Annette King: Address to NZ Private Hospitals Association Seminar

Thank you very much for inviting me to speak to you today. I am always pleased to have the opportunity to talk with people who are committed to delivering high quality health and disability services, but I was very keen to do so today for another reason as well.

I think it is time to clear up some of the misunderstandings that are occurring because of the misleading spin of some people. This Government is not opposed to public-private partnerships in health. I have told you that often enough before, and I have said it publicly as well, but somehow the point does not seem to get through to some of this Government’s critics.

They certainly don’t seem to recognise current examples of public-private collaboration ---- collaboration being the key word. I know your organisation accepts in good faith the Government’s commitment to public-private partnerships, and I want to reassure you that this commitment does extend to District Health Boards as well. The key criteria, as far as this Government is concerned, is that all public private partnerships must be based on enhancing services for public patients. That is why in 2000 I obtained cabinet support for the protocols DHBs must use in their relationship with private providers. I would like to remind you what those protocols say.

For a DHB to be directly involved in providing privately-funded services, or Public-Private Partnerships, there must be a direct benefit to public patients. The private involvement must lead to an improvement in the clinical quality or the efficiency of a service for public patients.

Before treating private patients, a board must ensure that there is a residual capacity after serving public patients, and providing an adequate level of publicly funded service. Proposals for involvement in privately-funded service provision need to be included in the Board’s strategic and annual plans, which must be approved by the Ministers of Health and Finance.

Patients must be advised of publicly funded options before choosing to pay for treatment in public facilities.

Because of the level of private delivery in many service areas, DHBs have a degree of flexibility to work with private providers to ensure the Government’s strategic health goals.

In some regions, it may be more efficient for Boards to contract with private hospitals to take patients at peak times, or for particular surgical procedures to be undertaken privately because the Board may not have sufficient patients and clinical staff to offer all procedures.

As long as Boards adhere to the Protocols, I am keen to encourage such partnerships and innovative solutions.

Many people don’t actually realise the extent of public-private partnerships in New Zealand.

The public share of health spending peaked in the early 1980s at 88 percent, dropped off in the 1990s, and climbed again to 76.7 percent in 2000-01.

The amount of private spending in developed countries with predominantly publicly-funded health systems varies considerably. The fact is that there is no ‘right’ level of public funding, but the key is collaboration between the sectors to make the best use of all our resources.

Of course there will always be policy dilemmas associated with the role the private sector has in a country like New Zealand, but governments need to take a flexible approach while retaining the key role leading the public health sector.

I have no doubt about the important benefits of public-private partnerships, including the reality that they help to ensure that health professionals have sufficient work to maintain their competency levels without compromising ethics.

But I am sure you understand that competition between the two sectors can impede the public sector.

That is why I am concerned that some individuals are trying to misrepresent the debate on public/private partnerships.

A recent example was the disgracefully distorted interpretation of Wellington cardiac surgery waiting list figures.

I was concerned with the effect such distortions could have on the peace of mind of patients, and certainly such tactics do nothing to promote sensible and effective relationships between the two sectors.

One point that did emerge out of the mass of misinformation, however, is the need for those who gain financially in either sector to look at the ethics of manoeuvres to advantage one sector over the other. I have asked the Ministry of Health to follow up on this important issue.

We need to maximise the capacity we have in this country, particularly in provision of hospital services. This country is too small to have private hospitals competing with public hospitals for piecework.

The Government has been encouraging DHBs to look at sustainable, longer-term partnerships, such as Auckland DHB utilising the capacity and excellent facilities at Birthcare Auckland Ltd instead of adding on more beds itself.

Waitemata DHB, however, did not need to avail itself of that company’s services because it recently opened new multi-million dollar facilities of its own, and has the capacity to provide services in-house.

Another good example of a public/private partnership is at Thames Hospital. A private company provides CAT scanning services within the public hospital, so public and private patients do not have to travel to Hamilton for services.

And last year I opened the Endosurgical Training Fellowship in Gynaecology at the Oxford Clinic in Christchurch. This Fellowship is a model for how to use private sector resources for clinical training. By tapping into private sector resources, benefits accrue for patients in both sectors through producing better-qualified specialists.

The development of such services shows how ludicrous it is to suggest this Government is anti-private health providers. While around 77 percent of funding for health services comes from the public purse, more than 50 percent of provision is in the not-for-profit and private sector.

One sector that will see a growth in non-government providers of services is mental health.

The Mental Health Commission Blueprint indicates the greatest need is for community-based services. I have no doubt that there will be more non-government sector involvement in mental health than ever before. This is appropriate and welcome.

Long-term residential care for elderly people has increasingly moved to NGO and private sector provision in New Zealand since 1961 with the introduction of rest home subsidies.

Critics of the New Zealand public health system need to take on board a big dose of reality. There is only so much that the health system can provide, and it will consume 21 percent of all Government spending next year.

Health spending is actually growing faster than GDP, but still the demand grows because of greater public expectations of what health systems can provide and because of new drugs and new techniques, such as the use of gene technology to detect our susceptibility to certain cancers.

The area in which the public and private sectors need to develop their closest partnership is in primary health care.

I am convinced that the most effective way to improve the health of New Zealanders is through making primary health care more accessible and affordable for all New Zealanders.

Since 1991 primary health care has been predominantly privately funded as most New Zealanders have had to pay for a doctor’s visit from their own funds, but this Government recognises that the public sector must contribute more funding too.

That is why we have committed more than $400 million in new money over this and the next two financial years to begin implementing the Primary Health Care Strategy, particularly through developing Primary Health Organisations.

New Zealand has to maximise every health resource it has in human and financial terms. The private sector is very much part of that equation.

New Zealand is, in fact, a world leader in terms of developing public-private partnerships in health.

The first International Forum on Common Access to Healthcare Services, founded by New Zealand and Sweden last year, was held in Stockholm in late January this year.

The second full meeting of the forum, which now also includes the United Kingdom, Germany, Greece, Chile, Slovenia and Canada, will be held in New Zealand early next year. It is expected other countries will have joined the forum by then.

One of the key areas of common concern for the countries, which all have a commitment to strong public health systems, is the way public and private health sectors can work together for the common good.

We are all doing it in different ways, some more successfully than others, and some depending more on one sector than on the other.

We have much that we can learn from each other. I know, from the preliminary discussions in Stockholm, that the other countries can benefit from learning more about some of the public-private partnerships we have in place in New Zealand, and I will certainly be following the developments in other member countries with interest.

All the member countries are engaged in a strong debate that can only be called ‘healthy’ in the best sense of the word, and I look forward to the positive contributions your association can make to this debate.

Thank you again for inviting me to speak today. I enjoy our continuing dialogue.

© Scoop Media