Co-ordinated Care for Maori: Issues for Development

Date of publication: October 1998

This report was prepared for Te Kete Hauora, the Maori Policy Unit of the Ministry of Health, by Coopers & Lybrand. The views expressed in the report are those of the authors and not necessarily those of the Ministry of Health.

ISBN 0-478-09425-6

First published in 1995 by
Te Kete Hauora
Ministry of Health
PO Box 5013
Wellington


Contents

Foreword
Te Whakapuakitanga

Preface
Te Kupu Whakataki

Introduction

Present Environment
Effective Health and Disability Support Services for Maori
Definition
A Maori Perspective
RHAs' Views
The Benefits and Risks
Current Initiatives

International Experience
Australia
United States of America
Canada
Scandinavia
Conclusions

Issues
Enrolment Criteria
Cream Skimming
Funding Formula
Proving Membership
Cost-Shifting
Restrictions on the Use of Health and Disability Funding
Transaction Costs
Ability to Manage Risk
Management Capacity
Implementation Time-Frame
Accountability

Summary

Bibliography



Foreword
Tenei te mihi atu a te Manatu Hauora ki a koutou. Ka mihi ki o tatou aitua maha i hinga atu nei i tenei tau. Haere koutou i te ara whanui. Waiho ake te aroha i muri nei. Haere, haere atu ra.

E mihi atu hoki tenei mo nga reo, mo nga karangatanga maha o nga mata waka. No reira, tena tatou katoa.

This report provides a Maori perspective to the new co-ordinated arrangements that are being put in place. The health sector recognises that an innovative approach to contracting will contribute to achieving the Government's health objectives. The new arrangements for co-ordinated care have the potential to focus health care in an integrated way toward preventive and primary care that is aligned with the Maori holistic view of health. It can increase responsiveness to Maori needs and empower Maori to take responsibility for their own health.

Issues raised in this report are pertinent to the development of co-ordinated care arrangements and the appropriate environment in which they can achieve health gains for Maori. They are intended to inform purchasers and providers and provide a reference point for future work.

In the Policy Guidelines 1996/97, Government has reaffirmed and strengthened its objective to improve Maori health status and to reduce the disparity between the health status of Maori and non-Maori. The achievement of these objectives can be more assured when all participants in the health sector collaborate in resolving the issues raised here.

As concluded in the report: there is a high degree of congruence among the aims and aspirations of Maori, RHAs and the Ministry ... an appropriate policy environment offers a means to meet those aims and aspirations.

I look forward to seeing the realisation of those aims.

Karen Poutasi
Director-General of Health



Te Whakapuakitanga
Tenei te mihi atu a te Manatu Hauora ki a koutou. Ka mihi ki o tatou aitua maha i hinga atu nei i tenei tau. Haere koutou i te ara whanui. Waiho ake te aroha i muri nei. Haere, haere atu ra. E mihi atu ana hoki ki nga reo, ki nga karangatanga maha o nga mata waka. No reira, tena tatou katoa.

Kei roto i te purongo nei te tirohanga a te iwi Maori ki nga whakahaere hou hei kotuitui i nga kaupapa kua whakaritea. E noho pumau ana te wahanga hauora ki te aria ma nga huarahi auaha ki te waihanga kirimana e whakatutuki nga whainga mo te hauora a te Kawanatanga. He tikanga maiatanga kei roto i nga whakahaere hou nei mo te kaupapa kotuitui tiaki tangata hei whakahangai, hei whakatopu i nga kaupapa me nga huarahi hei wawao moata i te mate, a, hei whakahaere tiakitanga hauora tuatahi hoki e hangai ana ki te tirohanga whanui a te Maori ki te hauora. Ma enei whakahaere hou e whakapiki ake nga uruparetanga ki nga uaratanga hauora a te Maori, a, e whakamana hoki i te iwi Maori kia ahei ai ratou ki te pikau i nga kawenga mo o ratou ake take hauora.

E whai panga ana nga take i ara ake i roto i te purongo nei ki te ahua o te waihanga i nga whakahaere hei kotuitui i nga huarahi tiakitanga, me te taiao hoki e tika ana hei whakatutuki i nga hua hauora mo te Maori. Ko te tikanga ka noho ma nga whakahaere hou nei e whakatakoto nga whakaaturanga mo nga kaihoko me nga kaituku ratonga, a, ma enei ano hoki e whakatakoto he waitohu whakapuakanga mo etahi atu mahi i nga ra kei te heke mai.

