2016/17 Estimates for Vote Health
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1 2016/17 Estimates for Vote Health Report of the Health Committee Contents Recommendation 2 Introduction 2 Mental health services 2 Disability support services 4 National Bowel Screening Programme 4 Burwood Hospital Birthing Unit 4 Cost pressures 4 Primary health care 5 Ageing population 5 Role of technology 5 National Health IT Plan 6 Structural changes at the ministry 6 Appendix 7
2 Vote Health Recommendation The Health Committee recommends that the appropriations for the year ending 30 June 2017 for Vote Health, as set out in Parliamentary Paper B.5, Vol. 6, be accepted. Introduction The appropriations sought for Vote Health increase by 4.8 percent to $ billion in 2016/17 from estimated actual spending of $ billion in 2015/16. About threequarters of the appropriations sought are for population-based funding provided to the 20 district health boards (DHBs). Vote Health is the second largest vote after Social Development, making up 17.9 percent of the total 2016/17 appropriations in Budget It is the largest vote by output expenses, accounting for 49.6 percent of the total Estimates appropriations for output expenses in Budget The Budget proposes a total of $ million for new operating initiatives for Vote Health in 2016/17, and $2.222 billion over the forecast period. Mental health services Canterbury psycho-social recovery Responsibility for Christchurch s post-earthquake psycho-social recovery has been transferred from the Canterbury Earthquake Recovery Authority to the Ministry of Health and Canterbury DHB. In March 2016, following the 14 February earthquake, the Government provided a further $20 million over three years for mental health support services in Canterbury. This funding is for 27 more primary care and community-based mental health workers and existing programmes, such as telehealth and workforce wellbeing. The Minister and ministry monitor mental health services in Canterbury closely. We heard that those involved in the psycho-social recovery in Christchurch were increasingly concerned about the mental health of young people. The advice from the DHB and primary health organisation was that this group needs a lot more support. Some of us are concerned about the time it took for this increased funding, given that the Government had been told for several years about the pressure on Canterbury s mental health services, and we remain concerned that it is insufficient to meet the demand. The Minister told us that the Government has been focused on Canterbury since the earthquakes. He said that people have had access to services but the issue had been how they were funded. In November 2015, the Government provided $16 million in deficit funding so that the focus could shift to ongoing service provision. The Minister said that the Government remains committed to supporting Canterbury in its psycho-social recovery. 2
3 Waikato DHB 2016/17 ESTIMATES FOR VOTE HEALTH We were concerned to hear about the death of Nicky Stevens while in inpatient care in the Waikato DHB. The Director of Mental Health at the ministry used his statutory powers under section 99 of the Mental Health (Compulsory Assessment and Treatment) Act 1992 to inspect mental health services at Waikato DHB. The inquiry, although not specifically into Mr Stevens death, identified a number of systemic issues at the DHB. These included low staff morale, understaffing, not filling vacancies, paying under the national price for services, and incorrect staff-to-patient ratios. We asked if the Minister considered it acceptable that the DHB still has not initiated an inquiry more than a year after Mr Stevens death. The Minister told us that a set of other inquiries had to take place and he believed the more important task was to ensure that this situation did not happen again. The director told us that the Police legal team had been clear that its criminal inquiry took precedence over the ministry s inquiry. The police needed to interview staff and it would have been difficult for the ministry to conduct interviews without prejudicing the police investigation. The director told us that the DHB is ready and willing to conduct an inquiry when the police investigation has been finalised. We will monitor this issue closely. National inquiry Some of us are concerned about the state of mental health services in New Zealand. This follows several suicides in inpatient care, recent media coverage of the inappropriate use of seclusion, an inquiry into mental health services in the Wellington region, and issues at Southern DHB. We asked what it would take for the Minister to initiate a national inquiry into the adequacy and quality of mental health services in New Zealand. The Minister told us that overall mental health services in New Zealand are good but there are parts which need attention. He acknowledged that there have been several recent high-profile cases and that lessons need to be learnt from them. The Minister disagreed that there has been inappropriate use of seclusion because seclusion hours have decreased nationally over time and he has received advice that it has been used appropriately. The Mental Health Commission, which monitored the whole system, was disestablished by the previous health minister. Some of us are concerned that this entity has been replaced by a single person with a complaints focus, and that there has not been a corresponding increase in the ministry s mental health capacity. This means that there is no one with the capacity to look at the adequacy of the mental health system. The Minister told us that there is a well-established process for those who have complaints about the system. He believes that the decision to disestablish the Mental Health Commission was the correct one. Some of us believe that the Mental Health Commission should be re-established. Community capacity In a Budget statement on 16 May, the Minister indicated that demand for mental health services had increased by 21 percent in the past five years. We note that the capacity of inpatient beds has decreased slightly over this time, and asked if it is because the increased demand is at the community, rather than hospital, level. The ministry has encouraged DHBs to provide more mental health and addiction services in the community as an alternative to inpatient specialist beds. The Government has invested about $35 million annually in primary mental health services to improve access to talking therapies and other psycho-social responses. Other recent investments include about $15 million over four years to provide 40 new full-time 3
