A Fresh Start For The New Zealand Health Sector

MOVING FORWARD:
A FRESH START FOR THE NEW ZEALAND HEALTH SECTOR BASED ON A REGENERATIVE CULTURE OF PROFESSIONALISM

PAPER TO
AUSTRALIAN MEDICAL ASSOCIATION INDUSTRIAL COORDINATION MEETING

MELBOURNE 23-24 SEPTEMBER 2003

IAN POWELL

EXECUTIVE DIRECTOR

ASSOCIATION OF SALARIED MEDICAL SPECIALISTS

A feature of health systems is that periodically they reach certain cross-roads. This was the case in 1999 when a new Labour-led government was elected replacing the previous National-led governments of the 1990s. That cross-road was whether to make a significant break from the prevalent ideology of the 1990s in which market forces were considered the most effective driver of the health system, inclusive of its consequential perverse incentives when a universal public good is involved and excessive transaction costs.

The newly elected government stuck to its guns and the road was crossed at least in terms of its legislative framework. The public health system was no longer to be governed by the Commerce and Companies Acts. Potentially exciting developments were recognition of the importance of workforce development and planning and the role of statute based district health boards in assuming responsibility for primary care, in addition to secondary care, thereby creating a cooperative rather than commercial or privatisation framework relationship between the two sectors.

That is not to say there were not debates over the form of the DHB system. There are differing views over the value and effectiveness of elected members comprising part of the board membership. There are also differing views on the number of DHBs and whether some should be merged. These are, however, debates around the margins of the system. They do not go to the core of the system and do not address the key challenges currently facing it.

Four years later, despite several positive developments including longer term funding packages and a shift from time-limited to baseline funding, we are at another cross-road. This time the cross-road involves the culture of the health sector including its decision-making process and engagement of health professionals. For those working at the front-line of health delivery, and those organisations that endeavour to represent their interests, there has not been a general discernible difference or improvement in the culture of the sector compared with the 1990s. This has a compounding effect as the longer a negative culture remains in place the more embedded and entrenched it becomes.

The health system continues to function largely in crisis management and short-term modes of decision-making. The capacity to shift to a medium to longer-term approach has not yet been achieved even though the district health board system and various health strategies require such an approach. In the main, organisations that represent those in the workforce still consider themselves disenfranchised and having limited influence. The most decisive influence on the government through the Minister of Health is the Ministry of Health and DHB chairs whose regular, often daily, diet of advice has significantly greater influence than health professional organisations and is something that they are not able to compete with, despite the considerable accessibility of the Minister. The practical effect is that the most decisive influences on the government’s health policy and its implementation come from those who are most disconnected from health professionals, from their cultures and values, and from the practical experience of what works and what does not work.

The situation has been made more difficult by the recent experience of the passing of the Health Practitioners Competence Assurance Bill. This is the first time in living memory that legislation governing the registration and competence of medical practitioners has been passed contrary to the advice and despite the express opposition of the medical profession. And yet this extraordinary circumstance was avoidable. Much of the responsibility for this state of affairs rests with the Ministry of Health and the unfortunate way in which it conducted its consultation with the medical profession.

But it is not only the Ministry (and Minister) that has to look at their performance. So has the medical profession, which needs to evaluate not the robustness of its analysis and concerns, but the effectiveness of its ability to represent itself, how it articulated its arguments, how it engaged medical practitioners in the debate and discussion, and how it managed its own process of engagement with government at both a political and bureaucratic level.

In my view, had there been a sound relationship of trust and confidence between the Ministry and the medical profession, then with one important exception (elections to the registration bodies which was driven, in my view, by a dogmatic and incorrect position of the Minister), the unresolved concerns that caused so much angst would have been satisfactorily resolved. Instead we are left with the unpredictable outcome of a negative counter-productive effect on the relationship between those who significantly influence government policy and the medical profession, which compounded an existing level of distrust and suspicion that was already too prevalent.

Theoretical Construct: Bureaucratic and Generative Cultures

Professor James Reason provides a helpful theoretical construct in which this cross-road can be considered – organisational cultures (bureaucratic and generative). His construct is in the context of the handling of safety information but his key premises are also applicable to overall organisational (DHB) culture.

