Prioritising Health Care

• Introduction
• Overview of the Sector
• Purchasing in the Nineties
  • Coromandel Consultation Process
  • Booking Systems
  • HFA Prioritisation Process
• Challenges for the Future
• References

Introduction

Decisions about priorities are something people make every day in their personal lives, because, for example, they can’t afford everything they want, they need to prioritise. The decisions they make are sometimes well planned, based on hours of investigation, and at other times ad hoc and rapidly made.

Similarly, making decisions about how and where money is spent within the health sector is a vital responsibility of those within the sector. These decisions are made at all levels in the sector from the governmental through to that of clinicians working directly with the public. The pattern of health service delivery that New Zealand has today has developed over many years, through a variety of different structures and ’ownership’ models. Throughout that process many factors have influenced how resources are allocated - some resource allocation processes are well planned while some are simply based on historical allocation.

In the early nineties, with the establishment of separate health service purchasing agencies, the prioritising of resource allocation became more transparent. Since there is never enough money to buy all services that people want, purchasers have to make decisions, often difficult and unpopular ones, about which services take priority. These decisions have led to wide and significant debate. Over the last decade there has been an increasing consensus about the need to prioritise and a growing acceptance that the public health system will never be able to provide for everybody’s needs. This debate will continue as advances in technology and knowledge increase the range of options available to individual patients and the system struggles to provide a service that improves the health status of New Zealanders.

This paper provides a personal perspective on the development of the issue of prioritisation in health services during the last decade, and an opinion on the challenges for the future.

Overview of the Sector

In any discussion concerning prioritisation of health services it is important to look at the sector as a whole and acknowledge that each of the various organisations at different levels in the sector has a role to play in the distribution and prioritisation of health services.

The government has the first role in the process. Each year it decides how much money it will allocate towards health and disability support services when it fixes the size of Vote: Health. This is done after considering all the competing priorities on which government could spend money that year. During this process it sets "ring fences" within which money is allocated specifically to personal health, public health, mental health or disability support services. The government’s Medium Term Strategy and its Crown Statement of Objectives identify other governmental priority areas.

In addition, "the government, through the Minister of Health, receives advice from the Ministry of Health, Health Funding Authority, and the National Health Committee on which services and how much of the service is funded."  ¹  

All the government’s health sector priorities are mirrored in the funding agreement developed each year between the Crown and the Health Funding Authority (HFA).

The HFA is responsible for purchasing health and disability services for all New Zealand. Its budget for 1999/2000 is $6.7 billion dollars and it holds more than 4,500 contracts with a wide range of providers. There are enormous pressures affecting New Zealand’s health system - from ageing populations, accountability requirements, new technology, the need to balance the co-ordination of hospital and community care, community expectations about issues such as consultation and quality and, most importantly, the increasing pressure to adequately address the disparity between the health status of Maori and Pacific Island peoples and the rest of the population. "The trade-offs that the HFA must make, based on Government policy, direction from government and consultation with the sector and the public are between:

• the goal of meeting community expectations for services versus services based on the best available evidence of what will improve health
• offering access and choice versus controlling expenditure on health
• ensuring local flexibility and innovation versus requiring nationwide consistency
• entitling individuals to care versus rationing within a budget to maximise health gain for the whole population"  ²  
  
  

The HFA’s activities are designed to manage these opposing pressures and to purchase services that best enhance the independence and well-being of all New Zealanders

At the interface between the public and the provider of health services there are a range of processes that prioritise use of services. Some of these are quite difficult to identify but many are based on ’best practice’ and in recent years significant investment has been made in developing guidelines that provide a more transparent process of service prioritisation at the level of individual health professionals. At this level of the sector, prioritisation is having a direct effect on individuals and can be extremely difficult, not least emotionally, to manage.

Purchasing in the Nineties

New Zealand’s purchaser/provider split in the health sector was introduced in 1993. It was intended to strengthen the ability of both government and the sector itself to set and implement priorities. It was also intended to balance the biases towards hospital-based services and to encourage a growth in community care. In striving to achieve this, it was expected, the purchaser/ provider contracts would encourage innovation in the way services were delivered and promote greater equity between communities and population groups.

The evolution of the purchaser role in New Zealand has encouraged and supported resource allocation developments in the sector. I was lucky enough to be involved in the development of the purchaser role in New Zealand from its inception. While I was Chair of the Bay of Plenty Area Health Board, it implemented an internal purchaser/provider split and started developing the purchasing skill base in New Zealand. After the 1993 changes I became deputy Chair of the Midland Regional Health Authority (RHA). With the transition to a national purchaser in 1997, I became a Director of the HFA. In June 1999 I took up the position of Interim Chief Executive of the HFA. When I look back over nearly a decade of "thinking purchasing" there are some specific initiatives that I feel are worthy of mention.

