Prioritising Health Care in New Zealand

Levels of Prioritisation

Central Government
The highest level of health care resource prioritisation occurs at the level of central government, which decides the size of the health and disability budget, ie, Vote: Health. In practice, it is Cabinet that decides on the relative size of Vote: Health. In doing so, Cabinet must consider what the country can afford and weigh up competing priorities across all areas of government expenditure. The government must also be cognisant of its responsibility to Maori under the Treaty of Waitangi. Changes tend to be incremental and occur largely through the Budget process.

There is now good evidence that the principal determinants of health are social, economic and cultural factors.  ²   Therefore, from a health perspective, it is important that the government funds areas such as education, social welfare and housing; expenditure in these areas can have major benefits for health. Government money also goes to other areas that are directly related to health, for example, road traffic injury prevention is part of both transport and law and order budgets.

A tangible example relevant to communicable disease relates to concern in recent years about overcrowded housing conditions in some communities in New Zealand. Many of the diseases that contribute to New Zealand’s high burden of communicable disease are associated with overcrowding – tuberculosis, meningococcal disease and respiratory infections. Government spending on housing might arguably be of more value in preventing communicable disease than further expenditure on health education and promotion campaigns.

Having determined the size of Vote: Health, government also sets "ringfences" around money earmarked for personal health, mental health, public health and disability support services. Again, changes to the size of these different pools of money tend to be incremental, but their relative size does send a signal as to where the government’s priorities lie. For example, expenditure on public health activities in New Zealand is about 1.7% of Vote: Health,  ³   which is relatively low by international standards. Given that most communicable disease surveillance and control falls within this area, relatively low expenditure on public health lends some support to the assertion of a lack of resources for these activities.

The government may also identify, through the Crown Statement of Objectives (CSOs), high priority areas such as child health and Maori health. The priorities identified in the CSOs are subsequently reflected in the funding agreement between the Health Funding Authority (HFA) and the Minister of Health, and eventually percolate through to the actual services purchased by the HFA at the local level.

Central Organisations
There are four central organisations that have a role in priority setting; the Ministry of the Health, the HFA, Pharmac and the National Health Committee (NHC).

The Ministry of Health (the Ministry) is the principal source of advice to the government on health spending priorities. The Ministry is responsible for co-ordinating annual budget bids for extra spending on health. In addition, the Ministry advises on how health spending should be allocated to different areas of New Zealand. This is achieved principally through a population-based funding formula (PBFF) which takes account of age, ethnicity, wealth/income and remote location. Historically, there has been a South–North gradient in per capita health expenditure, with higher per person expenditure on people living in the South Island. Over the past few years, there has been a gradual northerly shift of resources to rectify this historic imbalance.

The Ministry’s ability to determine priority areas for health and disability service spending is dependent on its ability to monitor the state of public health. Recent publications have confirmed significant socio-economic and ethnic inequalities in health.  ^{4  ,   5}   Communicable diseases contribute significantly to the excess burden of illness in Maori, Pacific Island people and people in low socioeconomic groups. For example, rheumatic fever and meningococcal meningitis are particular problems for Maori and Pacific Island children.  ^{6  ,   7}   Given the high priority accorded to improving health in these groups, there is a good argument for awarding a high priority to resources for the prevention and control of communicable disease.

The HFA directly funds or purchases health and disability services for New Zealanders. Given the need to ensure the right balance and mix of services are purchased, much of the work of the HFA is predicated on prioritisation.

This does not mean that the HFA starts the prioritisation process from scratch each year. The HFA must purchase services in accordance with its Funding Agreement with the Minister of Health, which reflects the priorities identified in the CSOs. In reality, only a relatively small proportion of the overall HFA budget is discretionary and therefore truly available to be prioritised. Most resource prioritisation occurs at the margins, in particular in deciding how to spend "new" money.

The process of deciding the right balance and mix of services is complex and there are a number of inherent tensions. The HFA must consult with communities over their priorities, which must be balanced against the Government’s overall priorities. While remaining responsive to local concerns and priorities, the HFA has to consider national consistency and to strive to minimise inequities in access to services between groups or regions. There is a constant tension between efficiency and equity, for example, in the rural level of services provided.

Over the past two years, the HFA has introduced a more systematic and explicit process of prioritisation into its decision-making. The HFA consulted widely with organisations and health professionals in mid-1998. The HFA proposed a prioritisation process that combined a principle-based approach with the marginal analysis phase of a technique called programme budgeting and marginal analysis (PBMA).  ⁸   The principles advocated by the HFA were (and remain):

• efficacy
• cost
• equity (of outcome)
• acceptability
• Maori health.

