Costs mean decisions over the adoption of new medical technology and treatments will also be important. We simply cannot afford every medical advance going.
There is no doubt many recent advances in medical technology have resulted in better outcomes for patients - such as earlier, more precise diagnosis, faster recovery, and fewer complications. Examples include advances in cancer diagnosis and treatment, and improvements in the treatment of blocked coronary arteries.
Inthe Herald last week, cardiologist Dr Mark Webster called for an improved system to rigorously assess the clinical and cost effectiveness of adopting new medical technology.
An important fact shown in Dr Webster's article is that not all medical treatment methods stand the test of time, despite much excitement regarding their benefits. This point has been painfully highlighted by the recent recall of popular new hip replacement devices which were implanted into hundreds of New Zealanders before international data showed them to be faulty.
That is just one example of why there is an absolute need for robust evidence before a new technology is introduced.
Recent articles have been focused on funding decisions in the public sector. However, decisions over new technology are also important for private funders.
In the private sector, individuals are able to access treatments not available in public, and get them without waiting, at a convenient time and in a high-quality facility. But insurers such as Southern Cross must ensure any new medical technology has solid evidence to support any increase in cost for its 820,000 members.
In other industries, advances in technology usually reduce price. In healthcare, the opposite seems to occur. Healthcare costs have risen substantially over the past decade and "medical inflation" has greatly outstripped the consumer price index.
The development and adoption of new medical techniques and technologies have undoubtedly played a significant part in this unsustainable trend, which is showing little sign of abating.
Southern Cross doesn't believe New Zealanders should be asked to fund the higher costs of new technologies not yet proven to be better than tried-and-true conventional methods. Every additional dollar paid out in medical claims has an impact on its members' premium rates.
For this reason, Southern Cross canvasses the opinions of a broad range of medical experts, including medical representative bodies, and carefully assesses the cost and benefits of new technology. The aim is to only reimburse technologies that are clinically proven, effective, safe and provide benefit at an acceptable cost.
Many technologies meet this test - which means treatment options covered by health insurance policies are expanding all the time - but some do not.
An example is Southern Cross' position not to allow an extra 25 per cent charge for cataract surgery using new femtosecond laser technology. This technology has yet to prove it offers significantly better outcomes than current methods of cataract surgery.
Southern Cross funded 6200 cataract surgeries in the past 12 months at a total cost of $22.6 million - hence it is a big-ticket item.
All New Zealanders are paying for new medical technology, whether through health insurance, out of their own pockets, or through taxes. It's the job of funders such as Southern Cross and the Government to ensure only proven, cost-effective technologies are supported.
Each funder will have its own criteria and budget limitations, but it is essential as a country we get the best possible return out of every dollar invested.
Dr Justin Vaughan is head of clinical operations at Southern Cross Health Society.