He mea whakapumau ano, a, he mea whakapakari hoki na te Kawanatanga i roto i ana Aratohu Kaupapahere mo te tau 1996/97, tana whainga mo te whakapai ake i te ahua o te hauora o te Maori, me te whakaheke iho i te rereketanga o te ahua o te hauora i waenganui i te Maori me nga mea ehara i te Maori. Ma te mahi tahi o te katoa o nga hunga kei roto i te wahanga hauora ki te whakatau i nga take i puta ake i konei, ma tanei ahuatanga e tino mohiotia ai ka tutuki nga whainga nei.

Ara, e ai ki nga kupu whakamutunga o te purongo: he tino rite tonu nga whainga me nga wawata o te iwi Maori, o nga Mana Whakahaere Hauora a-Rohe me te Manatu. ... ara, kei nga kaupapa here e tika ana te huarahi hei whakatutuki i aua whainga me aua wawata.

Ko taku tumanako kia tutuki enei whainga.

Karen Poutasi
Te Pou Whakahaere, Manatu Maori



Preface
E nga mata waka, e nga mana, e nga reo, tena koutou katoa.

The work programme of the review of new arrangements for co-ordinated care would not have been complete without an investigation of how these arrangements could be developed so that Maori have the opportunities to benefit from these arrangements - as providers and users of the public funded health system.

This report looks at what the options may be for Maori to increase our participation in the health sector and explores the long term direction that Maori want to take in the health sector.

As the new co-ordinated care arrangements are at the developmental stage, articulation of the issues that can affect the proper and successful development of these arrangements for Maori and by Maori is necessary. The implementation and policy issues, some of which are at the forefront of Maori concerns as providers, are critical for us in safeguarding and monitoring the future. Enrolment and registration, equitable funding formulae, risks sharing and transaction costs are some of the issues important to successful development of co-ordinated care.

This intensive project would not have been possible but for the efforts of Sam Rolleston of Whakatupu Education Consultancy, Sarah Prentice and Phillip Davie of Coopers and Lybrand Consultants. The project of course owes its life and breath to the participation of Maori providers who generously shared the information with us and who spared their time for this project. The completion of this report was possible due to the effort of all.

Nau te rourou, naku te rourou, ka ora te tangata.

Kim Workman
General Manager



Te Kupu Whakataki
E nga mata waka, e nga mana, e nga reo, tena koutou katoa.

E kore e oti tika nga kaupapa mahi hei arotake i nga whakahaere hou hei kotuitui i nga tikanga tiaki tangata mehemea kaore i ata tirohia nga huarahi hei waihanga i nga ahuatanga kia whai hua ai te iwi Maori mai i enei whakahaere - ara, hei kaituku ratonga, a, hei kaiwhakamahi hoki i nga rawa o te punaha hauora he mea utu ra te tahua-a-iwi.

E titiro ana te purongo ki nga tikanga mo te iwi Maori hei whakapiki ake i nga huarahi mo tatou i roto i te wahanga hauora, a, e hopara ana hoki i nga whainga roa a te iwi Maori mo te hauora mo nga ra kei mua i a tatou.

Na te mea kei te waihanga tonutia nga whakahaere hou mo te kotuitui i nga kaupapa tiaki tangata, e tika ana me ata whakaatu, a, me ata whakatakoto nga take e papa ana ki te tika me te momoho o te ahua o te waihanga i nga whakahaere nei, ara, ma te Maori e waihanga kaupapa mo te iwi Maori. He mea nui hoki kia hangai tonu te ahua o te whakatinana i nga take kaupapahere, na te mea he tikanga tino hira tonu tenei hei whakaruru hei tatari i nga mahi hauora mo nga ra kei te heke mai. I tua atu hoki kei te haputa tonu etahi o nga take kaupapahere nei i roto i nga mahara o nga kaituku ratonga Maori. E whai ake nei etahi o nga tino take hei whakatau kia momoho ai te ahua o te waihanga i te kaupapa kotuitui tiaki tangata, ara: te whakaurutanga me te rehitatanga, te oritetanga o te tauira toha putea, te kawe tahi i nga tupono me nga whakapaunga tapiri.

