Covid-19 has highlighted how important access to high-quality healthcare and mental healthcare is for leading long and healthy lives. However, the status quo isn’t acceptable. Our hospitals are run down and people are languishing on waiting lists. ACT has real, positive solutions to reform our healthcare system.
ACT is committed to a modern healthcare system which empowers New Zealanders. We would ensure greater collaboration between the public and private sectors, make better use of technology, reduce bureaucracy and have a stronger focus on patient outcomes.
Independent review of Pharmac
- Seek an independent review of Pharmac’s operating model for greater transparency and timeliness in decision making, a more strategic focus, and a productivity perspective based on real lives.
There is no transparency and accountability in the way Pharmac performs its role. Unlike most OECD countries, we have no strategic perspective which would provide:
- Accelerated assessment and funding pathways to improve access to new, more advanced drugs that better balance budgets with personal and social good.
- Better health outcomes from a productivity focus on patient care.
The Pharmac model was set up in 1993 and there have been no material changes to it since then. Its purpose was to manage and restrain government spending on medicines and it did a good job, particularly in bulk buying mass use drugs and staying within its budget.
However, the world of medicines has changed, and a rapid flow of highly sophisticated, costly, new generation medicines is transforming healthcare outcomes. Pharmac’s strategy of sitting on applications until medicines are near the end of patent life is no longer workable, or fair on patients.
Spending on medicines is based on a Combined Pharmaceuticals Budget (CPB) which is negotiated between 20 DHBs and the Ministry of Health. It is bundled with the total Health and Disability Support Services allocation.
Despite that, the Simpson Review did not consider access to medicines even though it is a fundamental contributor to health and there is inequitable access to medicines for lower socioeconomic groups.
Pharmac uses a narrow, clinical cost-utility assessment rather than a cost-efficiency model in allocation decisions.
From 2021 onwards, Pharmac will be given the responsibility for procuring medical devices, which will be bundled with medicines, making the actual expenditure on drugs even harder to track. Pharmac expenditure for key community pharmaceuticals has declined over the past decade as a result of bundling.
Vote Health does not comply with the robust set of output classes developed by Treasury. With an approximately $1 billion spend on medicines, an appropriations process for pharmaceuticals, rather than non-transparent allocations by Pharmac, would be in line with Treasury guidelines.
The Ministry of Health’s Implementing Medicines NZ Plan (2015-2020) expires this year. It is no longer fit for purpose and there are currently no plans to review it.
A review of Pharmac’s operating model is timely. It should be conducted by a skilled, independent committee that includes public and private sector expertise. It should also review the viability of a medicines appropriations process.
A structural reorganisation of the public healthcare sector, as proposed by ACT, and a reduction in the number of DHBs, is aligned with shifting the decisions on pharmaceutical spending from DHBs to the Ministry of Health. This would allow for parliamentary scrutiny and greater accountability for patient-directed outcomes.
The final framework should link health technology and medicines assessment using a productivity perspective and allow the voice of patients to be considered in Pharmac’s decisions.
Government subsidies for private hospital elective surgeries
- Publicly subsidise more of the common elective surgeries in private hospitals through competitive tender. This will utilise spare private hospital operating capacity, reduce public waitlists, and free up public hospital operating theatres for urgent and major surgeries.
We have a backlog for elective surgery of 350,000 patients, of which one third, 110,000, are considered of mid-level urgency. The negative impacts of long waitlists – physical suffering, social impairment and the overall wellbeing of patients – is well-documented.
There are 170 private operating theatres as compared with 200 in the public sector. Private theatres are of a standard to perform most elective surgeries. In times of high caseload and excessive wait times, a small amount of elective surgery is already farmed out to private hospitals by District Health Boards (DHBs).
Publicly subsidising more elective surgeries in private hospitals will reduce overall per patient costs, significantly reduce elective surgery waitlists, and deliver better patient outcomes.
Improved primary healthcare in rural New Zealand
- Seek to attract more doctors and primary healthcare professionals under a new immigration policy and establish better pathways for training and accreditation.
Rural New Zealand is significantly under-resourced in terms of medical, midwifery and other healthcare services. This disadvantages vulnerable communities, particularly Māori, and results in higher mortality rates and poorer outcomes in these communities.
Primary healthcare is under-resourced and fragmented. Rural areas are significantly disadvantaged by a shortage of doctors, nurses and midwives. With more doctors working only part time, and a greater number facing retirement, there are growing issues in rural New Zealand primary healthcare.
