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Editorial - Vol 2, No 1:  Integrating Purchasing and Integrating Care

Friday, August 1st, 1997

This edition of Healthcare Review – OnlineTM contains an article of particular importance to the health sector, focussing on issues of integration outlined by Dr Graeme Scott, Chairman of the Transitional Health Authority. It is based on an address given to the joint conference of the New Zealand Institute of Health Management and the New Zealand Hospitals Association, held in Rotorua from 1-3 September 1997.

Integration is one of the most discussed strategies within health care policy today, and there are high expectations of what might be delivered. However, there remains little agreement on what are realistic objectives and how these might be achieved. Consequently there is a risk of failure, which is potentially avoidable if it is ensured that the strategies proposed address the issues critical to improved management of health. These issues are not always easy to identify clearly, hidden as they frequently are within the complexities of the culture and structure of the health system.

The article is significant because it begins to make explicit the reality of these hidden issues and outlines how these are to be tackled. A process not frequently associated with recent health leaders, and one which should give us hope.

Repeated reference is made to the challenge of the change process, and it should be recognised that there is no simple panacea to the effort required to develop new relationships and new patterns of work, particularly where these affect organisational viability. It is frequently easier to see the threats in this process, than the opportunities.

Explicit reference is made to the need for rationing, driven by a finite budget, yet growth in costs for crown health enterprise based services and pharmaceuticals which exceed the allocated funding. This situation is unsustainable and must be addressed in a way which allows the available resources to be allocated efficiently, effectively and appropriately and in a manner which maximises the health of the population while recognising individual needs.

Integrating care is identified as one of the most promising developments in contracting, both nationally and internationally, although it is accepted that the impacts and gains have not been fully evaluated and further work is required.

There are a number of aspects which should sound a note of caution and require further exploration. The paper identifies the significant pressure on short term financing very clearly. Even the limited experience which exists within the New Zealand sector has demonstrated that integration is a medium term strategy and unlikely to impact positively in the short term. Indeed the financial situation may even worsen driven by increased requirements for investment in infrastructure on which successful integration is critically dependent.

The sector needs to be open and transparent about the realities it faces. If the real and unavoidable priority is to control expenditure to a sustainable level, then the strategies required may more closely resemble those of managed care in the USA. It would be a legitimate expectation of the public, including those working in the sector, to have the implications explained to them, and to be allowed to participate in the rationing process which follows.

It is critical at this time that the health sector makes the key issues it faces explicit, so these can be debated and imperatives agreed. Appropriate strategies can then be determined.

Integration promises the delivery of quality care which better addresses health needs through the co-ordination of purchaser and provider activities. It should be both efficient and effective, but will not be the lowest cost delivery option. It would be a tragedy if integration were to be pursued when a more short term, resource focussed strategy is required, and consequently be branded a failure.

Integration is critical to the development of a New Zealand health care system which can address needs and deliver quality care efficiently and effectively. We may only get one chance at its introduction, so when it is decided to be the strategy to follow, we should make sure of its success.