In summary, the differences between bureaucratic and generative cultures are:

 May not find out necessary information (bureaucratic culture) compared with actively seeking it (generative culture).

 Messengers are listened to if they arrive (bureaucratic) compared with training and rewarding messengers (generative).

 Responsibility is compartmentalised (bureaucratic) compared with sharing responsibility (generative).

 Failures lead to local repairs (bureaucratic) compared with failures leading to far-reaching reforms (generative).

 New ideas often present problems (bureaucratic) compared with new ideas being welcomed (generative).

Acknowledging that Professor Reason’s distinctions are more between ideal types and that one can often find elements of both within the same organisation, nevertheless, in general, bureaucratic cultures prevail in our DHBs. While this is not due to underpinning malign or pathological motivations, it significantly inhibits the ability and capacity of the DHB system to meet its considerable potential. This prevalent bureaucratic culture impedes and undermines the achievement of organisational effectiveness, fiscal responsibility and quality outcomes. The cross-road is whether the New Zealand DHB based health system continues down the bureaucratic culture path or shifts direction down the generative culture path.

Discussions on cross-roads in the health sector often involve funding and resource issues. But while these remain critical issues they do not of themselves adequately describe our present cross-road. I do not know whether our health system is overall adequately funded or under-funded. The most common international comparison is health spending as a proportion of Gross Domestic Product where, compared with other OECD nations New Zealand is somewhere in the middle, not bad but not flash or excessive. But I have never been fully comfortable with this comparison. If it was to be believed then the United States would have the best health system in the OECD but we know this to be nonsense once access and transaction costs are considered. This comparison does not sufficiently consider government initiatives that are health related but are provided in other areas of government spending such as housing.

But New Zealand does specialise in fiscal ineffectiveness. It is important therefore that the question of how to better enable effectiveness is considered. The sustained pressures that district health boards are subjected to force them down the track of short-term decision-making in a sector where the best and most effective decisions are made when done so on a medium to long-term basis. An evitable outcome of ‘short-termism’ is to resort to crisis management and short-sightedness at the expense of longer-term investment in human capital.

Pending Time Bombs

Another inevitable outcome is the creation and perpetuation of unresolved time bombs. These include:

 The extent of unmet need is unknown with significant implications, including fiscal, down the track for the health system. We know that many people have unmet needs in areas important to their health and safety but we do not know how many. We can reasonably anticipate that at some point in time many of these cases will turn up in some form, probably costing more than would have been the case if the unmet need had been met when it should have been. Denied or delayed care is not only unfair and inequitable care but often is also fiscally more costly care. Early intervention and prevention is safer and cheaper longer-term than delayed ‘ambulance at the bottom of the cliff’ measures.

 The lack of an aggressive nationally coordinated recruitment and retention strategy, inclusive of improved competitive employment conditions, causes excessive consequential reliance on the costly alternative of locum employment or other increased costs such as helicopter services. A distinct financially attractive ‘mini-labour market’ has emerged for locums who are well-placed to ‘call the shots’. We are failing to anticipate the effects of recruiting in a competitive international labour market and also to anticipate changing demographics in terms of increased interest in family friendly employment policies and the increased desire for relief from increasing workload pressures and stresses. These failures apply to both primary and secondary care.

 No effective nationally coordinated work has been done on the capacity needs of DHBs to provide patient and other health services. The benefits and enhanced effectiveness of integrated provision enabled by the DHB system have not been explored. This requires a pro-active approach but DHBs and their managements are so much on the back-foot and so guided by ‘short-termism’ that this is simply not happening.

 The high level of disharmony and distrust in the primary sector between medical organisations and the Ministry of Health is significantly undermining the ability to ensure that Primary Health Organisations become effective organisations facilitating better health delivery and outcomes. In fact, the consequential dysfunction and the failure to learn from the experience of the 1990s ‘market’ experiment is leading to the increased likelihood that PHOs will become another layer of bureaucracy. Even though DHBs could provide such functions, some Independent Practice Associations and other bodies are already promoting themselves as providers of management and financial services for PHOs. Reluctance to use DHB infrastructural support and resources for PHOs appears to be a short-sighted, inefficient and expensive reaction to the suspicions within primary care towards government and consequently DHBs, that arise out of this disharmony and distrust.

