of a negotiation that I can’t conduct.
So put their wages to one side. Put the pay issue to one side. This is a recommendation that’s been made in that document, and it would come in if the deal was ratified. I’m asking you if you will give that extra two per cent regardless of the pay settlement.
Well, this government has stepped up and put an extra quarter of a billion in for that settlement. We are absolutely committed to addressing the concerns that nurses have raised with us, which include safety. And so this is the kind of thing we would be doing anyway, I think it’s fair to say.
So are those 500 nurses contingent on them signing the pay deal?
Look, I’m not negotiating the pay deal today, Lisa.
Because that’s what it sounds like.
This is something that we have listened to. We’ve said that health’s been underfunded for nine years, and we have stepped up and said we’ll put extra money in, and this is one of the things we’ve signalled we want to do.
All right. We’ve talked to a lot of people, and nurses are telling us that they are suffering anxiety, panic attacks because they are worried they’ll make fatal mistakes under these conditions. Are you prepared to take those risks with people’s lives?
Well, this is one of the reasons we’ve put that in the offer — the DHBs have put that in the offer — because I think it’s the kind of thing we should be doing anyway. I agree with you, Lisa.
So are you going to do it anyway?
I expect that, over time, we will be putting more nurses in, absolutely.
But are you going to put two per cent — which equals 500 more nurses — are you going to do it anyway?
I’m not going to negotiate the exact number in the deal today. In terms of the salary stuff, on the nurses’ website, there’s a calculator they can work out for themselves how much they’re going to get.
I said put the pay to one side. I’m not asking you to settle that deal. This is about staff numbers.
And in terms of the care, we have listened to the nurses, because I’ve heard the stories as an electorate MP of the nurses running, literally, in the hospitals, the outdated state of their equipment. We’ve got to put more nurses in there, absolutely, and that’s our intention. We’ve also got to make sure that the capital equipment is upgraded. We need a first-world health service, and whilst this review’s going on, we’re going to continue to invest.
Well, why can’t you commit to saying that you will do that — the 2 per cent and the 500 nurses? You’ve indicated to me that you think that this is a real issue, so why are you tagging it to the pay? Shouldn’t you be doing it anyway?
Well, look, as I said, I expect this is the kind of change that will happen in the coming period.
All right. There is about $619 million over four years tucked away in what is called ‘tagged contingencies’ in the Budget. Is that all you’ve got for the public sector pay increases, or is there another secret hidden stash somewhere?
There is money that is put away that is less obvious to see. We’ve obviously got negotiations around pay equity for mental health workers, we’ve got negotiations with the nurses, and we’ve got other things going on. So, when you’re in a negotiation, you don’t put those numbers out in the front for people to see. We have made provision for those kinds of things.
So there’s more money than the obvious pot there is what you’re saying. We’ve got more wiggle room.
There’s always ways governments can cut things differently. We’ve put our best offer on the table for the nurses’ settlement, and I’m not allowed to recommend that; that’s part of the way in which the system works. I’d encourage nurses to have a really good look at it, but if they don’t take it, then the DHBs will have to prepare for contingencies, which includes strike action, and I don’t think anyone wants that.
Very quickly before we go, how do you think that will look, with a Labour government, if you have nurses walking out the door on strike?
I don’t think anybody wants that. I really don’t. The offer that the nurses rejected previously was already more than the average offer under the previous government, and it’s nearly doubled since then, so I’m really hopeful that the nurses will have a really good look at that offer and consider their options seriously.
All right, Minister, thanks for joining us this morning.
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