Agency to rule on new cures

02:11, Aug 23 2009

A powerful agency will decide which treatments to provide at public hospitals under a major revamp of the health system.

The Government yesterday made public a long-awaited report on the health system after details of a Ministerial Review Group's recommendations were leaked to The Dominion Post last week.

The report recommends gutting the Health Ministry by shifting many of its functions to a new National Health Board. It also recommends extending the powers of the national drug-buying agency, Pharmac, to decide which medical equipment should be bought and significantly boosting the powers of the existing National Health Committee to decide what new diagnostic procedures and treatment should be provided by the public health system.

It recommends that hospital services be decided on a region-wide basis, rather than leaving it to individual district health boards to decide saying "parochial interests" risked leading to poor decisions and determining access to services and treatment by "post code".

The report was written against the backdrop of warnings that New Zealand's ability to pay for world-class health treatment is increasingly under threat.

It recommends putting the National Health Committee in charge of determining what new treatments should be eligible for public funding "and the conditions under which they should be applied".


"For example, as well as defining the patient group most likely to benefit, a new treatment might only be suitable for trial, or use in tertiary hospitals, or where everything has failed an individual patient.

"As part of its reprioritisation process, the National Health Committee should also be asked to identify and assess a number of existing interventions annually that ... appear to be low priority."

The group appears to be using a Pharmac-like model for the plan. Pharmac determines what drugs should be subsidised on the basis of cost and effectiveness, but it has courted controversy for refusing to fund some drugs. The most recent example was the breast cancer drug Herceptin, which the Government eventually agreed to fund.

Labour MP Ruth Dyson said the recommendations "dangerously point to a rationing of frontline health services". "Mothers, the elderly and others not in paid employment should be extremely worried by any suggestion of rationing healthcare to those in paid work."

Green MP Kevin Hague said the idea that healthcare should be rationed on the basis of an ability "to contribute to economic growth" was "obnoxious in the extreme".

But the Ministerial Review Group, which was headed by former Treasury secretary Murray Horn, said it was only proposing "service prioritisation at the margin", acknowledging that experience in New Zealand and overseas showed that any attempt to identify which core services should be publicly funded was "unlikely to succeed in the current environment".

Association of Salaried Medical Specialists executive director Ian Powell said the proposals were radical and destabilising. "It has the feel of a Stalinist monolith about it."

It was "bananas" to suggest that "creating more bureaucracy reduces bureaucracy".

Health Minister Tony Ryall said the Government was not obliged to accept any of the report's 170 recommendations, and he would not support any that increased bureaucracy. The Cabinet is likely to consider the report in the next few months.


New Zealand on average spends less per person on health than other developed countries.

Spending on health has been growing much faster in New Zealand than overseas up 30 per cent since 1995, compared with an OECD average of 18 per cent.

The number of senior medical staff has increased by 46 per cent in the past 10 years but more than half of the doctors were born overseas and only 50 per cent of international medical graduates are still working in New Zealand after a year.

Real health costs are set to almost double if they continue to grow at the current rate in the next 20 years, requiring nearly twice as many hospitals, doctors and nurses.

GPs are working fewer hours, not more, since the Government put a cap on GP fees.

Medical error is estimated to harm 44,000 people a year at a cost of $570 million.

The Dominion Post