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Chapter: Medicine Study Notes : Public Health

Health Care Delivery

Issues in Service delivery: Key international trends: o Changing demographics: esp ­ elderly o Communicable -> non-communicable diseases o Concern with economy given rising costs

Health Care Delivery


Issues in Service delivery *


·        Key international trends: 

o   Changing demographics: esp ­ elderly

o   Communicable ® non-communicable diseases

o   Concern with economy given rising costs

o   Who should pay: public vs private

·        Issues in service delivery:

o   Institutional arrangements:

§  Output funding

§  Priority setting

§  Funder/provider splits

§  Managed care

o   „Cultural‟ issues:

§  Competition vs cooperation

§  Control vs community voice

§  Management vs technology

·        Influences on NZ history:

o   19th century legacy:

§  Parochialism (isolation ® self-government)

§  Adhocracy (new problem ® new organisation)

§  Egalitarian myth: services by right


System in NZ


·        References: Introduction to the New Zealand Health System, Peter Crampton and Anne Viccars, Departments of Public Health and General Practice, Wellington School of Medicine

·        Factors facing health systems in developed countries:

o   Ageing populations

o   Medical technology

o   Rising expectations

o   Treaty of Waitangi

·        Health Care expenditure in New Zealand:

o   1998 total: around $8 billion. Vote health was $5.6 billion in 97/98.

o  7.6% of GDP (compared with Australia 8.3% and UK 6.7%)

o  Public 77%, private 23%.

o  18% of total government expenditure.

o  Proportion of people covered by health insurance has declined since 1994/95

·        Health Legislation:

o  Health and Disability Services Act 1993 (now repealed)

o  Health Act 1956: main piece of public health legislation

·        Health Policy Agencies:

o  Ministry of Health

o  Other central agencies: Te Puni Kokiri, Treasury, State Services Commission

o  Other advisory bodies:

§  National Advisory Committee on Health and Disability (National Health Committee)

§  Mental Health Commission: established in 1986 following Mason Inquiry 

§  Health and Disability Commission: established in 1994 – responsible for the Code of Health and Disability Consumers‟ Rights 

§  Health Sponsorship Council: Established under smoke-free environments Act 1990 to sponsor activities previously sponsored by tobacco companies

·        Purchasers: Used to be the HFA, including Pharmac and Health Benefits Limited

·        Purchaser-Provider Split:

o  Potential benefits were:

§  Efficiency: due to competition

§  Equity: reflect need not historical provision

§  Accountability clearer

§  Cost containment due to capped budgets

§  Consumer sovereignty

§  Better information

§  Improvements in primary care: IPAs and Maori services

o  Problems:

§  Short term market lead decision making

§  CHE debt/missed business plans

§  Transaction costs ® bad contracting relationships ® 3rd party intervention

§  Asset specificity: providers locked in ® little real competition

§  Fragmentation of services

§  Loss of co-operation

·        Primary Care:

o  Numbers:

§  2,800 GPs (about 2,500 FTEs)

§  1,600 practice nurses

§  1800 – 2000 practising midwives

o  Funding:

§  GP income derived from: Subsidies (depending on patient age and CSC/HUHC), patient fees,

§  ACC

§  Primary Care Expenditure: 59% pharmaceuticals, GMS 15%, labs 13%, maternity benefit 8%

o  Themes: managed care, budget holding, integrated care

·        Latest reforms:

o  Ministry of Health and HFA merged 

o  21 District Health Boards created (roughly around old Hospital and Health services): have a purchasing and a provision function

o  Maternity providers funded by MoH

o  DHBs fund NGOs, GPs, Private providers, public health providers

o  ACC continues direct purchasing from primary and secondary providers

o  Key changes:

§  No purchaser-provider split

§  Community control 

§  Budget tension between primary and secondary services forced down from central agencies to DHBs 

§  21 Boards too many: diseconomies of scale

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