Statement of Intent 2006-2009

Table of contents:

From the Minister

Part 1: The Ministry of Health

Part 2: Environmental Scan and Strategic Direction

Part 3: Health Priorities for 2006/07-2008/09

Part 4: Developing and Maintaining Our Capability

Part 5: Statement of Responsibility

Footnotes

Part 2 Environmental Scan and Strategic Direction

In this section

• Introduction
• Key pressures on health and disability support systems
• Improving performance and value for money
• The Ministry’s contribution to the health of New Zealanders
• Government priorities to 2010–2016

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For every dollar that the New Zealand Government spends, 20 cents will be invested in the health and disability support system. The annual allocation for 2006/07 is $10,644.9 million (GST exclusive). This allocation funds the 21 DHBs and a vast array of services, in both urban and rural settings, delivered by a range of providers and an estimated 67,000 health workers in a variety of fields.

In a typical year, there will be:

• 15 million visits to general practitioners
• 40 million prescriptions discharged
• 620,000 hospital discharges for medical and surgical treatment
• 88,000 people accessing mental health services
• 414,000 cervical smears taken
• 350,000 free influenza vaccinations
• 61,000 free checks for people with diabetes
• 292,000 assessment, treatment and rehabilitation ‘bed days’ provided for some 14,000 people with disabilities or age-related disorders.

Key pressures on health and disability support systems
Health and disability support services worldwide are facing increasing costs, increasing demand and challenges in recruiting and retaining an appropriately skilled workforce. These pressures arise from demographic change, technological advances, societal expectations, addressing inequalities, the changing nature of communicable diseases, and workforce trends. Over the next few years some of these pressures are likely to intensify in New Zealand with slowing economic growth.

Demographic change
The key demographic changes affecting the demand for health and disability services are:

• reduced fertility rates and increasing longevity resulting in:
  – population ageing and increasing levels of chronic ill health
  – fewer children to care for aged parents, which, coupled with continuing high employment rates, further reduces families’ ability to care for members with chronic conditions and disabilities, as well as depleting the number of volunteer workers
• rural depopulation, resulting in higher costs in providing services in remote areas and the need to increase services in growing areas
• lifestyle changes, particularly relating to diet and exercise, which are also increasing the incidence of chronic ill health. Smoking and drug/alcohol abuse also contribute.

Technological advances
The rate of development and adoption of new health technology (including medicines) is growing rapidly internationally. Both medical practitioners and consumers have ready access to information on new technologies and create pressure for their adoption in New Zealand. The most significant technological changes impacting on the health and disability sector are:

• advances in IT systems, coupled with a growing demand for accurate and timely information for funding, planning and providing services, and for clinical decision-making
• advances in genetic services, which have been accompanied by an exponential growth in demand, resulting in high capacity and capability pressures (funding and workforce)
• the development of new health screening tools with resultant demand for publicly funded screening programmes
• organ transplants
• xenotransplantation and stem cell research
• robotic surgery (employing laparoscopes and electrically powered mechanical arms)
• multi-slice CT and PET (Positron Emission Tomography) scanning. Both are expensive new diagnostic technologies, which can be used to diagnose such conditions as heart disease and breast cancer
• newer, more expensive forms of chemotherapy
• continued development and use of stenting and angioplasty treatment for cardiac and peripheral vascular disease
• developments in synthetic blood products, which have resulted in a decreasing demand for products such as Factor VIII. This, combined with signalled price increases for plasma fractionation services provided to the New Zealand Blood Service, is threatening the viability of the service.

Societal expectations
There appears to be a growing expectation in New Zealand society that:

• access to new health technology will be publicly funded
• people with disabilities will be supported by publicly funded services to have similar opportunities to participate in society as able-bodied people (this is linked to funded access to new technology)
• the state will share responsibility with families and whānau for caring for relatives with chronic conditions/disabilities (including funding families for caring)
• public health and safety will be protected by publicly funded systems, including mandatory standards and legislation such as the Health Practitioners Competence Assurance (HPCA) Act 2003, and the Health and Disability Services (Safety) Act 2001.