The most recent report of the Health Workforce Advisory Committee to the Minister of Health appears, correctly or otherwise, to work on the assumption that PHOs will be new additional bureaucracies. If the Committee is correct in its assumption, then not only is this an additional, duplicative and avoidable fiscal cost, but it also increases transaction costs and is contrary to the more integrative approach between primary and secondary care arising out of the DHB system.

Professionalism as the Means of Moving Forward

This leads to the question of how can effectiveness best be provided? The key issue is one of a working relationship of trust and confidence in which health professionals are actively engaged and empowered in decision-making that goes beyond the level of rhetoric. Too many DHBs believe, often genuinely, that they do a good job. Certainly some do a better job than others. But even among the better performers, once the surface is scratched, often a different picture emerges, sometimes with micro performance inconsistent with macro intent and sometimes dependent on benign management that can change overnight.

Central to enhancing effectiveness at a DHB level is the relationship between management and health professionals. Their respective contributions need to be understood. Management is an administrative overhead that does not of itself produce value in the health system. Management is most effective when it seeks to better facilitate the effectiveness and efficiency of the work of health professionals, for it is health professionals that produce and add value. Overwhelmingly it has been the initiatives of health professionals that keep the system going at times of adversity and stress and also health professionals who generate the improvements and innovations that lead to increased effectiveness, quality and productivity.

Management faces serious difficulties because of the overwhelming tendency to see their relationship through the paradigm of power relationships. Empowerment of health professionals therefore becomes an encroachment on the ‘rightful’ role and prerogative of management. Many managers have limited experience of what works and what does not work, especially those managers who are removed from operational matters. Management as an entity is compromised by the paradigm it operates in, the lack of an overall national strategy and professionally based culture for them to operate within, and the excessive level of continued poor performance by too many individuals.

This relationship between management and health professionals must be changed if we are to get effectiveness in the use of health spending. Health professionals are the most valuable but also most untapped resource that the health system has available to it. They do not need to be motivated; they do not require crude incentives such as performance bonuses. Their motivation and the benefits that flow from it comes from being allowed to do what their professionalism drives them to want to do.

This promotion of professionalism is not an argument for leaving health professionals to work in an unfettered environment. There is still a need for boundaries such as fiscal parameters and statutory codes of patient rights. But the environment should be sufficiently loosened and flexible for the benefits of professionalism to flourish.

Specific Ways of Moving Forward

There are several ways, many of which are inter-connected, in which the cross-road can be navigated based on a regenerative culture in our health system, and within our DHBs based on the empowering of professionalism. These include:

1. The Government, district health boards and the Council of Trade Unions, to which the ASMS is affiliated, have initiated a tripartite forum process which, if approached in the right way, has the potential to enable a far better contribution to policy-making than is presently the case. Some of the benefits might be more robust and practical national policies but, perhaps more important, stronger local bipartite (DHB-union) policy development. The potential gains are considerable but the risks are (a) DHB managers fearful of it encroaching upon their perceived prerogative, (b) the government seeing it as a means of silencing or sidetracking unions and (c) the cynicism among the workforce that has been steadily accumulating over the years derailing the capacity of health unions from effectively engaging in the process.

2. An assessment of the unmet need within the communities that make up New Zealand and the consequential development of a strategy, inclusive of implementation plan, to address it. This approach is consistent with the legislative requirement for DHBs to develop needs analyses of their communities. Given the relative small size of New Zealand this would best be handled by a nationally coordinated approach with a health professional based review body.

3. A nationally coordinated and health professional based taskforce, independent of both the Ministry of Health and DHBs, to examine the resource (personnel and non-personnel), organisational and delivery needs of the full range of services provided by and through DHBs. This work would be undertaken within a specified time-frame (eg, three years) and would include looking at improved effectiveness and alignment of services. The taskforce would be required to incrementally provide practical and specific recommendations for implementation to government during its time-frame rather than waiting until the end of the time frame before submitting a report. This approach is an adaptation of the taskforce review of metropolitan acute services in New South Wales that is currently underway. It could build upon or run along side work that is already underway in areas such as cancer services and child health. This, especially when linked to the assessment of unmet need discussed above, would provide the basis for rational planned and coordinated DHB capacity building and development for the provision of these services.

