Speech to Association of Salaried Medical Specialists Conference, Te Papa, Wellington

Thursday, November 17, 2016 - 16:54


Thank you Dr Hein Stander for the introduction, it’s great to be here with you today. I’d like to acknowledge all the members of the ASMS.

General overview

Given recent international events, and that this is my final speech to ASMS before next year’s election, it’s appropriate to reflect on a few big picture observations.

We’ve seen some remarkable events and political turbulence around the world in recent months with Brexit in the UK and a divisive election in the US.

In an uncertain world that is still to lift itself out of the 2008 GFC crisis, New Zealand remains in a good position economically.

In 2008/09 our books changed from the Government roughly balancing its income, to losing around $18 billion in revenue due to the GFC and Christchurch earthquakes.

Rather than cut spending, we borrowed billions to protect and grow our health and education services, while implementing a strategy towards balancing our books.

Despite pessimism from critics, our plan worked. We are one of the few OECD nations who have lived within their means, and one of only four OECD nations succeeding in meeting the OECD measures that define a well-placed economy.

Our total crown revenue last year was $98.2 billion and total expenses were $95.5 billion - so we have for the first time since 2008, a surplus, and better forecasts of growing surpluses which gives us more options.

So overall New Zealand is in a good position. Our economy is forecast to grow by around 3.5 per cent a year. Growth at this level helps create jobs at a rate that keeps unemployment low – currently at 4.9 per cent. This helps to grow the government’s income, giving more options for funding services like health and education.

This also isn’t just the Government’s view, New Zealand’s strong position is reflected in many reports and surveys. For example, the Legatum Prosperity Index 2016, which ranks New Zealand first in the world in overall terms of prosperity, also ranks us as 12th in the world for health – up from 20th in 2008.

Of course, the Kaikoura earthquakes have shown how quickly things can change. While it’s too early to say what the dollar costs will be and the consequent impact, it doesn’t change the overall track that we’re on of earning more than we’re spending.

Health overview

Reflecting on the year in health, I believe we’ve continued to make good progress in a number of key areas – securing $568 million extra in the budget, implementing the Health Strategy, widening access to medicines, rolling out the national bowel screening programme, progressing the childhood obesity plan, as well as new mental health initiatives.

I recently met with KPMG Global Healthcare Centre of Excellence representatives. Their view is that New Zealand has one of the best performing health systems in the world, especially in terms of integration. They also commented how our health system is well funded, and we achieve good value for the spend we put in.

I’d like to reflect on some of the key issues affecting the sector, before commenting on the Government’s current priorities in health.

Clinical leadership

I want to take this opportunity to thank you for your hard work and the contribution you make towards improving health outcomes for New Zealanders. I know it’s not an easy job at times.

It’s vital that clinical leaders are part of the decision-making process, and help to drive forward improvements across the system.

This is an important message which I raise in my meetings with the sector, such as my recent discussion with the Australian and New Zealand College of Anaesthetists.

I am keen to further develop a culture where young consultants step up and get involved in management. I am looking at ways of making management more attractive.


I’m aware that the SMO collective agreement is currently under negotiation. It’s important that both sides maintain a constructive approach throughout this process.

In terms of RMO negotiations, my message to both parties is to get round the table to reach an agreement. I’m advised that the deal offered by DHBs offers significant improvements to pay and conditions for RMOs. It’s encouraging that the union has called off next week’s strike given recent events.

An additional priority is the ongoing negotiations over pay rates for around 50,000 workers in aged and disability residential care, and aged and disability home and community services.

I’m keen to see progress on this issue which has been going on for over a year. It’s very complex, involving a number of unions, government departments and providers.

Workforce capacity

DHBs invest significantly in our specialist workforce and there has been continued engagement on workforce capacity issues, particularly as part of the MECA negotiations.

I’m aware that working conditions have been raised by some as an issue, and a national forum on fatigue was held earlier this year.

Since 2000, the average hours of work for specialists, as self-reported to the Medical Council of New Zealand, has declined slightly over time.

The total number of specialists - public and private - practising in New Zealand has increased by nearly 80 per cent since 2000 – that’s around five and a half times the increase in New Zealand’s population.

Since 2008, the number of FTE specialists in DHBs has increased by over 1,100, and the DHB employed specialist workforce is currently increasing at around 140 per year.

DHBs are committed to being less reliant on overseas recruitment achieved in part through increases in the number of funded places for medical students and in the number of RMOs.