4 equivalent staff in regional Youth and Forensic Community Services, and $18.2 million over four years for specialist and community services for new mothers with mental health or addiction issues. Disability support services The Budget includes new funding of $ million in 2016/17 and out-years for disability support services. We heard that in June 2015 a shortfall of $45 million was forecast for disability support services. We were told that the final shortfall was not as high as forecast because the uptake of the Funded Family Care policy was lower than projected. A response to supplementary Estimates questions states that the expected shortfall of $45 million for disability support services has been significantly reduced because of careful demand management by the Needs Assessment and Service Coordination (NASC) services. We asked whether any policy changes lay behind this management of demand. We heard that the sleepover and funded family carer settlements and the new model for disability support services had changed client and provider behaviour, resulting in cost increases. However, NASC services have saved $8.2 million by examining what services are delivered and to whom; also, some of the cost pressures were less than expected. We subsequently heard that disability support services are not forecast to be overspent at year end. Some of us are not satisfied with the ministry s explanation as to what the shortfall was and where the money came from to fill the shortfall. National Bowel Screening Programme The Budget includes $ million across three appropriations in 2016/17 for the establishment of a national bowel screening programme. This is an extension of the pilot programme run at Waitemata DHB. Hutt Valley DHB and Wairarapa DHB are the first two DHBs to be involved in the programme at this stage. We asked about the concerns raised in the Treasury s assessment of the National Bowel Screening Programme. We were told that the ministry does not support the Treasury s performance assessment. The Minister has received assurances from the ministry that the programme can be delivered within the agreed timeframe and budget. We asked why Southland was not considered in the initial roll-out given its ageing population and high death rate from bowel cancer. The Minister told us that the decision was based on which DHBs were able to implement the service immediately. We heard that there will be a phased roll-out in the other DHBs over the next three years. We intend to monitor the progress of the roll-out. Burwood Hospital Birthing Unit In 2008, the Government made a commitment to provide more birthing units. We asked why the Burwood Birthing Unit is closing in Christchurch East. The Minister understands that the unit is not structurally safe, and that the DHB is looking for a new, central location in Christchurch. Cost pressures In 2013, the Treasury provided advice to the ministry that using the labour cost index (LCI) and the consumer price index (CPI) did not reflect the actual cost pressures in health. We asked what work the ministry has done on developing a more detailed depiction of the cost pressures on health. The ministry believes that the LCI and CPI are useful when 4
5 considering the likely scale of whole-of-system costs. It also considers the DHB s overall financial position and the general performance of the health system. The ministry told us that the largest cost pressure on DHBs is increases in service demand, which is modelled using service and population data. Wages are also a major pressure for DHBs. The DHBs consult with the ministry as part of the bargaining process for the various Multi Employer Collective Agreements. Some of us were not satisfied with the response that we received on what work the ministry is doing to develop a more detailed depiction of the cost pressures on health. Primary health care The appropriation for Implementing the Primary Health Care Strategy has increased from $180 million to $186 million in the Budget. We note a recent article in a local doctors magazine in which the PHO Alliance and the Chair of the General Practitioners (GPs) stated that they expected an increase of $20 million to $26 million to cover their funding shortfall. The Minister told us that there are always people in the sector who would like more funding. He considers that primary health care is an important part of the Government s health strategy. Spending in the past eight years has increased from $650 million to $850 million, and free GP visits have been provided to children under the age of 13. Ageing population New Zealand s population is ageing as people increasingly tend to live longer. We were interested in future workforce planning in aged care because demand for these services will grow. The Minister agreed that the models of care and how aged care services are delivered need to change. The updated New Zealand Health Strategy, and forthcoming update of the Health of Older People Strategy, both focus on keeping people better for longer in their own homes. We look forward to reading the updated Health of Older People Strategy. We were interested in the Government s and ministry s future plans for addressing the ageing population. We heard that the New Zealand Health Strategy encourages people to take control of their own health. An example of this is people using electronic data and information to monitor their own glucose levels. The mobility action team, which launched last year, is a $16 million programme aimed at postponing the need for joint surgery. A multidisciplinary team including nurses, GPs, rheumatologists, and dietitians, identifies if a person is suffering from joint problems. The team then provides a range of measures in the community to improve the person s joint health. Some of us remain concerned that these measures will be insufficient to meet the need. Role of technology We asked about the role of technology in removing the need to travel long distances for healthcare. The Minster said this is already happening, noting that West Coasters go to Grey Base Hospital and have real time, face-to-face consultations with clinicians in Christchurch, reducing the need for travel. He anticipates that in the future people will visit local facilities and link to a specialist in a larger centre via camera and broadband. In Waikato, developers are working on a range of applications that will enable people to talk to clinicians from their homes, using hand-held devices. The Minister believes that this type 5
6 of technology will make the system more efficient and sustainable. We look forward to hearing updates about these applications. National Health IT Plan Action 26 of the updated New Zealand Health Strategy is to develop a national electronic health plan. This was identified as a priority in the National Health IT Plan five-year update, which the Minister launched in November We heard that the ministry is working on an electronic health record that will capture information from all of the DHBs. The Minister told us that the strategy and vision have been established, and now business cases have to be completed. He said that this work is on schedule. Structural changes at the ministry The Director-General of Health told us about changes to the structure of the executive leadership team at the ministry, which will help to guide the direction of the New Zealand Health Strategy. Several new roles have been created to allow the ministry to work better with other government agencies to improve health outcomes, and to recognise the opportunities for healthcare presented by improvements in technology. These new roles allow greater emphasis on strategy over policy, and on advances in genomics and robotics. 6
7 Appendix Committee procedure We met on 15 and 29 June 2016 to consider Vote Health. We heard evidence from the Minister of Health, and the Ministry of Health, and received advice from the Office of the Auditor-General. Committee members Simon O Connor (Chairperson) Jacqui Dean Kevin Hague Hon Annette King Barbara Kuriger Dr Shane Reti Scott Simpson Barbara Stewart Poto Williams Evidence and advice received In addition to the standard Estimates documents, we considered the following evidence and advice during this examination: Briefing paper for Vote Health, prepared by committee staff, dated 13 June Minister of Health, Response to additional questions (1 178), received 13 June Minister of Health, Response to post-hearing questions ( ), received 27 June Minister of Health, Response to standard Estimates questionnaire. Office of the Auditor-General, Briefing on Vote Health, received 13 June
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