Policy Area: Health

Statement of General Direction:

(a) Government is committed to providing a flexible, modern, properly funded, accessible health service that meets changing public needs and expectations. The Coalition Government's health policy has the overriding goal of ensuring principles of public service replace commercial profit objectives for all publicly provided health and disability services.

(b) The Coalition partners are committed to publicly funded health care that encourages cooperation and collaboration rather than competition between health and disability services.

(c) By July 1998 there will be one funding body separate from the Ministry of Health which will carry out functions determined after consultation with the health sector and a review of the current system.

(d) Public health providers - Crown Health Enterprises (CHEs) - will be required to function in a businesslike manner. The new focus will be on achieving health outcomes and improving the health status of the populations they serve. Private sector involvement in services usually provided by the public sector will be subject to criteria set by Government.

(e) Every effort will be made to minimise disruption to the health sector by progressively introducing any changes to health services referred to in this document. In most circumstances current arrangements will continue until 1 July 1998 when new policies and legislation will be in place.

Key Initiatives of Policy:

1. General:

(a) The Minister of Health will be responsible for the whole publicly funded health sector and the publicly owned health providers.

(b) Vote: Health funding will be increased. Extra funding will be available to reduce waiting times for hospital treatment. Guaranteed maximum waiting times for various procedures will be introduced.

(c) Health and disability services for children will be boosted to ensure children receive the care and protection they need for the best possible start in life.

(d) Equity of access to health and disability services across generations will be assured by removing income and asset testing for older people needing long stay geriatric public hospital care services and asset testing for long stay geriatric private hospital care.

(e) By 1999/2000 introduce an exemption of $100,000 on the family home on the income and asset test on rest home care for single people and for married couples where both are in care.

(f) Increased resources will be made available to address major issues in the delivery of mental health services.

(g) In recognition of Government's commitment to improving the status of Maori health, increased resources will be made available to provide Maori leadership within the health sector, and to enable the continuing growth and development of Maori health service provision by Maori.

2. Changes to CHE Health and Disability (Regional Hospital and Community) Service Provider:

(a) Replacing CHEs with Regional Hospital and Community Services which will deliver those services currently provided by CHEs. They will report directly to the Minister of Health through the Ministry of Health.

(b) Removing the competitive profit focus for Regional Hospital and Community Services, replacing it with a requirement to carry out its activity in a businesslike fashion. The principle goal will be achieving improved health outcomes to contribute to the health status of the populations they serve. Legislative and administrative arrangements that will achieve these goals will be completed during 1997.

(c) A commitment will be demonstrated to publicly provided health and disability services, with long term contractual agreements with Regional Hospital and Community Services for a range of services with the intention of providing the maximum amount of health care to patients for the taxpayers' funds available. Services will cover the following range:

community and rural health
mental health
Maori health
dental health
public health (including health protection and promotion) intellectual, age related, physical/sensory disability support services maternity (including pregnancy and childbirth services) wellchild services
Accident and Emergency
secondary/tertiary medical and surgical services
diagnostic services.

(d) (i) Publicly provided health and disability services are complemented by a wide range of non-govern ment health service providers. Regional Hospital and Community Services may form joint ventures with these non-government providers or other Crown providers, working collaboratively with them, when this is consistent with health gain priorities and with the criteria in (d) (ii).

(ii) Current contractual arrangements involving the private sector in CHE based services will continue. However, any new joint venture, subcontracting or private work undertaken, or involvement by private companies in CHE based services will be limited. Private sector involvement must result in improvements as defined in health outcomes, pose no increase in financial risk to the Crown assessed over the next ten year period, and must be approved by the Minister of Health after consultation with Coalition partners.

(e) Regional Hospital and Community Services will be required to develop initiatives in partnership with Maori, which lead to demonstrable improvements in Maori health status.

(f) The Coalition partners have agreed to make minor amendments to the Commerce Act as it relates to some parts of the Health sector.

(g) Ensure accountability and performance of Regional Hospital and Community Services receive high priority in their funding agreements.

(h) Review after consultation the number of Regional Hospital and Community Services adjusting service boundaries to the optimum configuration to achieve health outcome goals.

(i) Elected community representation will be considered by a joint working party of Coalition Members of Parliament as to the most appropriate place for public representation in the health sector.

(j) The health sector will be consulted on changes to current arrangements in administration and legislation, governance and reporting.

(k) In the case of general practice any budget holding beyond the General Medical Subsidy, primary laboratory and pharmaceutical budgets must result in improvements in defined health outcomes, pose no increase in fiscal risk to the Crown assessed over a ten year period, and must be approved by the Minister of Health after consultation with the Coalition partners.

(l) Reconsider the decision to unbundle ACC funding from CHEs for acute and some elective surgery.

3. Funding Arrangements:

(a) By July 1998 there will be one funding body separate from the Ministry of Health which will carry out functions determined after consultation with the health sector and a review of the current system.