Meana kaore ake a Sam Rolleston o te Whakatupu Education Consultancy, me Sarah Prentice raua ko Phillip Davie o Coopers & Lybrand Consultants, kua kore e oti tenei tikanga whakahaere mahi hohonu. I ora ai i whai ha ai te tikanga whakahaere mahi nei me tino mihi tonu au ki nga kaituku ratonga Maori i ngakaunui nei ki te mahi tahi me matou, ara, ki te tuku mai i nga whakaaturanga whai hua me te whakawatea mai i a ratou mo tenei mahi. Na te mahi tahi me te kaha o te katoa i oti pai ai tenei purongo.

Nau te rourou, naku te rourou, ka ora te tangata.

Kim Workman
Te Tumu Whakahaere, Hauora Maori



Introduction
This report has been prepared as part of a review of co-ordinated care options for Maori. The review was commissioned by Te Kete Hauora and was carried out by management consultants from Coopers & Lybrand with additional support from Sam Rolleston, a consultant with Whakatupu Education Consultancy.

Before we wrote this report we carried out an extensive programme of desk research and field work. We met with a number of organisations, groups and individuals who are actively engaged in managing health and disability services which are used by Maori. We also conducted a one-day workshop which involved representatives from many interested parties. Their contributions at all stages of the review were valuable and are greatly appreciated. Inevitably, however, we were constrained by time and cost as to the extent to which we could consider all relevant initiatives. As a result we do not claim to have carried out a full, formal consultation exercise.

Our review of the options for Maori has taken place concurrently with a wider review conducted under the auspices of the Ministry of Health. We have held some discussions with the Ministry's review team. We have also had sight of some of their working papers and initial conclusions. In general, we have tried to avoid duplicating their work and we have sought to focus our field visits and fact-finding on specific initiatives and aspects of co-ordinated care which are likely to be of relevance to Maori.

This paper does not therefore seek to provide a definitive review of the theory and practice of co-ordinated care. We have not attempted to conduct a comprehensive study of initiatives in New Zealand and overseas. Nor have we considered in detail the underlying policy and economic issues associated with the development of co-ordinated care.

Our focus has been on co-ordinated care as a way of providing access to appropriate health, disability support and associated services for Maori. We have not considered in detail the nature of the specific services needed by Maori, nor the underlying patterns of health and disability which create those needs. There is an extensive body of literature which addresses such issues. This review is thus concerned with the systems used to manage services rather than the precise nature of the services being managed.

The structure of this report is as follows:

Section 2 provides a brief environmental scan of current initiatives in the area of co-ordinated care for Maori;

Section 3 outlines developments in co-ordinated care for indigenous people in a number of other countries;

Section 4 raises a number of specific issues relating to co-ordinated care options for Maori; and

Section 5 provides a summary of our main findings and recommendations.



Present Environment

Effective Health and Disability Support Services for Maori
There is general recognition in New Zealand that Maori do not, on average, enjoy the same levels of health and independence as the general population. The reasons for this are complex and have been the subject of much debate and discussion. However, two factors which are often cited are:

• the relatively poor socio-economic status of some Maori which leads to increased prevalence of disease and greater susceptibility to disability; and

• the failure of many publicly-funded health and disability support services to meet the needs of Maori via services which are appropriate and accessible.

The special needs of Maori are recognised in the Crown's objectives for Regional Health Authorities (RHAs) which state among other things, that the RHAs should:

This objective should be considered in conjunction with:

• the overall purpose of and objectives for RHAs as outlined in the Health and Disability Services Act 1993, and in particular Section 8 which provides for the special needs of Maori as one of the Crown's social objectives;

• the need to recognise Maori aspirations and structures such as those based around whanau, hapu and iwi, and the desire of Maori to take responsibility for their own health care;

• the need to purchase health services and encourage initiatives which promote positive health for Maori; and

• the need to encourage greater participation of Maori in order to develop health solutions which are effective, affordable, accessible and culturally appropriate.

The Treaty of Waitangi provides a fundamental framework for approaching the Crown's objectives for Maori health, and each article of the Treaty contains a significant provision that relates to health as follows:

• Kawanatanga - Article 1 provides for the Government to govern, though not in isolation from other provisions of the Treaty of Waitangi. The right to govern is qualified by an obligation to protect Maori interests. The role of RHAs is defined by virtue of the fact that they are Crown agencies.

