Ryall Tony: New Zealand Public Health and Disability Amendment Bill — First Reading 
Ryall Tony: New Zealand Public Health and Disability Amendment Bill — First Reading 
[Volume:663;Page:11018] 
Hon TONY RYALL (Minister of Health) 
: 
 I move  
That the New Zealand Public Health and Disability Amendment Bill be now read a first time. 
 At the appropriate time I will move that the bill be considered by the Health Committee. This bill is not about a major restructuring of our district health boards or the New Zealand public health service. Rather it is about taking the health board system and making it work better. The way forward to meeting our clinical and service challenges is not by having 20 district health boards operating independently duplicating functions often inefficiently. This bill is about increasing district health board and clinical regional cooperation. 
This is the first health bill that the new National-led Government has introduced to the House since its election 18 months ago. In this time important improvements have been delivered in a number of public health services despite the fact that we are experiencing the worst world economic recession since the 1930s. These improvements include a quadrupling of the average annual increase in the number of people getting elective surgery from under 3000 more a year to an increase of nearly 13000 in our first year. We have also seen improved emergency department waiting times and a massive reduction in the number of people waiting for more than 6 weeks before commencing cancer radiation treatment. We have also seen the successful capping of the growth in the health sector bureaucracy with a management administration cap being set for both district health boards and the Ministry of Health; and 1 year on both the ministry and the district health boards have responded by stopping that growth freeing up more resources for patient services—and these are only a few examples of progress. 
Although these gains are positive it is clear the wider public health system faces many challenges. The election of the new Government saw it inheriting a public health system that had many strengths such as a committed workforce but many serious challenges. Among the most important of these were workforce shortages district health boards supplying around $155 million in health services for which they were not funded and intensifying pressure on a number of services. An example of this was the pressure on elective waiting lists which has seen the previous Government culling over 30000 patients from the system many of whom were promised operations. 
It is clear that the public health system faces huge future challenges and a potential doubling in demand over the next decade. How do we best meet the health needs of our population which is both growing and ageing and a population that is expecting increased access to particular health services such as elective surgery and rightly aspires to benefit from medical and technical advances? These sit us alongside the need to upgrade and expand our health infrastructure including our hospitals information technology and equipment and above all to grow our health workforce in the face of competition from neighbouring countries with greater wealth. All this in a time of short-term decline in Government revenue and forecast moderate medium-term growth caused by the world’s recovery from the worst economic crisis. 
An early priority of the new Government was to establish an expert ministerial review group made up of experienced people with health and management expertise from across the health sector to give their advice on reducing bureaucracy and improving front-line services. This ministerial group consulted widely met with a wide range of health groups and individuals deliberated and returned to many groups to test their thinking. Building on the developing consensus on the need for improvement the ministerial review group developed a forward-looking set of over 170 recommendations. These recommendations covered both very specific recommendations such as reducing the plethora of committees we inherited and higher-level major advances such as the establishment of a national health board and consolidated planning of information technology in the health sector. 
Most recommendations have been subject to ministerial and official examination and progressed as rapidly as possible. This bill progresses some of those recommendations more specifically to stop reinventing the wheel 20 times through a better focus on shared services and the power of bulk purchasing. It also focuses on the need for a more regionalised approach to district health board planning of services and a stronger commitment to ongoing improvements in quality. 
The bill amends the New Zealand Public Health and Disability Act 2000 to support improvements that are required to meet those challenges. The bill provides the framework to improve national and regional cooperation and reduce duplication of back-office functions. The bill also supports a greater focus on patient safety across the health sector and responds to calls from health professionals across the nation for an independent clinician-led agency to establish quality improvement across the whole health service. 
Cooperation between district health boards can improve quality of care reduce service vulnerability and improve cost-effectiveness by reducing the transaction costs of district health boards conducting their own individual processes. When the current district health board model was introduced in 2000 the intention was that district health boards would collaborate and the Minister of Health would be able to use accountability arrangements and policy settings to reinforce the importance of collaboration. Although some steps have been taken by district health boards towards regional collaboration and planning such as through healthAlliance in Auckland progress has been limited and it has become increasingly clear that there are barriers including legislative barriers preventing district health boards from making genuinely collective decisions consistently and in a timely manner. To address these problems the bill seeks to improve national and regional service planning and decision making by ensuring that district health board planning takes into account national and regional as well as local requirements and this includes freeing up various reporting requirements to reduce needless administrative costs. 
The bill will also amend district health board objectives and functions to ensure they work collaboratively to meet national regional and local service needs provide dispute resolution measures to support district health boards working collaboratively and enable elected district health board members to be appointed to other district health boards. These amendments will ensure that district health boards collaborate to ensure a better balance of district regional and national priorities in decision making which will allow the most efficient use of available resources. 
The bill also includes proposals to accelerate improvements in quality and safety by establishing a health and safety commission. High levels of quality and safety are the cornerstone of an effective trusted and efficient health service. To support this the Government has decided to establish a Health Quality and Safety Commission as a stand-alone Crown entity. This will bring a focus on quality and safety not previously achieved. The commission will be clinician-led. It will empower clinical leadership and foster the necessary clinical engagement to achieve our aims of continuous improvement quality and safety in health and disability services including services and private providers like rest homes. 
In addition it is estimated that avoidable adverse events cost the public health service between $500 million and $600 million a year. Realistically we cannot save all of that overnight but even a 20 percent reduction in errors arising from a greater focus on quality and safety could save us $100 million a year that could be reinvested in other front-line services. 
Finally the bill seeks to minimise administration costs and reduce bureaucracy in the public health service by supporting shared administrative support and procurement services across the public health service. The bill includes a backstop power for Ministers to direct greater collaboration and use of shared services by district health boards. We have identified that improving the national approach to shared services could yield significant cost savings reduce personnel ensure more efficient systems and provide a better health service. At the moment while district health boards can be encouraged to use shared services or processes to obtain administrative support and procurement services they cannot be compelled to even when there are clear benefits to that approach. 
The bill contains a last-resort power that enables after due process and consultation the Minister of Health and the Minister of Finance to direct district health boards as to how to obtain administrative support and procurement services as well as whom those services will be required from. This provides the opportunity for a dedicated shared services agency for the public health service to realise the benefits of bulk purchasing and the gains that could come from that. 
In conclusion this bill is not a major restructuring of our district health boards or the New Zealand public health service. Rather it is about taking the health board system set up by the previous Government and making it work better. It is about recognising that the way forward to meeting our clinical and service challenges is not through having 20 district health boards reinventing the wheel—duplicating functions often inefficiently. Rather it is about recognising that the way forward is through increasing district health board and clinical regional cooperation. A greater emphasis on regional planning and cooperation with the accompanying ability of the Government to move district health boards in this direction if necessary is part of the plan for protecting and growing our New Zealand public health service and for meeting tomorrow’s health challenges. I commend the bill to the House.