4. The question of workforce development and planning at the level of each DHB requires specific work and focus. This could be achieved by the ASMS and each DHB establishing joint workforce development taskforces to develop agreed staffing plans (including the support staffing levels and resources required to meet these objective needs), recruitment and retention strategies to support these staffing plans, and agreed plans for the effective provision of and access to high quality professional development and education for employees including continuing medical education, secondment and sabbatical. This activity should also be shared between DHBs on a nationally coordinated basis.

5. Encouraging and supporting activities designed to address the vocational needs of non-specialist doctors (and dentists) currently inappropriately known as medical (dental) officers of special scale. This is an under-utilised part of the medical workforce that could be much better utilised in terms of helping to meet workforce needs and ensuring quality of care. The College of General Practitioners has taken the initiative with the development of special interests (largely secondary care) based on a generalist training framework. This initiative deserves political and professional support and would go a long way to addressing concerns over the negative consequences of narrow scopes of practice under the new Health Practitioners Competence Assurance Act.

6. General practice offers a key foundation stone in helping address the staffing needs of our public hospitals, including but not confined to rural and provincial. Along similar lines to the above discussion about medical officers of special scale, general practice coupled with supplementary special interests may provide good quality generalist care that many of our secondary care settings would benefit from. It is an attractive prospect that fits in well with current government support for workforce planning and development and primary and secondary care integration.

We also need to look at general practice from the standpoint of primary care itself, much of which is provided and provided well by the self-employed small business model. But there are serious limitations and risks in relying on this model alone as the basis of providing primary care. Workforce shortages among GPs and the associated recruitment problems are already well-known in rural New Zealand but our cities are also not immune. Even in the cities we learn of GPs having difficulties selling their practices and some walking away from them. Studies confirm high stress levels among currently employed GPs. It is increasingly evident that many younger and aspiring GPs do not wish to purchase a practice. They just want to practice medicine. It is not just their high debt that is behind this attitude. Other factors include changing gender composition, desire for a family friendly work environment, hassles of running a small business and the problems in business partner relationships. I also suspect that many currently employed GPs would welcome the opportunity to leave behind these frustrations and consider salaried employment.

It is in this context that the government would do well to actively encourage and facilitate an alternative career path for GPs by providing as a voluntary option, salaried employment by DHBs. In addition to guaranteed predictable income, the non-salary benefits would also be invaluable (eg, CME, annual leave, sick leave). Failure to do this would lead to a failure to anticipate and adapt to the changing demographics and aspirations of general practitioners. This should only be considered as an option. Compulsion would be detrimental. But allowing two options for career development – the current small business model and salaried employee status – would provide flexibility in such a way as to better cater for today’s and tomorrow’s new GPs and to meet the workforce challenges confronting DHBs.

7. The development of professional based democratic and mandated models of clinical leadership within DHBs. The most effective clinical leadership in an organisation is that which is based on the mana and mandate of its peers. This includes, by whatever locally agreed means, some form of democratic election/selection. This approach should apply within DHBs to both clinical boards whose reporting functions include the boards, as well as chief executives. This recommended approach formed part of the report to the Minister of Health, Quality Improvement Strategy for Public Hospitals (September 2001) but which, unfortunately, gathers dusk in cyberspace. Aside from health professionals there is an absence of motivation to follow it through. There should be a nationally coordinated strategy to facilitate this ‘clinical democracy’ approach through at an individual DHB level and then to facilitate a sharing of experiences of its implementation.

8. The relationship between PHOs and DHBs needs further exploration and refinement. There is a high level of distrust between government, through the Ministry of Health, and general practitioners and this appears to be both hindering and shaping the development of PHOs and their relationship with DHBs which are in serious risk of becoming a new duplicative slice of bureaucracy. Serious consideration should be given, through the establishment of a health professional based review group, to the relationship between PHOs and DHBs inclusive of how to avoid unnecessary transaction costs and bureaucratic layers and how the existing infrastructure of DHBs could be utilised for the resourcing of PHOs.

