Assessing Integrated Care as a Solution for New Zealand

• Introduction
• What Currently Drives New Zealand Health Policy?
• Why Does One Particular Policy, Integration, Continue to Appear and Reappear as One of the Solutions to Problems in the New Zealand Health Sector?
• Has the Development of Integration in New Zealand Been Consistent with the New Zealand Integration Policy?
• Will New Zealand Discover and Use Lessons from Integration Initiatives to Form a Policy Future?
• Conclusion

Introduction

Integration is widely discussed as a solution to problems in the New Zealand health sector yet there is a continuing lack of clarity over the meaning, impact and implications of integration. Is it, or should it be, a major aspect of policy? What solution would it provide? Would it be a solution to the problems that have been commonly agreed as important? Is it an acceptable solution?

Before assessing integration of care as a solution, the question must be asked, “why did integration evolve as a key policy direction?” Why has the concept of “integration” held the attention of key policy makers in the New Zealand health sector for the past five years? Why have so many general practitioners, over the past five years, reorganised the way they practice medicine by integrating as Independent Practice Associations (IPAs) that currently or in the future will hold budget for GMS and other services? Why have many iwi Maori made integration a key strategic goal over the next five years?

New Zealand’s approach towards an integration policy raises a number of interesting questions about New Zealand’s health policy framework. After five years of reform where is New Zealand going with its publicly funded health sector? Are there particular current policies that offer an indication of future direction? Are there New Zealand experiences or experiences from elsewhere in the world that might inform future debate?

Exploration of the following questions creates the context for this paper.

What currently drives New Zealand health policy?

Why does one particular policy, integration, continue to appear and reappear as one of the solutions for problems in the New Zealand health sector?

Has the development of integration in New Zealand been consistent with the New Zealand integration policy?

Will New Zealand discover and use lessons from its own integration initiatives to form a policy future?

What Currently Drives New Zealand Health Policy?

The rapid pace of change in the structure of the health sector over the past five years sometimes gives the impression of policy chaos. Since the passage of the Area Health Boards Act in 1983, New Zealanders have witnessed the dissolution of hospital boards and the establishment of area health boards; the dissolution of area health boards and the establishment of regional purchasing authorities and crown health enterprises (CHEs); and the dissolution of the regional purchasing authorities and the establishment of a single funding authority and the re-establishment of hospitals from the nominal dissolution of crown health enterprises. Given these structural changes and the consequent cascade of new methods of service delivery and funding, trying to grasp the underlying motivation for change is not unreasonable. In fact, it could be argued that understanding the change process becomes critical to the stability of a government-sponsored health sector and the ability of that sector to secure the public’s confidence in its performance.

Finding an architectural blue print or plan would change what appears on the surface to be a series of ad hoc policy changes into a cohesive and coherent policy direction. Does one exist? There is some evidence of a plan beginning with the 1984 Treasury briefing paper to the incoming government.  ¹  

That paper described two fundamental problems with government’s role in the provision of health services. First, government expenditure on health was increasing without evidence of proportionate improvement in health status. Secondly, individuals did not have an incentive to change personal behaviours in ways that would reduce the risk of demand-driven services. The paper also highlighted the view that separating the funding of services from the delivery of services in a way that would promote competition amongst providers would lead to greater efficiency in the provision of service. A series of subsequent reports from Treasury  ^{2  ,   3}  as well as reports from the Taskforce on Hospital and Related Services  ⁴   and the Health Services Task Force  ⁵   provided further support for the problems and solutions set out in the 1984 Treasury paper. Similar problems and solutions were also being discussed at the same time in the British National Health Service.  ⁶  

What policy solutions did the underlying problems of cost-escalation, consumer lifestyle choice and system inefficiency drive? At the time, and, arguably, even today the solutions appear in numerous reports and policy recommendations as “managed competition”, “internal quasi-markets”, something called “managed care” and something else called “integrated care”.  ^{7  ,   8  ,   9  ,   10  ,   11}  

Why Does One Particular Policy, Integration, Continue to Appear and Reappear as One of the Solutions to Problems in the New Zealand Health Sector?