Addressing inequalities
Despite overall improvements in the health of New Zealanders, the benefits of improved health care are not shared equally across population groups. Māori and Pacific peoples have poorer health than non-Māori, non-Pacific people, and people with low socioeconomic status have poorer health than people who are better off. Significant effort is required across the health and disability sector and other sectors to reduce these differences because the causes of inequality are complex.

Responding to the changing nature of communicable diseases
This includes being prepared for potential pandemic events, as well as routine surveillance and enforcement of public health legislation relating to environmental health and communicable diseases.

Workforce trends
There are labour shortages across a range of health competencies. Particular areas of concern are:

• primary health care
• disability support practitioners and support workers
• the decreasing number of voluntary workers, particularly in areas such as emergency ambulance services in rural areas.

Strategic response to cost and volume pressures
In addition to longer-term health and disability strategies and in order to respond to the above pressures within the health and disability support system, the Ministry has identified a number of priorities and initiatives for 2006/07 and beyond. These priorities for the health and disability sector are also communicated to DHBs via the Minister's letter of expectations for 2006/07 and are explained in detail on pages 28 to 67.

• Primary Health Care, Getting Ahead of the Chronic Disease Burden, Health of Older People and Child and Youth Services:

– focusing on illness prevention and early intervention initiatives
– working within a ‘continuum of care’ framework in which service provision is co-ordinated and flexible.

• Health Infrastructure and Workforce:

– improving information for clinical and financial decision-making
– workforce development and fl exibility.

• Cost-effectiveness, Quality and Safety, Elective Services:

– reviewing services and prioritising funding to achieve the best use of available resources
– identifying new technology and managing its impact (in terms of both health gain and cost).
Improving performance and value for money
The Ministry and broader health sector have engaged in a diverse and many layered approach to obtain value for money. This includes supporting evidence-based policy and clinical practice, developing information systems that support performance measurement, conducting review processes for new investments, periodically reviewing major service areas, managing high demand through needs-based resource allocation, controlling price and supply through procurement strategies, and making optimal use of the available health workforce.

Optimising the available health workforce means that we are making full use of health workforce skills. For example, many believe that practice nurses are underutilised and could perform many more complex tasks than they are called upon to do. Similarly, GPs could take on some of the tasks that specialists now perform (eg, skin lesions). Also, new (lower cost) workers could be introduced to perform specific tasks that are now handled by doctors and nurses.

The Ministry has committed to undertake a service area review in cardiovascular disease and diabetes because this area meets the four criteria established by the Director-General’s Performance Assessment and Management (PAM) Steering Group for determining high priority areas: the area has a significant disease burden; New Zealand’s performance does not compare well with like countries; there are significant variations in DHB performance; and the area is
amenable to change in the short or medium term.

In February 2006, Cabinet agreed that a programme of expenditure reviews occur in 2006 and that the Cabinet Committee on Government Expenditure and Administration (EXG) would oversee these reviews. Cabinet agreed that the health sector be reviewed with a view toward ‘lifting productivity and improving performance management processes in specific health areas’. The guidance further describes the scope of the review to include the role of the Ministry of Health in setting priorities, making resource allocation decisions, improving sector performance, and reviewing specific health interventions.

Building on the work of the PAM Steering Group, the Ministry will examine existing priortisation processes and performance management programmes to assess what further improvements can be made in line with EXG expectations. As described later in the document, the Ministry has committed to a service review of cardiovascular disease and diabetes, which will incorporate the principles embedded in the EXG guidance. Additional service reviews will be proposed during the course of the EXG review.
Table 1: Summary of Ministry efforts to achieve value for money in the health sector

Dimension	Strategy
Evidence-based policy and practice	Service area reviews New Zealand Guidelines Group
Information system improvements	Improving NHI uptake Implementing Health Practitioner Index New national collections for outpatients, primary care and mental health
Review and approval of new investments	Service Planning and New Health Intervention Assessment: Framework (SPNIA) Collaborative ‘horizon scanning’ activities with Australia Pharmacology and Therapeutics Advisory Committee (PTAC) National Capital Committee Prioritisation process
Management of demand	Population-based funding formula (PBFF) PHO capitation formulas Pharmaceutical and laboratory utilisation review Pharmaceutical and laboratory expenditure indicators
Management of supply and price	PHARMAC drug purchasing strategies Contracting strategies for national services
Health workforce optimisation	Use of community health workers Ageing-in-place pilots Nurse prescribing
DHB monitoring and focused reviews	District Annual Planning (DAP) process Indicators of DHB Performance (IDPs) Hospital Benchmarking Information (HBIs) DHB reviews Monitoring and Intervention Framework (financial)