• Tino Rangatiratanga - Article 2 provides for the tribes to exercise authority in respect of their own affairs. To some extent, tino rangatiratanga denotes the prerogatives of iwi/hapu in controlling their own affairs including their own physical, social, cultural resources, within a tribal development context. A characteristic of tino rangatiratanga is iwi autonomy.

• Oritetanga - Article 3 contains a provision which guarantees equality between Maori individuals and other New Zealanders. As long as socio-economic disparities remain the provision is not fulfilled.

The Waitangi Tribunal, the Court of Appeal, the Royal Commission on Social Policy and the Crown itself have defined several principles arising from the Treaty. The following principles are drawn from those sources:

• Partnership - Partnership refers to an ongoing relationship between the Crown, or its agencies, and iwi. Iwi may organise as Maori Trust Boards, Runanga, or incorporated societies. Within a single iwi there may be more than one constituted authority.

• Participation - Participation is a principle which emphasises positive Maori involvement in all aspects of New Zealand society. There are many levels of participation. Some are individual and group participation:

• in decision-making
• in delivering social services.

• Active Protection - The Waitangi Tribunal has recommended that the Crown or its agencies adopt a pro-active approach to ensure that Maori well-being is enhanced wherever possible. In health terms active protection is essentially about health promotion and preventative strategies, and it implies that an RHA will on its own initiative seek opportunities for the enhancement of Maori health.

We noted a great deal of enthusiasm among Maori for the role that co-ordinated care might play in bringing about the development of a more appropriate health and disability support system. Maori consider their health and disability support needs will be better served by a system which:

• places increased emphasis on health promotion and disease prevention rather than hospital-based services;

• gives Maori a greater say in the planning and management of service delivery;

• allows Maori to participate in purchasing and may extend to distinct funding of services;

• allows Maori to play a more significant role as service providers;

• more fully reflects the holistic view of health adopted by Maori;

• allows more flexible use of resources to address the social and economic causes of ill-health and disability through intersectoral collaboration; and

• enables users to access a wider range of traditional curative and wellness services.

Definition
The term 'co-ordinated care' does not define a single model of how services are funded and delivered. Rather it encompasses a spectrum of approaches all of which seek to afford the purchaser, (RHA), greater influence over the providers' actions. In the New Zealand context this spectrum has been seen possibly to include:

information consolidation and feedback - use of non-financial mechanisms by the purchaser or its agent to establish incentives for service providers to practice in a desired manner, eg, reports on comparative prescribing or referral practices:

• performance incentives - payment of a fixed sum when financial or other targets are met, eg, in the United Kingdom, GPs can receive a one-off 'bonus' payment if they achieve a pre-determined level of child immunisations;

• collaborative purchasing (or co-purchasing) - in which service providers and/or consumer representatives are involved in making purchasing decisions and setting contract terms;

• apitation - providers agree to deliver their service to a defined population for a fixed fee (regardless of volumes);

• fundholding and budgetholding - whereby providers are given a fixed budget in respect of a defined population and agree to meet the costs of their own services and:

• the costs of some or all of the other services to which they might choose to refer; and/or
• the costs of some or all of the services to which members of the defined population might self-refer; and/or
• the costs of other population-based services from which members of the defined population benefit;
• managed care;
• health care plans - organisations which assume full responsibility for meeting the health and disability support service needs of a defined population within a fixed budget (effectively becoming an alternative purchaser organisation).

Many of these elements are already in place in New Zealand, though possibly under different titles. They have typically emerged as a result of one-off initiatives by purchasers or providers, some of which pre-date the current health reforms. As a result, organisations are at different stages of development; they are not necessarily progressing sequentially through the models outlined above.

Clearly, there are also numerous variations on these models. For example, in the case of fundholding and budgetholding, limits may be put on the range of referred services which are covered by the fixed budget, or so-called 'stop-loss' arrangements may be used to limit the sum the provider can be required to spend during a specified period in respect of any single client. Equally, most of the models described above can be modified when a third party acts as intermediary between the purchaser and the provider/s responsible for co-ordinating or delivering services.

