Workshop Report

1. How should local health systems be structured to facilitate integration and avoid bias towards primary or secondary sectors in favour of the most efficient use of resources?
2. What is the correct mix of centralisation of capabilities (to achieve scale) versus decentralisation (to recognise local need) of funding/purchasing capabilities?
3. How should the private and third (charitable) sectors relate to the public environment to ensure equity of access and clarity of roles and responsibilities?
4. Should there be an explicit description of expectations and benefits for the "state" health plan to achieve transparency? What criteria might be used? [Not addressed].
5. To what extent should local needs and preferences determine resource allocation? How can this be achieved without removing national consistency?
6. What new skill sets will be required? How might these requirements affect national and regional labour resource planning? How will new competencies be transferred to the DHBs? [Replaced – see below].

During the first seminar day, participants were invited to "sign-up" for a topic with the objective of forming six groups, each addressing one of the questions. There were insufficient numbers for question 4 and 6; therefore an additional question was added (taken directly from the presentation by Bruce Bowen):

Who is responsible for the quality of care? How will it be monitored? What data will be collected?

Each group addressed the following in relation to their issue:

• Discuss the major concerns that are associated with your issue.
• What are the opportunities in relation to your issue?
• What strategies could you put in place to capitalise on each opportunity?
• What are the barriers for the DHBs in relation to your issue?

The groups recorded their comments on the worksheets provided and presented them back to the wider group the following morning. The other participants were free to raise questions with the group. Professor Alain Enthoven and Dr Bruce Bowen provided concluding comments.

Key Themes from the Workshops

In relation to the opinions of the group, it would be inappropriate to infer that there was agreement that District Health Board structures were the best model (in their current form) for New Zealand.

The question of alternative structures was not fully discussed, neither was the issue of the sequence of the change process, ie should strategy follow structure or vice versa. Therefore, the group focussed on the assumption that DHBs would be implemented and discussed issues that would influence their successful implementation. However, the group struggled to maintain a focus on implementation, raising some concerns about both the structure and strategy.

• A key theme to emerge was the concern that a combination of central (Ministry of Health) and local purchasing of health services (DHBs) would not resolve the issue of ’fragmentation’ in the funding of public sector health services and therefore create a series of downstream impacts, eg, conflict in resource allocation, inability to effectively manage ’total’ health risk etc.
• The combination of the purchaser/provider function within the DHB (through its linkage with the Hospital and Health Services [HHSs]) was thought to create the potential for a serious conflict of interest to occur and was a contrary strategy to the "internal market" principles illustrated in Professor Enthoven’s presentation on the NHS.
  However, the current Government strategy suggests a move away from a focus on the commercial drivers within the health sector. Therefore, the question that arises is, "if market mechanisms are not available to drive performance in the health sector, what other mechanisms are available"? (eg, heirachics, direction, structure, share values etc).
• A general concern was expressed about the speed of the proposed health care reform programme. The feeling was that there needs to be a clear "transitional" plan as the DHBs are established.
• Another concern was the lack of incentives for health service integration, eg, primary/secondary services. The feeling was that the DHBs would need to work very hard to achieve service integration (given the combined purchaser/provider function).
• There was general agreement that strategies were required to avoid duplication of efforts so that resources could be best utilised and an appropriate level of standardisation encouraged throughout the health sector. Ideas included:
  • combining multiple HHS’s into one DHB;
  • industry standards for data collection and measurement;
  • clear performance measures;
  • common services, eg, contracting, "needs" assessment, information systems, etc.
• The DHBs would need a clear mandate from Government and strong leadership in order to be effective. Effective management practices would be a critical success factor.
• The issue of comprehensive, effective data collection and measurement was a recurring theme throughout the presentations and workshop. It was seen as a ’critical’ requirement considering the ’"lack of integrated health care information currently available."
• Effective partnerships were seen as one of the key enablers for success for the DHBs. This included providers (particularly primary care), neighbouring DHBs, the private sector, service providers, the community at large, etc.

Workshop Exercise

(1) ADMINISTRATION/BUSINESS

(2) PURCHASING OR SERVICES

(3) FUNDING - ASSESSMENT OF NEEDS AND RISK

Concluding Comments

Following the workshop feedback sessions, Professor Alain Enthoven and Dr Bruce Bowen were invited to provide some concluding observations. The following summarises those comments and provides some final observations from Roger Bowie, Chief Executive, Southern Cross Healthcare.

