Major structural changes to health ruled out

Cartoon / Rod Emmerson

The government is focusing on increasing productivity in the health sector rather than major structural changes, Health Minister Tony Ryall says.

An Organisation for Economic Co-operation and Development (OECD) report yesterday identified New Zealand as the most indebted country in the group of 30 industrialised nations.

It said New Zealand productivity needed to improve and suggested policy changes to benefit business, a review of government ownership and singled out the health sector as being in need of drastic reforms.

The report criticised funding spent on increasing wages of doctors and nurses: "there is scant evidence as yet of much higher output or quality achieved".

It also suggested more competition between public hospitals and private providers, separating ownership and management of hospitals and privatisation of parts of ACC.

Mr Ryall said the government was already doing some of the actions recommended in the report such as encouraging greater collaboration between district health boards (DHBs), increasing the number of medical training places and getting better primary care cooperation at GP level.

But there were no plans for the major structural changes proposed.

"The Government made a commitment before the last election that we thought the real focus on health needs to be on improving front line services and so we are not committed and haven't planned any major structural change."

He agreed with the report's finding that New Zealand was getting a lower return on increased investment in health.

"The real challenge is...to lift productivity and service."

Mr Ryall said some DHBs had more autonomy than others - because they needed less intervention.

He said the DHBs all had to deliver a national level of service and there should not be dramatic regional variation.

Association of Salaried Medical Specialists executive director Ian Powell yesterday described the advice for improving the health sector as "ideological bonkers".

"The report advocates running the health system as if it was a commercial business forgetting that this was tried and failed in the 1990s," he said.

New Zealand was too small a country to have a health system based on competing units.

"We need collaboration and integration of services, not wasting time, effort and resources on competing against each other."

A proposal to break up national collective agreements was "bizarre" and made no practical sense, while claims about hospital efficiency and productivity were misleading, he said.

- NZPA