Following on from this work, and having considered the feedback received through consultation, the HFA identified four broad areas for applying the prioritisation framework:

1. the budget process for new money
2. the budget process for new projects
3. allocation of "discretionary" spending
4. the process of identifying marginal baseline spend for analysis.

During 1999/2000, the HFA’s "prioritisation process" has been applied across the organisation in bidding for the money available under the sustainable funding pathway for 2000/2001, as well as funding for new projects (ie, areas 1 and 2 above). Both demand-driven proposals (eg, expected increases in pharmaceutical and General Medical Subsidy (GMS) spending) and new initiative proposals were subjected to the same process. Based on feedback from consultation, the prioritisation process was applied within ringfences rather than across them as initially proposed. All proposals were reviewed by an internal Prioritisation Group with representation from all HFA operating groups whose members have relevant expertise, for example in economic evaluation.

Two "demonstration" projects were also undertaken to help refine and test the prioritisation framework and associated methodologies. These involved in-depth application of the framework, namely:

• a cost-utility analysis of deep brain stimulation as a new surgical intervention for Parkinson’s disease (personal health)
• an analysis on the screening of refugees for tuberculosis (public health).

These projects identified a number of "key lessons" that will inform subsequent prioritisation work. The second demonstration project is of particular interest from a communicable disease perspective. The application of the framework to a public health intervention shows that a principle-based approach to prioritisation may support increased resources for specific communicable disease control initiatives. In addition, people working in the public health area are often familiar with the concepts, information sources and analytical methods associated with prioritisation. This familiarity should assist with building strong cases for giving communicable disease a high priority.

Pharmac is New Zealand’s drug management agency, wholly owned by the HFA. In deciding which drugs should be partly or fully publicly funded, Pharmac must balance evidence on effectiveness against cost. Pharmac has developed considerable expertise in the process of cost-utility analysis as a way of comparing different drugs, both within and between classes, and deciding spending priorities. As information about drug efficacy is a prerequisite for registration, Pharmac usually has good information on which to base its decisions. Pharmac also receives expert input from Therapeutic Advisory Committees in making prioritisation decisions.

The NHC was originally established in 1993 as the Core Services Committee with a mandate to advise the Government on core health and disability support services to which the public should have access on fair terms. While the name and terms of reference of the Committee have changed since then, the Committee’s function remains similar – to advise the Minister of Health on the "kinds and relative priorities of public health, personal health and disability support services that should be publicly funded".  ⁹  

The Committee is thus not in the prioritisation decision-making pathway, but advises on both how to set priorities – at all levels – and, to a lesser extent, what some of those priorities might be. In its work, the Committee has developed considerable knowledge and expertise about many different areas of prioritisation. The Committee has always been an advocate of transparent, explicit, principle-based decision making and its four prioritisation principles – effectiveness, efficiency, equity and acceptability – are broadly similar to those of the HFA. Two prioritisation-related programmes that are now embedded in the sector – best-practice guidelines and booking systems for elective surgery – originated from Committee work.

Most recently, the NHC has provided independent commentary on the development and implementation of the HFA’s prioritisation process. As part of this process, the Committee commissioned in 1998 a commentary on the proposed HFA process from three (New Zealand-based) health economists.  ¹⁰   The principal conclusions of the report were:

• strong support for a systematic, explicit, transparent prioritisation approach, but this should be guided by informed judgement
• endorsement of a principle based approach to priority setting
• advice to use a mix of qualitative and quantitative approaches to priority setting
• support for a cost-utility analysis for prioritising some services, under the condition that pilot studies should be undertaken, especially for disability support services and population-based public health services.

The main concerns raised in the NHC report related to how the principles might be applied, an apparent emphasis on an overly technical approach, the lack of appropriate data on effectiveness and costs for many services, and the likely cost of the process itself. These concerns, and the suggested NHC responses to them, informed subsequent HFA work on the prioritisation process during 1999.

Providers
The processes by which service providers and individual health professionals decide who will and who will not receive services are many, varied and often difficult to identify. In recent years, there have been several initiatives designed to increase the transparency and consistency of decision-making at this level. The overall context, as with prioritisation by central agencies, is a desire to ensure that the resources invested in health care are used cost-effectively and fairly. Two of these initiatives are described.