Professor Alain Enthoven
Alain offered some personal reactions to the discussions over the two day seminar, while clearly indicating that he felt that he would need more time to understand the New Zealand health system in order to provide a constructive commentary on the possible solutions for New Zealand.

His observations were, in summary:

• Creating a unified flow of health care funds for defined groups of patients such as a town or a district seems to be a worthwhile objective in New Zealand. The current fragmented health care funding appears to be an impediment to rational economic planning and management. Ring-fencing of the health care budgets will not help the system to improve
• An option to consider is the undertaking of demonstration projects to unify funding streams and measure the outcomes.
• The whole health system needs to develop uniform data systems. These should include hospital discharge and physician encounter databases. Prescription data is also a rich source of information on diseases.
• Undertake other forms of measurement such as patient satisfaction surveys. Alain has two quality related questions that he likes to see included in these patient surveys, following surgery;
  • "Did the surgery achieve the outcome that you expected?” (six months after treatment)
  • "Did you acquire any injuries or illnesses while you were in hospital?”
• In the United States, quality is being measured through risk adjusted mortality studies and also the Healthplan Employer Data Information Set (HEDIS).
• We should also explore the opportunity to link databases in order to understand more about health care systems performance. For example linking the Social Security database to the Health Sector database – is this possible?
• Explore paying hospitals in different ways to reward the right behaviours. For example, paying hospitals a fixed payment per case depending on the DRG (Diagnosis Related Group) encourages productivity and also accurate timely data reporting. Study the variations in performance and practices between hospitals.
• Patient confidentiality in relation to data. Challenge the notion that all patient data needs to be held between the patient and doctor. Whose interests are being protected?
• Alain concluded by recommending that all health care data be made widely available to researchers and others, with patient identification removed. This would encourage transparency and foster a clearer understanding of the real issues in the health sector.

Dr Bruce Bowen
After completing a series of projects for Southern Cross Healthcare and the HFA in early 1999, Bruce has returned to the United States. He has maintained a focus on the proposed health sector strategy through his various contacts within New Zealand. His comments are, therefore, based upon his knowledge of the previous environment and observations made over the duration of the seminar.

• Confusion still reigns in the health sector; however, some things are becoming a little clearer.
• There is pragmatism emerging in relation to the health sector changes. A mood that suggests, "well, here it is, now let’s get on with it”.
• The core services have not yet been defined and need to be.
• There is still a lack of definition between public and private sectors.
• The biggest opportunity in the new environment appears to be the ‘co-ordination of care’.
• Focus on the issue of data collection and management. Look at various sources including:
  • Diagnosis related information.
  • Prescription data is easy to collect and if the NHI is included in the prescription data then it can be matched to other data sources.
  • Focus on both public and private hospital data.
• Be aware of some of the nasty little issues that could create problems. For example "cross-border” issues between DHBs and the way that the population-based funding formula works.

Rober Bowie, Chief Executive, Southern Cross Healthcare
Southern Cross’ view remains that the best way to improve the New Zealand health sector is to completely re-think the dual health system and create a model that integrates the health care funding streams and health care delivery processes, whilst maintaining choice for consumers and clearly defined areas of contestability between providers (both "insurers” and health care providers). This is exactly the model Southern Cross were seeking to create in the Marlborough Health Forum (the Marlborough Health Forum was tasked with identifying what Core Health Services could, and indeed should, be: part of a locally managed, centrally delegated, health plan).

Southern Cross endorses Bruce Bowen’s suggestion that integrated delivery should be worked on initially because the integration of funding seems difficult for this Government to contemplate, understanding that its sense of priority is confined to the public sector. We do, however, support any moves that seek to integrate funding within the public sector, ie, primary/secondary etc.

If full integration is not possible in the short to medium term, Southern Cross believes we can at least concentrate on integration of people and ideas. This forum is one such example.

With regard to integrated funding and delivery, the essential pre-condition is a minimum dataset across both sectors. We are encouraged by, and continue to support the efforts being made within the sectors to collect, integrate and analyse health care information, eg, Health Funds Association of NZ, industry data collection, public and private sectors contribution to the health sector intranet.

References

1. intraHealth is a health care information tehcnology and consultancy company, specialising in the development of practice management software.