Building on these efforts, the Ministry is committed to:

• adopting quantifiable targets for sector-wide performance
• reviewing major service areas
• improving the interface between primary and secondary sectors to ensure a co-ordinated, holistic approach to care management
• providing more oversight and management of DHBs that are not achieving health outcome targets
• providing incentives DHB performance to achieve health gains consistent with current incentives for prudent financial management
• optimising use of the health workforce by promoting use of new types of health workers and new roles for current health workers within a team environment.

The Ministry’s approach to value for money is led by the Director-General’s PAM Steering Group. The group has overseen the development of ‘headline’ indicators for the health sector and strategies to manage sector performance in line with health outcome goals. This approach is explored further in the next section ‘The Ministry’s contribution to the health of New Zealanders’.

The PAM Steering Group assists the Ministry to achieve value for money by providing advice on the selection of high-level priorities and targets to aid the monitoring of DHB performance. The PAM Steering Group also performs an important function in advising District Health Boards New Zealand (DHBNZ) on the Future Workforce Project to optimise the use of the health workforce.

The Ministry’s contribution to the health of New Zealanders
The Ministry contributes to improving health and independence through the provision of advice to government, influence on and relationships with DHBs, practitioners, iwi and Māori organisations, Pacific communities, providers, NGOs, other government sectors and the public. The Ministry also manages the provision of funding for some services that have not been devolved to DHBs. The Ministry’s aim is to ensure that the health and disability support system works for New Zealanders. Achieving this means having a clear overview of the design, function and focus of the system, its strengths and weaknesses, and a thorough understanding of how appropriate change can be effected.
The Ministry’s outcomes framework clarifies its contribution to the goal of Healthy New Zealanders and guides future activities. This framework is designed to show the way the Ministry influences the health and disability support system and how we use this influence. It is also identifies the critical outcomes within the control of the sector that we believe we need to influence the most.

The conceptual link between the Ministry, the whole health and disability support sector and the overall goal of Healthy New Zealanders is demonstrated in the Ministry’s outcomes framework (set out in Figure 3 below). The outcomes framework, reflects the directions established by the two overarching strategies, the New Zealand Health Strategy and the New Zealand Disability Strategy.

The outcomes framework has three outcome levels that are logically connected.

• Ministry outcomes – ensuring the system works for all New Zealanders. These are outcomes that reflect the levers the Ministry has available to it to achieve a well-functioning health and disability support system. These outcomes are largely determined by the functions the Ministry performs.
• System outcomes – a fair and functional health system. These are outcomes that reflect the health and disability support system’s achievements, encompassing how people access services, the quality and effectiveness of services, the extent to which the system uses public resources in the best way and how the system interacts with other sectors to enhance health and independence outcomes.
• Societal outcomes – healthy New Zealanders. These are the health and disability support outcomes valued by the Government and citizens, which are necessary for healthy New Zealanders. They are influenced by the health and disability support sector and broader activities of the Government and society.

The priority areas for 2006/07 identified within the next section link these outcome levels by clarifying the Ministry’s role in terms of contributions to system and societal outcomes to improve overall health outcomes via specific initiatives.

Indicators that measure progress towards these outcomes are listed at the end of each priority section.

A key part of the managing for outcomes framework is the movement towards measuring the impacts of an organisation’s activities and services on the outcomes it aims to achieve. This is relatively easy for direct service delivery roles but more difficult for policy services and other, less direct, influences on outcomes.
For the Ministry, this issue is further complicated by the likely time lags between specific actions and services and the flow-on effects on health outcomes. The impacts of some developments in service delivery may not be noticeable for years. Progress against these indicators will be reported annually but we do not expect to see improvement in many of them over a 12-month period. The cycle of data collection can also be lengthy, with some indicators being updated only every three to five years.