Leadership and guidance from specialists is essential in training RMOs to be the specialist workforce of tomorrow.

Health funding

Many of you will have heard this before, but I want to reiterate that health has remained this Government’s number one funding priority.

Budget 2016 delivers on that by investing an extra $2.2 billion in health over four years for new initiatives and to meet cost pressures and population growth.

The Government’s investment in health will reach a record $16.1 billion in 2016/17 – that’s an extra $568 million this year, the biggest single increase in seven years.

Claims that health funding has been cut are incorrect. This year New Zealand is forecast to spend 6.26 per cent of its economy, GDP, on health. Prior to this Government, the percentage of the economy spent on health was under 6 per cent.

Over the last eight years, health funding has kept up with demographic pressure and inflation.

We’ve also been focused on delivering results – ensuring that New Zealanders have access to more services.

Health challenges

Like many other countries, New Zealand faces some challenges – more older people are living longer, there’s a growing burden of long term conditions, and we need to keep up with new technology and expensive drugs.

We also need to do more to address health outcomes for some populations, notably Māori and Pacific people, those with mental health conditions or disabilities.

Health strategy

To successively deliver on the health aspirations of New Zealanders, you’ve got to have a clear direction for the system supported by the right level of funding.

One of the first things I did as Minister of Health was to ask officials to work on a clearly laid out direction for healthcare which resulted in the new Health Strategy which was released back in April.

The Health Strategy covers five themes - people-powered, closer to home, value and high performance, one team, and a smart system.

The five themes of the Health Strategy signal a focus on prevention and wellbeing, and more integrated services. At the same time we want to see support for innovation, better collaboration, and new ways of working to reach our most vulnerable. We want to give every child a healthy start, and ensure information and services are more accessible.

There are national programmes underway to deliver on the Strategy’s themes. Some are in the early planning stages, others are already making a difference to New Zealanders – for example the national telehealth service which I’ll talk about shortly.

There are also an increasing number of examples of local innovation. For example, Counties Manukau DHB has introduced a comprehensive health service at Papakura High School. It brings together general practice, mental health and a youth worker.

Social sector approach

Working more closely across social sector agencies is crucial to achieving better health outcomes, particular for supporting our most vulnerable New Zealanders.

It’s crucial we get a better understanding of people with complex needs and build services around them, rather than just dictate what they will receive.

We know these aren’t easy issues to solve. It’s clear that further, ongoing change is needed. Continuing to work together across the social sector is fundamental to this.

DHB appointments

I have also been focused on continuing the momentum of delivering better health services through the DHBs.

Next week I will be announcing the DHB Chairs and Board appointees.

You will see a further step towards the greater use of cross-chairing of DHBs, an approach which retains the Boards but improves coordination and the delivery of more informed decision-making and ultimately better, more integrated care for Kiwis.


In terms of the Government’s priorities on health, I want to ensure that more New Zealanders have better access to more services which are delivered closer to home.

Integrated primary and secondary care, with appropriate links to the social sector is vital. We also need to continue the focus on prevention and earlier intervention.

Implementing the Childhood Obesity Plan is a key focus. We’re one of the first countries in the OECD to have a target and a comprehensive plan.

We’re making good progress since the Plan was introduced a year ago. For example, 219 new decile 1–4 schools have signed up to the Health Promoting Schools programme, that’s 46 per cent above target.

Food and beverage industry groups have committed to developing solutions to reduce childhood obesity through an industry wide pledge.

Our position on a sugar tax hasn’t changed – it’s not something we’re actively considering but we’ll continue to keep a watching brief on the emerging evidence.

The health targets continue to be a priority. They are not just about numbers – they are about delivering better and quicker access to important health services.

Mental health is also top of the list. Mental health and addiction services are responding to increased demand.

Demand has increased from 2.3 per cent of the population a decade ago, to 3.5 per cent of the population in the last year – that’s an increase from around 96,000 people, up to 164,000.

We’ve increased mental health and addiction services funding from $1.1 billion in 2008/09 to over $1.4 billion for 2015/16. But there’s always more we can do and the Government continues to work on improving mental health services.

For example, Budget 2016 includes $12 million of funding over four years to increase support for people to access mental health services at an earlier stage.

Budget 2016 initiatives

Budget 2016 also invests an extra $124 million to widen access to medicines through Pharmac.

Pharmac’s budget for 2016/17 is a record $850 million. The Government has increased Pharmac’s budget by $200 million since 2008.