9. The controversy over the Health Practitioners Competence Assurance Bill has further widened the gap and increased the relationship of distrust between the medical profession and the Ministry of Health. The Minister of Health deserves recognition, notwithstanding our strong and valid criticisms of the new legislation and the process of its enactment, for the very helpful comments she ensured were made for the public record on the intent of the new Act in the Third Reading phase of the parliamentary process, in particular reference to the importance of broad scopes of practice and the status of codes of ethics developed by health professions.

There are at least two further practical areas in which the Minister of Health could further help resolve the concerns. The first involves elections for registration bodies which she has the discretion to allow. It would give the medical profession a strong sense of reassurance and allay its fear of the politicisation of registration bodies if she were to exercise that discretion in favour of conducting elections at the time a new Medical Council is due for appointment. Elections are a stronger guarantee of protecting the health and safety of the public than political appointments. There is no good reason why, in fact, this discretion could not similarly be exercised for those professions where elections have previously been conducted (dentistry and pharmacy).

The second is the review process provided under the new Act. This review, under the auspices of the Director-General of Health, is wider than the matters that affect medical and dental practitioners. But it is important that this focus is not lost and also that the review is genuinely independent both in substance and perception. The Minister of Health should give serious consideration and seek to reach agreement with the ASMS, NZMA and NZ Dental Association over independent rigorous review processes which might be developed for medical and dental practitioners.

10. The relationship between the Ministry of Health and medical professions requires specific consideration. The controversy over the Health Practitioners Competence Assurance Bill was due in no small part to the poor quality of this relationship. While there will be differences between the Ministry and the profession over why this is so, the more important point is to recognise that it exists, that it is not good enough, and that an inevitable consequence of it is bad and unsatisfying policy-making processes. Both the Ministry and the medical profession have a responsibility to work together to develop first an improved attitudinal relationship, and second a framework and structure within which they can work together on matters of common policy concern in order to ensure the robustness and, as much as possible, the foundation of consensus between the Ministry and profession on this policy development. It will require the medical profession to put aside its cynicism and to be prepared to ‘give it a go’, but it will also require the Ministry to behave in a manner that makes it clear such cynicism is unmerited. An explicit political steer from the Minister of Health about the importance of the development of such an attitudinal relationship along with a framework and structure to give it practical effect would be a necessary prerequisite.

11. The relationship between the public and private sectors is a thorny issue. The public system is not necessarily eroded by the existence of a viable private sector; in fact, it can benefit from it. Two larger DHBs have made quite different decisions over the use of private hospitals. But, in both cases, these were pragmatic sensible decisions that were different because their respective circumstances were quite different. But there is also the capacity for decisions to be affected by camouflaged venal interests, naïve ideology, lack of consideration for the importance and benefits of capacity building in the public sector, lack of understanding of the true costs of contracting out, lack of appreciation of what is required to ensure the maintenance of standards of patient care, and short-term pressures without sufficient regard to the longer-term consequences.

Both the Government and the ASMS share a strong commitment to an accessible, universal and comprehensive public health service for New Zealanders. Publicly funded and publicly provided health systems are better placed than other systems to ensure that the public has such a service that is a universal public good rather than an optional commodity. Consequently, but in this context, there is merit in the Minister of Health convening a health professional based group to develop recommended guidelines for the relationship between the public and private sector, particularly the former’s use of the resources and facilities of the latter.

12. The Government, DHBs and senior doctors (and dentists) employed by DHBs would be best served by a multi-employer (national) collective agreement that is an effective tool for recruitment and retention, facilitates workforce development, is consistent with the values and culture of professionalism more so than managerialism, and provides a stimulant and framework for the future development of a strong collaborative relationship between senior doctors and senior management. The current negotiations which are made more difficult because they involve a transition from single to multi-DHB collective agreements are presently in a precarious and rocky phase. It is important that DHBs do not allow the inevitably higher and uneven costs of transition to obscure the longer-term advantages of a national collective agreement and the new culture that it can help facilitate.

The values and culture of professionalism are the most powerful resource that the Government and DHBs have. They have in their hands ready made motivation, skill, commitment and dedication. The challenge is to use it and to pick up from where the ASMS-Health Ministry hosted professionalism conference in April 2001 left off. Professionalism is the path by which bureaucratic cultures can transform or be regenerated into generative cultures. The cross-road currently facing the Government and the health system is whether this regeneration will happen.

Ian Powell

EXECUTIVE DIRECTOR

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