Key Takeaways:
- Hospitals and public health services in New Zealand have been asked to find over $500 million in "efficiencies" to re-invest in patient care.
- The efficiency targets range from 2-4.9 percent across four regions, with the goal of reducing "waste" in back-office and procurement functions.
- The senior doctors’ union has expressed concerns that the cuts could impact front-line care and have already made it difficult for clinicians to care for their patients.
- The minister has stated that the targets will not be used to meet the projected 2025/26 deficit of $200m and will instead be used to improve patient care.
- Examples of efficiencies already realised this year include saving $6m in insurance premiums and reducing unused office space.
Introduction to the Efficiency Targets
Hospitals and public health services across New Zealand have been tasked with finding more than half-a-billion dollars in "efficiencies" to re-invest in patient care. This initiative was confirmed by Health Minister Simeon Brown in response to written parliamentary questions from Labour’s health spokesperson, Dr. Ayesha Verrall. The goal of this effort is to reduce "waste" in back-office and procurement functions, which could free up approximately $510 million to be re-invested in patient care and government health targets without reducing clinical staff.
Regional Efficiency Targets
The efficiency targets vary by region, with the Northern region aiming for a 3.7 percent reduction, the Midland region targeting a 2 percent reduction, the Central region aiming for a 4.1 percent reduction, and the South Island region targeting a 4.9 percent reduction. These targets are applied to "other operating cost" budgets, which do not include staffing budgets. The total amount to be saved is substantial, with the Northern region aiming to save $170 million, the Midland region targeting $55 million, the Central region aiming for $124 million, and the South Island region targeting $161 million.
Concerns from the Senior Doctors’ Union
The senior doctors’ union has expressed concerns about the impact of these efficiency targets on front-line care. Association of Salaried Medical Specialists executive director Sarah Dalton stated that the constant cost-cutting did not make sense and, in some cases, cost more money in the long run. Dalton argued that the so-called "back office" cuts had already made it difficult for clinicians to care for their patients. Furthermore, she pointed out that more of the health budget seemed to be spent on locums to fill the gaps left by staff shortages, outsourcing to private hospitals, and paying external consultants to do work that could and should be done by permanent staff.
Minister’s Response
Health Minister Simeon Brown responded to these concerns by stating that the budget was fixed and that the targets were simply about "making that budget go further for patients in their respective regions". He also assured that the targets would not be used to meet the projected 2025/26 deficit of $200 million. Brown provided examples of efficiencies already realised this year, including saving $6 million in insurance premiums, reducing unused office space, and improving the purchasing of medical supplies. However, the opposition remains skeptical, with Dr. Verrall questioning how Health NZ could identify specific "efficiency targets" without specifying exactly what should be cut.
Impact on Patient Care
The impact of these efficiency targets on patient care is a major concern. Dr. Verrall argued that $500 million was a massive amount to cut from health services, and that it was outrageous to say that this could be done without any accountability about where the cuts were coming from or where the savings would be re-invested. The senior doctors’ union has also warned that the constant cost-cutting could lead to a decrease in the quality of care provided to patients. As the health sector works to implement these efficiency targets, it will be crucial to ensure that patient care is not compromised and that the savings are indeed re-invested in areas that will benefit patients.
Conclusion
In conclusion, the New Zealand health sector is facing a significant challenge in finding over $500 million in "efficiencies" to re-invest in patient care. While the minister has assured that the targets will not impact front-line care, the opposition and the senior doctors’ union remain skeptical. As the health sector works to implement these efficiency targets, it will be essential to ensure that patient care is not compromised and that the savings are indeed re-invested in areas that will benefit patients. The success of this initiative will depend on the ability of the health sector to identify areas of waste and inefficiency, and to make targeted cuts that do not impact the quality of care provided to patients.