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This month’s edition of Healthcare Review – OnlineTM focusses on the New Zealand health sector in the new millennium.
Approaches to health care funding and delivery continue to be a subject for debate as New Zealand enters the new millennium.
In this edition, we present a summary of material presented at the Healthcare in the New Millennium seminar held in Wellington on 10 and 11 March, 2000.
The seminar was initiated and sponsored by Southern Cross Healthcare. Southern Cross Healthcare is a health insurer in New Zealand, the purchaser of health care services for its members, and the operator of a New Zealand-wide network of 13 modern surgical hospitals. As New Zealand’s largest consumer co-operative, it is owned entirely by its members with no outside shareholders.
Southern Cross operates in an environment where escalating demands for health services see 23% of health care funded by the private sector (private insurance contributes 6.2%), despite a reduction in numbers of people holding health insurance.
Against this background, Southern Cross is committed to playing a greater role in New Zealand’s overall health system. This commitment stretches far beyond the promotion and funding of a necessary private sector to complement public health services.
Southern Cross offers a co-operative approach to the new Government in New Zealand, which is dedicated to improving the severely stretched public sector health system, and as part of that process, to the establishment of District Health Boards (DHBs) to replace a centralised Health Funding Authority.
The seminar was undertaken to allow the new strategy to be examined and constructive comment to be offered by the wide range of talent and expertise within the Southern Cross organisation and the highly experienced individuals carefully selected to attend the seminar and its workshops.
The Southern Cross vision for New Zealand’s health care is one of greater integration of disparate funding streams, greater choice, and greater consumer power and responsibility. This was unveiled in specific but formative terms two years ago in Marlborough, with a model based on local management of centrally-based funding.
There is notable similarity between the proposed District Health Board concept and the model that Southern Cross and the Marlborough Healthcare Trust designed at that time. As part of that process, Southern Cross sponsored the Marlborough Health Forum which was tasked with identifying what Core Health Services could, and indeed should, be: part of a locally managed, centrally delegated, health plan.
While the outcome finally proved elusive, Southern Cross certainly succeeded in creating a greater awareness of the issues amongst a broad range of participants from both the public and private sectors of New Zealand health care. Many of these people had not ever had the opportunity to work together before, and had not previously been exposed to the moral, philosophical, and clinical thought processes associated with such challenging issues.
The Healthcare in the New Millennium seminar is a logical continuation of the process started in the Marlborough Forum, drawing on the ongoing spirit of camaraderie amongst those that participated in the Forum.
The seminar and workshops were well attended with around 65 attendees participating on day one and 40 on day two. Participants included representatives of the Ministry of Health, Treasury, CCMAU (Crown Companies Monitoring and Advisory Unit), the offices of the Prime Minister and the Minister of Health, Victoria University, GP organisations and private and public sector hospitals.
The seminar opened with a presentation from Dr Hylton LeGrice, Chairman of the Board, Southern Cross Healthcare, who summarised the background to and the objectives of the seminar and introduced the presenters.
Professor Alain Enthoven, the Marriner S Eccles Professor of Public and Private Management in the Graduate School of Business at Stanford University, was principal guest speaker at the seminar. He summarised the US experience with managed competition and considered the health reforms in the United Kingdom.
Dr Bruce Bowen, Executive Consultant, Kaiser Permanente, Oakland, California, is a risk management expert with experience in both the US and New Zealand markets. He addressed the issues of whether or not there is an evolutionary pathway forward for New Zealand, explaining the implications of fragmented funding streams in New Zealand.
Alex Sundakov, Director, New Zealand Institute of Economic Research, and Dr Pim Borren, Economic Consultant, Pim Borren and Associates, explained some of the key implications of the ‘dual’ (public and private) health system. Sundakov focussed on the ‘consumer’ perspective, covering his recent findings from a review of the health insurance industry. Borren considered the issue of cross-subsidisation of specialist remuneration, explaining the results of his research in this area.
The four presentations summarised above provided the context to the seminar workshops. Mr Philip Davies, Deputy Director General of Policy, Ministry of Health, introduced the workshops by summarising the new structure of the health system and some of the key issues emerging within the new environment.
The workshops aimed to review the new health care infrastructure, specifically the District Health Boards. The new District Health Boards are intended to resolve health issues at a local level and the workshops were undertaken to explore the implications and opportunities arising from these new Boards, including better co-ordination between the public and the private health sectors.
Betty-Ann Bird, General Manager - Integrated Solutions, IntraHealth, and Mark Matthews, Chief Executive Officer, IntraHealth, facilitated the workshops. The output from the workshops will be distributed by Southern Cross and will also be available on this web site over the next few weeks.
Professor Alain C Enthoven
>> Click here to view the summary of Professor Enthoven’s presentation
Professor Alain C Enthoven is the Marriner S. Eccles Professor of Public and Private Management in the Graduate School of Business at Stanford University. He holds degrees in Economics from Stanford, Oxford and MIT. The positions he has held include Economist with the RAND Corporation, Assistant Secretary of Defense, and President of Litton Medical Products.
In 1963, he received the President’s Award for Distinguished Federal Civilian Service from John F Kennedy. In 1977, while serving as a consultant to DHHS Secretary Califano and the Carter Administration, he designed and proposed Consumer Choice Health Plan, a plan for universal health insurance based on managed competition in the private sector.
He is a member of the Institute of Medicine of the National Academy of Sciences and a fellow of the American Academy of Arts and Sciences. He is a consultant to Kaiser Permanente, the former Chairman of the Health Benefits Advisory Council for CalPERS, the California State employees’ medical and hospital care plans, and former Chairman of Stanford’s University Committee on Faculty/Staff Benefits. He has been a director of the Jackson Hole Group and PCS. He is now a director of Caresoft.com. He was the 1994 winner of the Baxter Prize for Health Services Research and also the 1995 Board of Directors Award, Healthcare Financial Management Association.
In 1997 he was appointed as the Chairman of the California Managed Health Care Improvement Task Force by Governor Pete Wilson. Commissioned by the state legislature, the Task Force has addressed healthcare issues raised by managed care to aid in policy decisions. In 1998–99, he was the Rock Carling Fellow of the Nuffield Trust of London and also Visiting Professor at the London School of Hygiene and Tropical Medicine. His latest book is In Pursuit of an Improving National Health Service, published by the Nuffield Trust in November 1999.
>> Click here to view the summary of Professor Enthoven’s presentation
