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.
Since 2021 Pharmac has been given the responsibility for procuring medical devices bundled in 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.
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.
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.
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.