The introduction of managed competition and internal markets between 1991 and 1993 also introduced a question fundamental to the core principle of any publicly funded health system: what is the role of government in guaranteeing access to basic services that improve, restore and maintain health? Structural reform of the health sector is also a key indicator for measuring progress toward government reform in New Zealand; reform that has the primary goal of reducing the role of government and promoting the role of the individual.  ^{12  ,   13}  

Staying with an economist’s point of view helps shed light on why managed care or its variant, integrated care, became and continues to re-emerge as a preferred option for the policy makers driving New Zealand health policy. A review of the current integrated care policy shows it to be dependent upon two economic theories: public choice theory and agency theory. Public choice theory seeks to explain how public decisions about the allocation of resources are made through the political process and would argue that publicly provided services consume an excess portion of a country’s resources.  ^{14  ,   15}   Agency theory argues that contracts should form the basis of state provision of services and requires clear specification of responsibilities between a principle and an agent.

To illustrate the point, the New Zealand Health Funding Authority (HFA) offers the following definition and states the following objectives for their integration policy:  ¹⁶  

Integrated care is . . .a contracting strategy that [will] improve decision making about the method and mix of services to purchase by placing incentives in contracts with providers that will line up clinical decision making with [the following] HFA [policy] objectives:

• Ensure the best mix of health and disability support services by purchasing services on an outcome basis;
• Increase provider responsiveness to consumers, eg, by providing consumers with the ability to exercise choice; and
• Ensure the risks of increased demand and reduced utilisation are managed.

Another briefing paper written for the New Zealand Treasury provides further explanation:  ¹⁷  

Integrated care focuses on the allocation decisions made in health and disability support . . .[it] can make improvements in situations where the care options an individual receives are determined from an agent, or a series of uncoordinated agents, who do not consider all available options and who do not have incentives to select cost effective options.

. . .The concept is that a single agent will be responsible for the decisions as to the mix of services. . .and this agent will have the appropriate incentives placed upon them to ensure they make allocative decisions that are aligned with the [government’s] purchasing objectives.

With regard to its own capacity to make allocation decisions, the HFA further states:

The [HFA] is unable to make service decisions on an individual consumer level because the relevant information required for this decision making lies at the level of the health professional and the consumer. . . . It may be more appropriate for providers to determine the specific service levels and decide on the trade-offs between services.

Given the historic role of Treasury in the development of health policy and the almost singular focus on economic theory by many influential policy advisors and policy-makers (evidenced by over two years of documentation), it is easy to see why many believe that integrated care offers a policy solution to manage resource allocation and systematically devolve economic decision-making or rationing decisions to the providers of service. Its implementation would result in structural reform of the New Zealand public health system. Thus integration appears, at least on paper, a key public sector reform strategy initiated from central government.

Has the Development of Integration in New Zealand Been Consistent with the New Zealand Integration Policy?

Integrated care is and will be driven from the grassroots – not from the top down.

It starts with communities, consumers, and providers identifying unmet needs, and wanting to do a better job.

Hon Bill English
Minister of Health
New Zealand
20 November 1997  ¹⁸  


Linkages between different providers and professionals will connect organisations and regions in new and different ways, as providers form strategic alliances and networks to achieve responsive and high quality services in a dynamic environment.

Hon Jenny Shipley
Minister of Health
New Zealand
May 1996  ⁹  

From these two brief statements by two Ministers of Health the conclusion could be drawn that public choice and agency theory are possibly the furthest thing from their minds when describing integration in New Zealand. Further examination shows a peculiar dissonance between the integration policy on paper and actual integration initiatives in practice. The question arises, “why?".

In May 1998, the Ministry of Health completed a survey of 141 CHE initiatives of best practice in health.  ²⁰   A key word analysis of this report shows that 18 initiatives (13% of the initiatives) contain the words “integration” or “co-ordination” and “service” or “care”. As described in this report, for most CHEs “integration was about ensuring better co-ordination of services whether within the CHEs or with other providers. The impetus for integration related to access issues and achieving health gain.” The key points learned from the process of implementing an integration policy included:

• Trust takes time
• The first stage of integration is sharing information, knowledge and expertise
• Working out a method for power and risk sharing is important to avoid conflict among people and organisations
• No one model fits all – there is a need to recognise diversity.

A similar picture emerges from a review of initiatives reported from the divisions of the HFA prior to transition and consolidation.  ^{21  ,   22  ,   23}   The notable exception comes from the Central Division of the Transitional Health Authority (THA) whose the policy papers appear to focus on contracting, incentives, costs and the management of utilisation rather than service co-ordination, health outcomes and relationship development amongst providers and between providers and consumers.  ²⁴  

From this cursory survey it could be concluded that integration in practice is essentially related to people, relationships and services delivered to improve health. It does not appear, at least in the descriptive reports, that contracts, principles and agents and incentives to change consumer and provider behaviours play either a central or even minor role. However, both in practice and in theory there seems to be a striking absence of a framework for evaluating or comparing the options. This means that the proponents of any particular approach must make assertions and draw conclusions not from the evidence but from conjecture, speculation and possibly well-documented theory and then be reduced to argue positions of ideology, belief or vested interest.

