Deciding who will lose out from health board cost cutting

Cutting costs is never easy. ANDREW LAXON tries a hypothetical range of tough prescriptions.

Imagine you are chief executive of the biggest health board in the country. The operation you run is $72 million in the red - 9 per cent of your total budget.

As you contemplate scaling back your "First World" health services, you have four papers on your desk. Each offers a possible solution - and a furious backlash from patients, doctors and the public.

These are your options:

* You could dump plans for a $34 million children's heart unit at the Starship, which the Government has already returned with a "please reconsider" note.

Until now, cardiologists at Green Lane Hospital have got by using adult equipment on everyone. But they say every developed country is moving to separate children's facilities and warn of dire consequences if children must be rushed across the hospital into a resuscitation ward in the Starship.


* You could stop high-tech liver transplants for children under 7 and continue to send about six cases a year to Australia for treatment at $180,000 each. But you know how traumatic the trip is for families, and the idea may not save money anyway. Latest figures show that doing the transplants here would probably not cost more than sending children to Australia.


* You could refuse hip and knee replacements for anyone over 85. In theory, this would be a reasonable application of the principles of "prioritisation" (read: rationing) drawn up by endless Government agencies and committees.

Under this system in its purest form, doctors should consider how many years an operation would add to the patient's life. So a second hip replacement at $10,000 for an 85-year-old smoker with severe respiratory disease is likely to rank well below cancer treatment for a 5-year-old. From here it is a short step to no more expensive surgery for those with limited life expectancy.

You have your doubts about this one, remembering the case only five years ago of a 63-year-old Northland Maori, Rau Williams, who was dying of kidney failure. He was refused dialysis because he had moderate dementia and doctors believed he would not take his medication. They said dialysis might add a year at the most to his life. There was a national uproar.


* You could stop using the latest, most expensive drugs on cancer patients and go back to older, cheaper drugs which many doctors say do not work as well and have more severe side-effects. This sounds harsh but is already the case with most of the country's medicines.

Pharmac, the Government's drug buying agency, is perhaps the only part of the health system fully committed to rationing its scarce resources. It has refused to subsidise many new drugs because it says it cannot justify paying for them over existing treatments.

Even Glivec, the latest cancer wonder drug, may not be approved because it would cost $15 million a year but probably benefit only 200 leukaemia patients. You glance back at the soaring cost of cancer drugs at the Starship and ponder the fact that Pharmac is about to take over all hospital drug buying.


Of course, there is another rationing option, which avoids the need for such morally complex dilemmas. You could take the Government at its word and tell your hospital managers they should treat only the patients they have been paid for. The Starship tells you this would mean denying chemotherapy to large numbers of children with cancer.

You know this is never going to happen. But it certainly concentrates the minds of the new board members - and the Government in an election year.

nzherald.co.nz/hospitals