As a result of this funding, Pharmac has this year announced two new packages which include widened access to HPV and varicella vaccinations, two hepatitis C medicines, treatment for advanced melanoma, and patches for menopausal women.

The debate over funding Keytruda earlier this year won’t be the last. There will always be more to do to widen access to new and improved medicines given the continual rapid advancement in medicines and treatments.

There’s also $39 million in Budget 2016 for the start of the roll-out of the national bowel screening programme.

Preparations are well underway for the start of the screening programme in Hutt Valley and Wairarapa DHBs in 2017, followed by a progressive roll-out across the country.

Once fully implemented, the national screening programme is expected to screen over 700,000 people every two years. We know that bowel screening saves lives by detecting cancers at an early stage.

FSAs & elective surgery

Budget 2016 also invests an extra $96 million to provide more elective surgery. The growing pressure on elective surgery means we need to continue to do more – and that’s what the Government is focused on delivering.

Around one in ten Kiwis received a FSA in 2015/16. That’s a total of around 550,000 patients - a rise of almost 10,000 on the previous year, and an increase of around 119,000 patients over the last eight years.

In 2015/16, over 171,000 patients received elective surgery. That’s over 53,500 more surgeries over the last eight years – a 45 per cent increase.


Ophthalmology services are a recent example of the growing demand in patients requiring services, but this also needs to be seen in the wider context of how the availability of new treatments are also driving up demand, for example Avastin injections for macular degeneration.

While the majority of DHBs have largely been managing patients within clinically acceptable waiting times - three DHBs have been struggling. The impact on patients is unacceptable, and plans are in place to rectify this.

It’s vital that we maintain momentum and continue to deliver more services, and that’s what we’re doing.

Ophthalmology FSAs have increased from 45,000 in 2008/09 to nearly 56,000 in 2015/16 – nearly 25 per cent increase. Ophthalmology discharges have increased from 18,000 in 2007/08 to 23,000 in 2015/16 – a 28 per cent increase. Avastin injections have doubled from 4,000 in 2011/12 to 8,000 in 2015/16.

National Patient Flow

While clinical prioritisation helps to ensure the right patients are treated at the right time, there will always be patients who do not receive treatment.

We launched the National Patient Flow project to measure the outcomes of GP referrals to hospitals specialists for the first time. New Zealand is one of only a few countries collecting information of this kind at a national level.

The latest data shows that between October and December 2015, there were around 160,000 referrals for a FSA - 87 per cent of referrals were accepted.

Digital Health Work Programme

Developing a clear vision for the future of IT investment in health has also been a key priority.

E-Health solutions make the health system more efficient as well as delivering better health outcomes and providing integrated care closer to home.

The Health Strategy provides a framework for the next phase of the Digital Health Work Programme 2020 which builds on the National Health I.T. Plan.

The Digital Health Work Programme introduces a single electronic health record allowing individuals to communicate their health story, presenting health information in a single view that can be seen by patients and their care team, and will empower patients to take a more active role in their care.

It’s important the health information we collect about individuals and populations is shared with the broader social sector to inform future social investments, evaluate the impact of programmes and ensure the services provided by other sectors contribute to improving the health of all New Zealanders.

For information sharing and integrated services to work well it takes a team approach. They need to be developed and implemented with strong leadership from clinicians, working in partnership with patients and vendors.

National telehealth service

The national telehealth service is another good example of the potential of e-Health solutions.

The service was launched in November 2015 and is available 24/7, 365 days a year and can be reached through a range of channels.

It’s fair to say it’s the world’s first integrated platform providing seamless support and advice. The service brings together seven helplines – Healthline, Quitline, Gambling Helpline, Alcohol Drug Helpline, the Depression Helpline (and the National Depression Initiative services) and poisons and immunisation advice.

In its first year, the national telehealth service has helped around 425,000 New Zealanders via over 550,000 contacts to the service, that’s over one every minute.


In closing, I believe health is tracking well. New Zealanders are accessing better health services, but from time to time, as we’ve seen with ophthalmology, services aren’t good enough, and we have to address these issues as quickly as possible.

I believe in the health workforce team concept – from the Ministry, to senior specialists, to frontline receptionists, and health Board chairs – we are all working to deliver better services for New Zealanders.

I want to reiterate that the Government remains focused on continuing to increase access to more health services. I believe our commitment will continue to be reflected in next year’s Budget.

Thank you again for the opportunity to speak to you all today.