(b) Public health services will no longer be competitively purchased by Regional Health Authorities (RHAs). Providers of public health services will be required to comply with stringent contractual funding agreements with clear health outcome goals.

(c) A review of the most appropriate structure to carry out these changes in policy will be conducted and concluded by May 1997. The Coalition will consider all significant developments and agree on all aspects of implementation arising from the review.

(d) Implementation of the changes necessary to meet the policy objectives will be completed by March 1998 in orderto minimise the disruption to health services delivery to New Zealanders and to manage a smooth transition to the new arrangements.

The six principles below are agreed as non-negotiable:

1. Retaining the separation between the structure that replaces RHAs as funder and all health service providers including CHEs/Regional Hospital and Community Services, Independent Practitioner Associations, General Practitioners, disability services, rest homes etc.
2. Limiting bureaucracy where possible.
3. Removing the "for profit focus" from the CHEs but requiring them to work in a businesslike fashion.
4. Giving greateremphasis to health gain.
5. RHA purchasing from providers on a competitive price volume basis will be replaced with contractual funding agreements between the structure replacing RHAs and all providers based on historic funding information and levels, benchmarking information, changes in technology and comparative data to provide a cost effective health system that delivers the maximum amount of health care to patients for the taxpayer funds available.
6. The structure replacing RHAs will undertake monitoring, auditing and reporting functions to enhance health gain and financial accountability.

4. Increase health sector resources and remove financial barriers to people needing to access health and disability services including:

(a) Increase baseline funding to Vote: Health after full consideration is given to the sustainable funding work being undertaken.

(b) Increase the waiting times fund by $50 million in 1997/98.

(c) Establish guaranteed maximum waiting times for surgical and specialist treatment.

(d) Remove hospital user part-charges.

(e) Provide free doctor visits and prescription medicines for children five years and under.

(f) Remove income and asset testing for long stay geriatric public hospital care services and asset testing for long stay geriatric private hospital care.

(g) By 1999/2000 introduce an exemption of $100,000 on the family home on the income and asset test on rest home care for single people and for married couples where both are in care.

5. Pilot a community based family health team approach forthe delivery of some primary healthcare services by Regional Hospital and Community Services:

(a) Regional Hospital and Community Services family health teams coordinate and in some instances integrate primary healthcare with the delivery of the following services:

community health
mental health
Maori health
dental health (including school dental services)
public health (including health protection and promotion) intellectual, age related, physical/sensory disability support services maternity (including pregnancy and childbirth services) wellchild services
hospital secondary and tertiary services.

(b) Family health teams will facilitate access for people needing hospital care taking responsibility for their transition through health and disability services. Family health teams will be involved in providing some child health and disability services. They will act as a referral agency for other child health service providers monitoring service delivery forat risk children.

6. Maori Health:

(a) Development of competent Maori health providers is a critical requirement to support improvements in Maori health status.The following initiatives will be undertaken:

(i) Accelerated development of the professional Maori workforce.

(ii) Development of administrative and organisational expertise.

(iii) Maori leadership within the Ministry of Health with dedicated provider approval, monitoring and evaluation functions.

(iv) Increased public health resources forMaori provider development both directly to Maori providers and as a service obligation of Regional Hospital and Community Services.

(b) Referred Maori service providers who meet minimum standards as set by the Ministry will be funded to provide a comprehensive range of primary health care, community based health and disability services and identified secondary health and disability services.

7. Child Health

(a) In order to ensure a greatly enhanced focus on the health and protection of children the Ministry of Health will be required to appoint a senior person whose responsibility it will be to oversee, coordinate, motivate and lead in the area of health gain priority areas, ie:

child health
Maori health
mental health (Commissioner and Director of Mental Health already in place) waiting list/waiting times

These people will report to the Director-General of Health and Minister of Health on progress or the lack of it in these areas.

(b) During 1997 all child health programmes currently in operation will be reviewed with a view to building on those that deliver the best health gain and improved family function thus reducing risk to children.

8. Mental Health

(a) The recommendations of the Mason Report are to be fully funded and implemented.

Legislative Implications of this Policy Agreement:

(a) Significant amendments to Health and Disability Services Act.

(b) Minor amendments to the Commerce Act as it relates to the health sector.

Fiscal Implications of this Policy Agreement:

			Over and above current baselines
			1997/98	1997/98	1999/2000
Likely increased baseline funding based on current information			$156m	$291m	$490m
Additional resources for elective hospital treatment			$50m	$50m	$50m
Remove hospital user part-charges			$7m	$7m	$7m
Free doctor visits and prescription medicines for children five years and under			$65m	$65m	$70m
Remove income and asset testing for continuing care in public and the asset test for private hospitals			$45m	$40m	$40m
In 1999/2000 exempt house to $100,000			-	-	$67m (est)
Establish "safety net" child health and disability services			$30m	$30m	$30m
Maori health provider development			$10m	$10m	$10m
Additional mental health funding			$15m	$30m	$45m
			$378m	$523m	$809m