New Zealand needs to attract a greater number of qualified migrants for the primary healthcare sector. ACT will ensure that government works with the Medical Council, College of General Practitioners and Medical Schools to ensure more efficient pre-evaluation of their qualifications and quicker pathways for upskilling.
Better integration of primary, secondary and community healthcare
- Reduce the number of DHBs from 20 to 6 (four in the North Island and two in the South Island).
Healthcare pathways are fragmented and variable. There is poor integration of primary and secondary healthcare in New Zealand under the DHB structure and this negatively impacts patient outcomes. General practice is under-resourced and is not well-integrated with broader community healthcare.
Secondary healthcare structures have excessive overheads, are highly bureaucratic, and focussed on spending more on organisational structures than on better patient care.
For a population of just five million, there are too many DHBs, each operating as a fiefdom. We will reduce the number of DHBs from 20 to 6.
We will also expand the charter of the PHO Agreement Amendment Protocol Group to include community-based NGOs so that there are fully integrated, streamlined pathways in patient care between primary, secondary and community healthcare providers.
ACT is committed to streamlining our bureaucratic healthcare system by reducing overheads, ensuring better integration of healthcare systems and providers, and focusing on patient outcomes.
National, fully integrated IT platform for procurement and supply chain
- Reduce the number of DHBs from 20 to six, establish a national IT platform for patient management, and tender the public healthcare procurement function for ten-year intervals under robust performance measurement.
There is no national, fully integrated IT across the public healthcare system. There are many IT and procurement conflicts between too many DHBs which is jeopardising patient care.
The non-PHARMAC part of the supply chain is fragmented, ineffective and costly as a result. New Zealanders deserve better.
The newly formed Crown entity, Health Partnerships NZ, is the latest organisation in a long line of failures to integrate the procurement processes for the 20 DHBs. It continues to use the legacy secondary healthcare model with the same conflicts and issues that its predecessors failed to resolve. The problem is too many DHBs, many of which have unsustainable debt, inadequate IT infrastructure, and the lack of a common national IT platform for their supply chain and procurement processes.
ACT will reduce the number of DHBs from 20 to six and privatise the procurement and supply chain for these consolidated DHBs, under competitive tender, as has been done in the UK.
We will establish a national, standardised ICT platform for patient data and management.
We will also tender to the private sector for supply chain procurement as has been done by the UK National Health Service and the New Zealand Ministry of Defence.
Private provision and leaseback of public hospitals
- Allow lease-back and build arrangements with large, reputable global infrastructure investment groups for the refurbishment of existing public healthcare infrastructure and the construction of new facilities. Such long-term leases would have the private lessor responsible for all build, maintenance and through-life utility costs.
The current build cost for a new 900-plus bed hospital is about $400 to $500 million. Most of the forty public hospitals in the country were built pre-1960 and are not fit-for-purpose in today’s healthcare environment. $14 billion will be required to repair and upgrade our current hospital assets. Maintaining over $20 billion worth of buildings and infrastructure is not the role of the Ministry of Health which needs to be focussed on medical enhancements and best practice patient care.
ACT would establish Public-Private Partnerships (PPP) with large, global infrastructure developers and investors for new build and long-term facility lease arrangements. PPPs would be used for the refurbishment and upgrades to existing facilities, and would be converted to long-term lease backs.
Mental health and addiction services
- Establish Mental Health and Addiction New Zealand (MHANZ), a standalone agency on a national scale, empowering patients to choose between a range of providers, rather than simply accepting what their DHB offers.
New Zealand is facing a mental health crisis. Each year, the government spends about $2 billion on mental health and addiction services. Yet, almost nobody is satisfied with the outcomes.
Our current mental health system is a disorderly mix of providers all struggling to provide a coordinated response. People who seek treatment describe a difficult-to-navigate bureaucracy, post code lotteries, and a lack of choice in services and resources to suit their individual and community needs.
MHANZ would not be a provider of services, but a world-class commissioning agency that assesses individual needs and contracts the best providers for a person’s therapy and care. It would put people at the heart of the system. It would be the one central interface for mental health and addiction funding, reducing bureaucracy and administrative burden.
ACT’s new approach to mental health and addiction will reduce bureaucracy, improve patient choice, and empower New Zealanders.
Read our mental health policy, Transforming mental health.
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