Under current policy settings, RHAs must remain accountable for purchasing health and disability support services for the populations they serve. In the current environment they cannot delegate this responsibility to other bodies. Consequently, any co-ordinated care scheme which seeks to purchase services for its members can currently only do so as an agent of the relevant RHA, and all funding for co-ordinated care schemes must be channelled through the RHAs. This effectively precludes the establishment of health care plans as an alternative to RHAs at present.

In the United States of America, the concept developed is best described as managed care where it is seen primarily as a tool for cost containment. Thus, managed care has been defined in the United States context as:
In Europe, where budget holding is still in its infancy, it is seen more broadly as a means not only to control spending but also to ensure that communities, purchasers, providers and regulators are all involved in shaping services to meet needs.

European budget holding typically determines the range, level and balance of interventions in areas such as health promotion, disease prevention and primary and community based services, as well as secondary and specialist care, to meet the needs of a specific population within defined resource limits. This has been defined more concisely as:

There is clearly no single definition of what does and does not constitute co-ordinated care. In our view, the three key characteristics which are essential components of any scheme are:

• specific population - the scheme's services are available to a group of people who knowingly choose the scheme by means of registration or enrolment;

• case management - the scheme co-ordinates, delivers or contracts for a defined range of health and disability support services for the population it serves; and

• incentives - the scheme offers some degree of financial incentive for managing the financial risk from within a budget which is wholly or partially fixed.

A Maori Perspective
From a Maori perspective, such schemes offer the potential to meet many of the aspirations outlined above (paragraph 2.3). For example:

• schemes can be established to serve specific iwi or hapu, or to meet the needs of Maori communities in either urban or rural areas;

• the processes of registration or enrolment can provide a way to monitor Maori health status more effectively and to introduce screening, immunisation and other disease prevention services;

• the transfer of funds, and financial risk, to a scheme can enhance equity by allocating sums which reflect the greater health and disability support needs of Maori;

• schemes might be given greater freedom and autonomy to integrate a wider range of health and disability support services including traditional services and broader social services, which may be better able to meet the needs of Maori;

• greater participation by Maori in health needs analysis and the management of purchasing processes will help to ensure a better reflection of Maori culture throughout the system;

• schemes can foster the personal and professional development of Maori managers and service providers; and

• the establishment of co-ordinated care schemes offers valuable opportunities to build on the moves towards Maori self management which are already being made by some iwi organisations and urban authorities.

RHAs' Views
RHAs are currently responsible for purchasing most publicly-funded health and disability support services within a fixed budget. Co-ordinated care can offer them a number of significant benefits.

In the past, many of the services which the RHAs are expected to buy were funded on an open-ended, fee-for-service basis. People:

• had relatively unrestricted access to such services, eg, self-referral for GP visits; or

• were entitled to receive a subsidy 'as of right', eg, for rest home accommodation; or

• received a service on referral from a health professional who was not necessarily aware of, or accountable for, the cost of that service, eg, prescription drugs.

Prior to the implementation of the health reforms there was relatively little co-ordination among service providers who practised independently and were funded from a variety of sources. Furthermore, in many cases, funding was, 'earmarked' for specific service providers, eg, General Medical Services benefits could only be claimed for services delivered by GPs, even if the nature of the service did not strictly justify GP involvement.

The RHAs were thus faced with a situation where they were able to exert little or no direct control over large proportions of their resources and where services were considered to be failing to meet needs. Also, combined factors such as technological developments, ageing populations and increasing public expectations placed additional pressure on RHAs' funds.

From their earliest days, RHAs sought to develop new approaches to their purchasing role which would enable them to contain costs while improving the quality and accessibility of health and disability support services. One such approach, which is being actively pursued by all four RHAs, is to encourage the introduction of systems of co-ordinated care.

The possible benefits of co-ordinated care from the perspective of both the RHAs and the Ministry of Health include:

• better integration of services for groups and individuals:

• over time
• across preventative, primary, secondary and tertiary interfaces
• between health and disability support, and
• between accident and illness;
• increased responsiveness - by empowering communities and devolving decision making closer to the consumer;
• improved equity - if health initiatives at a sub-regional level are funded according to the needs of the people they serve;
• stronger incentives for prevention - as a result of shifts from fee-for-service to capitation-based funding;
• capped expenditure - through replacement of open-ended demand-driven payments by fixed fee arrangements; and
• better risk management - by transferring financial risks from the RHA to providers or other organisations which are closer to the point where decisions on treatment and care are made.