The implementation of elective survey booking systems has lead to a stream of work on Clinical Priority Access Criteria (CPAC). In essence, CPAC consist of a collection of signs, symptoms and investigations that are considered to accurately predict the likely benefit that an individual will receive from a particular procedure. The development of CPAC for coronary artery bypass grafting in New Zealand has been fully described.  ^{11  ,   12}  

Guidelines are a second initiative that originated from the same NHC stable as surgery booking systems. The term "guidelines" is widely used both within and beyond the health sector, but there are two types of guidelines that are particularly germane to the process of prioritisation.

Access guidelines are agreed criteria that are used to determine whether or not a specific patient will receive a specific service. Such guidelines are only necessary when a particular service cannot, within current resources, be provided for every person who could potentially benefit from it. In this respect, they are more akin to CPAC than to practice guidelines. The most well known example of an access guideline in New Zealand is that of determining access to renal dialysis. The application of guidelines for access to renal dialysis has twice been a matter for considerable public debate in New Zealand.  ¹³  

Practice guidelines, also known as best practice, clinical practice or evidence-based guidelines, are defined as "systematically developed statements to assist practitioner and patient decisions about appropriate healthcare for specific clinical circumstances".  ¹⁴   Common features of practice guidelines are:

• a systematic approach
• support for decision-making
• concern with specific clinical problems.  ¹⁵  

In essence, practice guidelines summarise the evidence about the benefits and risks of particular diagnostic or therapeutic interventions. This information assists health professionals and consumers to prioritise care options that are likely to confer the greatest benefits to the individual, according to that individual’s own values.

A programme on practice guidelines was initially developed under the auspices of the NHC and continues under an independent New Zealand Guidelines Group (NZGG). To date, most practice guidelines developed in New Zealand have focussed on clinical specialties, but they are just as relevant to the prevention and control of communicable disease. For example, guidelines on the appropriate prescribing of antibiotics for different diseases are an important tool for reducing inappropriate antibiotic prescribing. One area for attention has been the prescribing of antibiotics for otitis media and many Independent Practitioner Associations (IPAs) now have guidelines on this topic.

Discussion

This paper has outlined briefly the ways in which prioritisation decisions are made at different levels of the health sector. A trend in recent years has been the incremental move to making such decisions more transparent and explicit at a policy, purchasing and practice level. A principle-based approach to prioritisation has merit and could be applied at all levels of the health sector and a range of tools is being developed to implement agreed principles at each level.

A full discussion of the complexity of priority setting in the health sector is beyond the scope of this paper, which is largely descriptive. However, there are three issues that are of topical relevance or interest.

First, while the development of the HFA prioritisation process involved consultation with a range of health sector groups initially, there has been little public input. Even the five agreed principles have still not received the benefit of public consultation. Given the underlying premise of improving the transparency of decisions, consultation with the public should be high on the agenda, a situation that the HFA acknowledges.

A second issue relates to how the HFA prioritisation process will be applied within the new health sector structure in which the Ministry of Health will assume many of the HFA’s current roles although District Health Boards (DHBs) will be responsible for deciding on the "mix, level and quality of health and disability services".  ¹⁶   Indications are that, at least initially, the DHBs will be quite closely regulated and will move over time to a state of greater autonomy. The implication is that the Ministry is likely to be largely responsible for prioritisation decisions once the Ministry–HFA merger is completed, while this function will be devolved steadily to the DHBs over time. It will be interesting to see how prescriptive the Ministry is to the DHBs over the use of prioritisation processes. Will the Ministry simply define the principles (presumably, once they have been publicly consulted on) and stipulate that prioritisation decision must be clearly transparent and publicly accountable? Or will the Ministry prescribe what those processes should be and which tools should be used in making prioritisation decisions?

Finally, it will be interesting to see what changes are made to the process of priority setting at the level of Government and Cabinet. The Labour manifesto stated the intention to "put in place procedures to require that all policy proposals put to Cabinet are first audited for their effects on public health".  ¹⁷   Such a process could have large implications for the way in which Cabinet decisions are made about both health sector and non-health sector proposals. This process could ensure that policy proposals with greater demonstrable benefits for health are given higher priority than those with lesser apparent benefits. The impact of such decisions could be large, so it will be important that the tools used in this process are considered carefully, applied rigorously and evaluated appropriately.

All health systems are striving constantly towards the goal of providing high quality, safe care on an equitable basis and within constrained resources. This demands constant questioning of the basis of decisions and all participants – including politicians and the public – should be asking the fundamental question:

"Is spending this health dollar on this service a good use of resources or would it be better spent elsewhere?"