Coromandel Consultation Process

During its first few years, the Midland RHA experimented with various methods to consult local communities and involve them in decision-making about the provision and use of health services. The Coromandel Stakeholder process was one of these initiatives. In August 1994 the Midland RHA began a pilot consultation process working with people in the Coromandel area to help plan future health and disability services. Nineteen residents met regularly with representatives of Midland Health for 10 weeks. The group was representative of the community - it represented the young and the elderly, those living in isolated areas, those with disability, Maori and health service providers. Other individuals from the community had the opportunity to "have a say" through oral and written submissions. The final report produced contained the recommendation to Midland Health on the health and disability services that should be purchased on behalf of Coromandel residents. In developing the recommendations the group considered:

• the wishes of local residents
• the diverse needs of Coromandel residents
• what makes a "health community"
• local, national and international trends
• local and national health priorities
• the health status of Maori
• demographic information
• estimated costs of health service options
• a range of issues specific to Coromandel residents
• special needs of people with disabilities.  ³  
  

Most of the recommendations made by the Stakeholder Group were implemented and the mix of services provided in Coromandel was enhanced as a result of this process. One result was that the old Coromandel Hospital was closed and the services for the elderly were provided locally by a more efficient provider. Midland Health did use the Stakeholder process again but with limited success and it was felt that the cost outweighed the value the second time.
Three weeks ago I meet one of the participants in the Coromandel Stakeholder process and her perspective, six years later, was that the people of Coromandel had had an opportunity to be involved in decision-making that was still influencing their community. Initiatives that had started after the completion of that process were still flourishing.

In the Stakeholder recommendation document the group comments: "What we require of a health system is that firstly, it does not remove or reduce services until better alternatives are in place and secondly, that it creates an environment which allows for flexibility, encourages innovation and makes use of the community’s own knowledge and experience . . .".

Have purchasers in New Zealand utilised the community’s knowledge and experience successfully in the purchasing of health services? Not as well as we could have or should have. If we had more actively involved the communities we would now have a population who understood its health system and the issues surrounding service prioritisation much better than the public of New Zealand do today.

Booking Systems

The issue of waiting lists and waiting times for elective surgery has long been a difficult issue for the health system to resolve. Waiting times have frequently been used as a political measure for the success or failure of the total system.

The National Waiting Times Project to develop nationally agreed criteria and a booking system for elective surgery was first set up under the four RHAs in 1997.

"The overall aim of the project is to build certainty and confidence in the security and stability of the public health system. More specifically:

• people who truly stand to gain benefit from interventions and services will be able to have equitable access to them within the resources provided by Government
• there will be a transparent system for public health provision in medical, surgical and diagnostic services
• people will have certainty of access for assessment and treatment within a clinically appropriate framework."  ⁴  
  

The project is based on the principle that all New Zealanders are entitled to the same level of elective surgery regardless of where they live. Until the implementation of this project, elective surgery was always easier to access in the more rural areas and there was unequal access to surgery across the country. The project’s goal is that people will receive elective surgery within six months of being prioritised. Where their condition is of a lower priority than the level of publicly funded elective treatment allows, a care plan is agreed between the patient and their general practitioner The majority of surgical specialties have now developed national referral guidelines. Clinical working parties have made huge efforts to ensure national consistency.

The progress made in developing booking systems has allowed further debate about the appropriate level of funding for elective surgery. Once the booking system assessment tools had been developed it was important to clear the backlog of people on the waiting lists before the new system could work successfully. Over the last few years about $150m has been spent on reducing this backlog. The HFA estimates that around $70m in additional funding would be needed annually to ensure the system is able to provide for:

• 100% of first specialist assessments completed within 6 months of receipt of referral
• 100% of people being certain of their treatment status once their assessment is complete
• 100% of those given certainty of treatment to be treated within 6 months of assessment unless surgery is deferred by the patient
• all hospitals to have in place a system for shared general practitioner and specialist care for those people who do not meet the criteria for treatment at this stage.  ⁵  
  
  

The key building blocks for this project are now in place and for the first time in the history of the New Zealand public health system it is able to provide the same level and mix of elective services across the country.

HFA Prioritisation Process

Mechanisms for prioritisation are an essential element of resource allocation. The process of prioritisation enables the maximum possible health care within the means provided by the government. Existing publicly funded services have been unable to keep pace with the community’s ideas of who should receive what service.

During 1998 the HFA developed a prioritisation framework which provides a basis for prioritising within service groups and between different types of services. The principles underpinning the framework are:

• effectiveness
• cost
• equity of outcome
• Maori health
• acceptability.
  

The framework was widely discussed with provider organisations and health professionals. An important next step in that development was to have been a widespread consultation process during 2000. No framework will be successful unless it recognises the aspirations and values of the community. Ordinary New Zealanders should have a part to play in deciding priorities for health services delivery - after all they are the ones who both pay for and use the services.  ⁶   Prioritisation is simply a means of providing the right services to the people who need them most.

Although significant work has been done thus far in identifying the issues that need resolution, coming up with conceptual solutions, designing the processes, developing prioritisation tools, training staff and running pilot projects, there is still a lot of work required to complete the design. Many of the skills required to successfully develop the framework and operate it after completion are rare and take time to build. It is also vital that health care providers are involved in the process.

To date the HFA has applied the framework to the budget process for new money and the process for new projects. This experience has demonstrated how difficult prioritisation is. Demand driven expenditure (expected increases in Disability Support Services and primary care subsidies) and new projects were all considered in the same process. The reality is that the demand driven expenditure takes priority by its very nature, and that support is given to those services with the greatest pull. A prioritisation framework will be truly successful when the confidence and skills exist to allow it to be applied to the total spend in health. Then, rather than supporting the status quo in health service delivery, the sector will be able to truly assess if the range of heath services provided is the right services for New Zealand’s population, and provides the greatest health gain to those most in need.