Former head of several national and state departments, Ian Fletcher explores a pressing national issue – the health system and the government’s role in it.
VIEWS FROM OUTSIDE THE APIARY: IAN FLETCHER
It’s been quite a time for the health system in New Zealand. The Health NZ Board quit, then the recently appointed chair was ‘promoted’ to be Commissioner, then the PM announced that he would chair a special committee to oversee Health NZ’s budget. It will, he says, focus on cash flow forecasting. There has been a steady flow of blame directed at Health NZ’s management for misleading Ministers on the budget (also with a focus on cash flow).
And there’s the little local difficulty in Dargaville, where the hospital seems, awkwardly, to have no doctors at night. Ministers express furious confidence in each other. And clearly top management is about to be thrown under the bus.
Meanwhile, I’m reliably told that Health NZ is indeed struggling with money, and has had to go to Treasury for cash top-ups to meet payroll. This may explain the PM’s focus on cash flow. Of course, while the Treasury can look like a cat’s bum when asked for extra money, the truth is that they can literally never run out of New Zealand dollars – they just get them from the Reserve Bank, who make them up. So, while cash management is very good discipline in government, it doesn’t matter the way it does in a private company (PM, take note). Cash flow problems are a symptom, as they say. But not a cause of death.
How should we think about the health system? It’s complicated. This is literally, mathematically true. I’ve written before about the excellent article “Is the National Health Service at the edge of chaos?”, written about the UK’s National Health Service and published in the Journal of the Royal Society of Medicine in December 2001. For ministers, it is an easy read (ignore the algebra; focus on the explanatory stuff).
The conclusions are clear: mathematically, health is a complex system. That means it has important properties: firstly, scale invariance – so small features or problems and big features or problems are likely to be the same. So, if Dargaville has too few doctors, it’s worth checking how bigger places are going.
Secondly, resistance to change – the system copes with pressure really well, which means it doesn’t respond much to government decrees either. That means if you cut staff, the remaining people will try extra hard to still treat the sick. Conversely, if you chuck in lots more money, results won’t get that much better quickly, unless it’s really a lot more. Squeezing cashflow will save cash, but outcomes won’t change. Staff and patients will get grumpy, and go to the media, as is starting to happen now. Remember, patients and their families see nursing and medical staff as heroes. Cost-cutting is not a medical procedure.
Thirdly, maximum efficiency. Systems like this are demonstrably optimal in resource use. It’s real value for money. So, Ministers should be careful about tinkering.
So much for the maths. What about the people? Health systems are full of intelligent, dedicated, educated folk who want to do a great job. That makes it really hard to manage them. Doing what the boss says is very low on their agenda; doing what they see as right is what drives them. They cooperate well with each other, but not with the system. This means they work best in an environment where there is real delegation, trust and a local or community focus. Centralisation (an endemic Wellington disease) is just doomed to fail in this culture.
What should the PM do? Relax about cashflow. Relax the centralised system and require a high level of delegation to local health systems, and proper consultation with clinicians. Fund primary care properly (to take the pressure off hospitals and Pharmac). This is where I would focus any extra money, because it’s the normal gateway to the system, and the more people can be sorted at the start of the health journey, the better. Provide robust IT that allows for a high degree of local cooperation and innovation. A bit more money, yes, but a plausible chance of actually helping things. It’s investment, not expense.
And accept two big facts: we have a growing and aging population. We haven’t built new hospitals for decades, while the population has grown and aged. The system is thus just overloaded physically (I don’t count the rebuilds in Christchurch and Dunedin). And medical science is in the midst of a dramatic revolution. It’s getting better. New Zealanders will want access to better care. That means having the political conversation about how that better care is to be paid for, through taxes, insurance, co-payments and so on. That would look like leadership. Today’s focus on cash flow and tax cuts looks like a group of middle managers wildly out of their depth. We deserve better.
Ian Fletcher is a former head of New Zealand’s security agency, the GCSB, chief executive of the UK Patents Office, free trade negotiator with the European Commission and biosecurity expert for the Queensland government. These days he is a commercial flower grower in the Wairarapa and consultant to the apiculture industry with NZ Beekeeping Inc.
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