Budget 2018 - counting vs measuring in Vote Health

Return to eHealthNews.nz home page

Regular column by Scott Arrol, CEO of New Zealand Health IT (NZHIT)

While Vote Health did well in the Budget, Scott Arrol is concerned that focusing on counting instead of measuring value-based outcomes means it’s hard to know if the health IT dollar is being well spent.

For the 2018–19 year, Vote Health has increased by nearly eight per cent on the current period ($16.7 billion to $18.2 billion) with a total of $3.2 billion of additional operational funding and $850 million of capital allocated over the coming four years.

Great stuff and I’m sure the majority of us working in the health sector will be pleased by these numbers.

Counting versus measuring results

However, the challenge that the health sector has is that we’re very good at counting things versus measuring for results. I believe this, and previous, governments are still failing to provide the level of leadership needed to really shift the dial, so we can be confident the levels of funding are spent where it makes the most impact.

For example, we can count how many people are likely to have bowel cancer and put a programme in place to identify and treat those that do, but we’re not good at getting to the reason for its high level of prevalence in New Zealand and measuring the success of preventing it in the first place. A reactive model versus being proactive in planning and preventing something happening in the first place.

Which brings me to information technology and how it is currently positioned in the health sector – not well. I say this because we’re neither counting nor measuring its effectiveness and how it can be used proactively to truly enable quality healthcare outcomes.

Firstly, IT is seen as a cost item (a count) but we can’t identify the full cost to the sector as there is not a single line of expense in the Budget. The devil’s in the detail and good luck to anyone who wants to accurately pinpoint how much is spent on IT in the public setting.

Until this changes then all we’re doing is taking a guess at the count and there’s absolutely no measuring of effectiveness occurring. This contributes to the amount of spear throwing that occurs when IT projects go off track and blow budgets by extraordinary amounts. Conversely, it is also why there are high levels of frustration, as we don’t have accurate numbers to count. Thus, we can’t get anywhere near trying to measure whether the numbers are working for us as a country, or not.

Recent investigative reporting has done an excellent job of highlighting this issue, but the actual numbers are still only a wet finger in the air estimation, albeit better than nothing. So, let’s assume $300 million (1.8% of total Vote Health) is the amount currently spent on IT in the public health sector. Is it then safe to assume that this year’s Budget has increased the IT spend by eight per cent or $24 million (per Vote Health’s increase for 2018–19)? Of course, we can’t assume this with any accuracy because there is no single line to refer to. It might be more, it might be less, but whatever it is, how can we know whether it is being spent effectively or not?

Measuring investment in health IT

So, what needs to happen? Firstly, the total number needs to be identified (counted) and reported on at a national level. Secondly, leadership needs to be shown by the government on what the level of investment in IT is going to be, as aligned to the New Zealand Health Strategy, the Digital Health Strategy and best practice internationally. Thirdly, there needs to be a direction of travel for this investment over the coming years so we’re measuring its effectiveness against the plan.

In any case, 1.8% is far too low and this has to be addressed with urgency. It needs to be grown to four per cent of total Vote Health’s budget ($1 billion based on the 2018–19 Budget) and, in next year’s Budget we need to see this listed in the summary of initiatives published in the documents.

In this year’s Budget we saw 12 initiatives that are targeted to receive additional money over the next four years. Hence, on the current trajectory, by the 2021–22 period Vote Health would be in excess of $20 billion and IT investment would be close to the $1 billion mark.

Of course, this level of increase then demands a whole set of planning to make sure the money is being spent where it should be in order to get the best bang for buck. But, most importantly it means we’ve all got to step up in terms of providing leadership for the health sector as there’d be no more excuses available.

This then brings me to the need to move to investing on the basis of value-based outcomes and that New Zealand has to move in this direction for our health system. Failure to do this will make it totally unsustainable to fund our health services in the current manner. We just can’t keep taking a cost-plus approach, especially when it’s based on counting not measuring.

Scott Arrol is the CEO of New Zealand Health IT (NZHIT).

Return to eHealthNews.nz home page