Figure 3: The Ministry of Health's outcomes framework



Performance assessment and management
Value for money underpins the Ministry’s approach to outcomes management. The Ministry’s outcomes hierarchy includes four societal outcomes (better health, reduced inequalities, better participation and independence, trust and security) and five health system outcomes (equity and access, quality, efficiency, effectiveness, and intersectoral focus).

The Director-General’s PAM Steering Group, which includes representatives from the Treasury, DHBs, and Ministry, has given added focus to achieving value for money. Formed in early 2005, the PAM Steering Group’s achievements in its first year have included: the development of a set of more than 40 ‘headline’ indicators across all nine outcome areas, a review of DHB reporting requirements that has resulted in a streamlined DAP process and reduced compliance costs for DHBs, and initial work on the development of a suite of productivity indicators.

The PAM Steering Group goals for 2006 include agreement on productivity indicators by July 2006 with a view to incorporation in accountability documents by 2007/2008, and a systematic process for ensuring that effective outcomes management strategies are employed throughout the Ministry and DHBs.

Back to topPerformance assessment
The headline indicators are an example of performance assessment activities within the Ministry. By definition, they only include a subset of indicators, particularly those that signal the direction for the sector toward achieving outcome goals. Within each programme area, there are additional indicators that provide focus to health sector efforts.

Primary health care is one particular area where the Ministry and sector have formalised performance assessment and management activities. The PHO Performance Management Programme, which was launched in January 2006, includes indicators of PHO performance across four of the five Ministry outcome areas.

The Leading for Outcomes (LFO) programme is working to develop indicators and performance assessment processes for chronic disease. For example, LFO has examined the evidence to support the indicator for diabetes management (HBA1c levels at or below 8 percent) that is part of the PHO and DHB indicator sets.

All directorates within the Ministry are developing performance assessment processes. The Mental Health Directorate has launched the MH-SMART initiative that aims to support mental health providers to integrate consumer outcome measurement into routine practice. These outcome measures form part of the proposed key performance indicator (KPI) framework for mental health services. This KPI development is a joint initiative between DHBs and the Ministry, and the proposed framework is scheduled for completion in February 2007.

The Ministry has launched Investment in Public Health in New Zealand (IPH), which aims to improve the economic evidence base for public health activities.

The Indicators of DHB Performance (IDPs), described in the previous section, are the primary way of assessing DHB performance against outcomes. Increasingly, the IDPs are being guided by the work of the PAM Steering Group. In 2006/2007, DHBs will report on activity against the headline indicators.

Based on the results of two workshops held in 2005, there appears to be general agreement on the types of productivity indicators that could be developed and the issues involved in developing them. Productivity indicators for inpatient and outpatient hospital care are thought to be feasible in the near term, while productivity measures in other service areas may take a couple of years due to the lack of appropriate data. The Ministry is committed to reaching agreement on these indicators by July 2006.
Performance management
In 2006, the PAM Steering Group has signalled its intention to identify and develop management strategies to influence sector performance. In some respects, this means building upon work that is already under way. As noted previously, some parts of the Ministry have developed outcomes management strategies for the particular service areas they oversee.

While there are numerous approaches to outcomes management described in the literature, the essence of these approaches is to identify those factors that drive performance and the interventions that make the most difference in improving performance. This ‘intervention logic’ ties together the sometimes far-reaching outcomes with activities and outputs using the best available evidence.

Because of the broad scope of the health system, it is important to focus on particular parts (or subsystems) such as primary care, mental health, disability support and so on. Managing change will take different forms depending on the area. Hence, the focus of the outcomes management work will be to articulate the intervention logic as it relates to Ministry outcomes across a variety of programme areas.

Our aim is to embed this outcomes management thinking in Ministry planning and evaluation processes. By extension, this will entail changes in the management of DHBs, PHOs and other health providers, because they are critical to achieving health sector goals.

The work of the PAM Steering Group will create some immediate results in terms of sharpening the Ministry’s focus on value for money. By July 2006, the PAM Steering Group will have developed:

• a suite of productivity measures applicable to many health service areas and capable of being used in managing Ministry programmes and DHBs
• an agreed outcomes management framework for use across the Ministry and DHBs.