A national programme currently underway may mark a move toward more evidence-based policy-making. Through a national demonstration process the HFA is testing eight integration hypotheses and evaluating the results.  ²⁵   This approach appears to be one of the first steps towards establishing a national process to evaluate policy on a small scale before restructuring the sector. The variety of initiatives and proposals should test many underlying assumptions about integration.

However, a rigorous evaluation research programme will be necessary not only to identify successful approaches for achieving integration but also to understand potential changes to the structure of the health sector and the potential political risks.  ²⁶   The absence of a rigorous evaluation research programme would mean the results of the demonstration projects would become speculative and anecdotal and, therefore, not adequately inform future policy direction.

The policy papers, politicians’ statements, and integration in practice show both the controversy and the ambiguity surrounding the integration policy. Where does this ambiguity and possible dissonance leave the New Zealand health sector and future policy direction?

Will New Zealand Discover and Use Lessons from Integration Initiatives to Form a Policy Future?

Returning to the question above regarding what drives New Zealand health policy, this paper argues that policy advisors and policy-makers that subscribe to economic theory have driven, and continue to drive, New Zealand health policy. Further, there is a dissonance between integration in practice, evidenced by the integration initiatives underway over the past two years and integration policy papers. Finally, both the theory and the practice of integration have suffered from a paucity of good information, which has created confusion because definitions and debates have been based in ideology and political position rather than fact. Perhaps the question is not about the future direction but rather about the process by which to set the direction.

Assessing integration as a solution for problems facing the New Zealand health sector means deciding the principles upon which to make that assessment. Those principles must be consistent not just with a particular policy or practice but with the core values of New Zealand society, take into consideration the values of the practitioners in the health sector, and be based in empirical evidence. Health policy development must draw on a number of different traditions, theoretical perspectives and disciplines including, for example, evaluation research, epidemiology, theories of medicine and health, social policy, information sciences, community development theory and ethics as well as economics.

New Zealand has many integration initiatives throughout the country to study and evaluate, which could inform future health policy development. The findings from all, or even some, of these evaluations could be used as a basis for making comparisons with other integration policy initiatives from around the world and could provide the evidence necessary to support any future changes in the structure of New Zealand’s health sector. Assessing integration as a policy solution for problems with the funding and delivery of health services in New Zealand means evaluating initiatives currently underway and using that information as the basis for a consultative process with the public about future directions. It also means balancing the different perspectives when explaining the future options to a public confused by the continual changes in the structure of the health sector.

Clarifying key national principles and goals for the public health sector would not necessarily result in Wellington prescribing changes or solutions to local communities and their service providers. For example, a public awareness campaign about the stages of national reform, the principles underlying the reforms and the goals that the Minister and the Ministry hope to achieve for the nation as a result of these reforms would define the debate for those interested in the issues. Making transparent what the Health Funding Authority actually purchases, as in the recent publication, What should I expect  ²⁸  , helps people understand how five years of sector reform affects their access to public health services. Showing how local initiatives enable national policy goals and how national policy, like integration support local innovation would open an important dialogue between national policy makers and communities, providers and local government.

Conclusion

To summarise some key points:

• If a single perspective, theory, philosophy or group of people drive a particular policy without strong empirical evidence, then that policy is founded on opinion and belief that may or may not be accepted by others. This will result in risk of dissonance between policy on paper and policy in action. The history of the integration policy suggests such dissonance.
• To minimise this risk, careful and rigorous evaluation must be undertaken to inform future policy.
• To ensure political acceptability, the evaluation process and information used from this process to inform future policy will need to be communicated, understood and accepted by most key stakeholders.
• Clarifying key national principles and goals for the public health sector would not necessarily result in Wellington prescribing solutions to problems in the health sector best dealt with at the local level.

In conclusion it is perhaps appropriate to reflect on the description by Weimer and Vining   ²⁷   of what represents good social policy:

The ultimate goal of public policy is to advance the substantive values that define the “good society”. Two realities, however, divert attention away from substantive values. First, public policy directly results from politics rather than philosophic reflection. Second, the consequences of policy can often be better predicted in terms of values related to, but not identical with, substantive values. The evaluation of policy alternatives often must be done in terms of values instrumental to the more fundamental values of concern.

References