Cost effectiveness
In 2006/07 the Ministry intends to use cost per output in DHB provider arms as a measure. This will contribute to information on health sector cost-effectiveness. We also intend to look at cost per output in other areas of the health sector once suitable methodologies and data availability have been considered. Cost per output will be viewed against measures of health gain to ensure that health gain is not sacrificed at the expense of efficiency.

Government priorities to 2010–2016
On 6 March 2006 Cabinet agreed that the following themes would constitute the Government priorities for the next decade:

• economic transformation
• families – young and old
• national identity.

The outputs of the Ministry most closely align with the families – young and old theme. Cabinet noted that this theme could be usefully approached using the following sub-themes:

• strong families
• healthy confident kids
• safe communities
• better health for all
• positive ageing.

The Ministry’s strategic initiatives for 2006/07 and beyond and long-term strategies link strongly to four of these sub-themes: strong families, healthy confident kids, better health for all, and positive ageing.

Details of the Ministry's strategic initiatives and priorities can be found on pages 28 to 67.
Strong families
He Korowai Oranga: Māori Health Strategy links to this sub-theme.

Healthy confident kids
The Ministry priorities for 2006/07 and beyond that link to this sub-theme are:

• hearing tests for neonates
• newborn metabolic screening programme
• antenatal HIV screening
• antenatal screening for Down’s syndrome
• Well Child services
• strengthening oral health services for young people
• child and adolescent mental health services
• primary health care for under-sixes.

The Ministry is also involved in collaborative initiatives with the Ministry of Social Developement concerning family violence prevention.

There are a number of long-term strategies, that also link to this sub-theme. These are:

• New Zealand Health Strategy
• New Zealand Disability Strategy
• He Korowai Oranga: Māori Health Strategy
• Mental Health Strategy
• Primary Health Care Strategy.

Output class linkages
The above Ministry priorities for 2006/07 and beyond are delivered through the following output classes:

• Clinical Services
• Management of National Screening Programmes
• Mental Health.

All output classes connect to progressing longer-term strategies.

Better health for all
The Ministry priorities for 2006/07 and beyond, that link to this sub-theme are:

• cancer control
• colorectal cancer screening
• BreastScreen Aotearoa capacity
• cardiovascular disease/diabetes
• Healthy Eating–Healthy Action
• tobacco control
• reducing alcohol use
• service gaps for chronic medical conditions
• primary care – low-cost access
• primary care – focus on prevention and early detection
• primary care – broaden range of professionals involved in continuum of care
• national systems review
• National Cervical Screening Register – replacement register
• health workforce information programme
• implement new entry to practice programme for nurses
• development of national non-admitted patients collection
• workforce action plans
• workforce education and training
• maternal and newborn information system development.

There are also a number of long-term Ministry strategies, that also link to the better health for all
sub-theme. These are:

• New Zealand Health Strategy
• New Zealand Disability Strategy
• He Korowai Oranga: Māori Health Strategy
• Mental Health Strategy
• Health of Older People Strategy
• Primary Health Care Strategy.

Output class linkages
The above Ministry priorities for 2006/07 and beyond are delivered through the following output classes:

• Clinical Services
• Disability Services
• DHB Funding and Performance
• Information Services
• Management of National Screening Programmes
• Māori Health
• Mental Health
• Public Health
• Sector Policy.

All output classes connect to progressing longer-term strategies.
Positive ageing

The Ministry priorities for 2006/07 and beyond that link to this sub-theme are:

• implementing the Health of Older People Strategic Plan
• income and asset testing legislation
• ageing in place
• improving the quality and safety of services for older people
• assessment
• sustainability of services.

There are a number of long-term strategies, that also link to this sub-theme. These are:

• Health of Older People Strategy
• New Zealand Health Strategy
• New Zealand Disability Strategy
• He Korowai Oranga: Māori Health Strategy
• Mental Health Strategy
• Primary Health Care Strategy.

Output class linkages
The above Ministry priorities for 2006/07 and beyond are delivered through the following output classes:

• Sector Policy.

All output classes connect to progressing longer-term strategies.