It is for reasons such as these that co-ordinated care is seen as an attractive option which is now being pursued, albeit in a measured and cautious manner, by RHAs.



The Benefits and Risks
Our analysis suggests that co-ordinated care can offer benefits for both Maori and key players, most notably RHAs, in the mainstream health care system. As Figure 2.1 below indicates, most of the key benefits perceived by RHAs also meet the aspirations of Maori. This suggests that, as far as the two parties are concerned, the development of co-ordinated care for Maori could represent a 'win/win' situation.

Co-ordinated care offers RHAs ...	Maori seek ...
Better integration of services	An holistic approach to health care which is not constrained by Pakeha delineations of professional and organisational responsibilities.
Increased responsiveness	Services which are delivered in a culturally acceptable manner (possibly by Maori providers) and are accessible to those who may lack financial resources or be unable to travel.
Improved equity	Patterns of funding and resource allocation which reflect the generally poorer health status of Maori.
Stronger incentives for prevention	An increased focus on health education and disease prevention to reduce avoidable morbidity and mortality.
Capped expenditure	Assurances that, even within a cash-limited system, their needs and rights will be respected in resource allocation decisions.
Better risk management	Self-determination (tino rangatiratanga) which implies a willingness to accept both the risks and benefits of increased autonomy. Co-ordinated care may be a step along the way in achieving tino rangatiratanga, but will not itself be a fulfilment of it.

Figure 2.1: Benefits of Co-ordinated Care for Maori

Set against these attractions though, are a number of risks. These include:

• the practical difficulties of setting up and operating a scheme in an environment where there has been little or no past experience of such schemes;

• the challenges of allocating resources to schemes and avoiding 'cream skimming';

• establishing 'membership' of schemes;

• the additional costs of setting up and subsequently running schemes; balancing demands and (fixed) resources; and

• the dangers of 'cost-shifting' by schemes.

We consider the benefits and risks of co-ordinated care for Maori further in Section 4.



Current Initiatives
Despite any uncertainties it is clear that the RHAs as well as many providers and other groups are now actively pursuing the co-ordinated care agenda.

Examples which are of particular relevance to Maori include:

• the establishment of a number of Joint Ventures between Midland RHA and local iwi groups which are currently involved in joint purchasing decisions and will, in time, begin to operate as co-purchasers;

• moves by North Health to establish a series of MAPOs (involving groups such as Tainui in South Auckland) for co-purchasing between the RHA and local iwi;

• the achievements of Hauora Hokianga (under the auspices of the Hokianga Health Enterprise Trust) in operating, within a fixed budget, a comprehensive and seemingly effective primary care-led service for a population which is 70 percent Maori;

• establishment by groups such as Wai Health (a member of Te Whanau O Waipareira Group of Companies) in West Auckland, Te Oranganui in Wanganui and Hauora Ngati Hine in the Bay of Islands, of primary care initiatives which have the potential to form the early building blocks of co-ordinated care schemes for the people whom they serve; and

• plans by a number of other Maori-led groups to set up health and disability services and compete for RHA contracts.

These initiatives and others like them, encompass a variety of approaches to co-ordinated care for Maori. To date, most are focusing on co-ordinated care by means of case management and aspects of collaborative purchasing, rather than attempting to move into the more complex and demanding areas of capitation budgetholding and fundholding. As a result, the levels of financial risk faced by these pioneers is generally low.

We observe that organisations seeking to establish co-ordinated care arrangements for Maori are following one or other of two main routes. These may be characterised as:

• the 'provider' route - establishing a range of primary and/or community care services, or consolidating existing services, for an enrolled population; and

• the 'purchaser' route - setting up new organisations, eg, joint ventures, MAPOs, which enable Maori to exert influence or control over purchasing decisions.

Both of these models can be developed further. Some of the organisations which are following the provider route plan to progressively extend the range of services they offer, or to subcontract for services with GPs or other providers, and move towards capitation and budgetholding and/or fundholding. Similarly, organisations which are adopting the 'purchaser' approach may, in time, seek to assume financial responsibility for the decisions they make. Their ability to do so at the moment is, however, constrained by the legislative framework within which the RHAs operate.

In the case of initiatives such as the Hauora Hokianga and Hauora Ngati Hine, both of whom are following the provider route, there has already been some limited transfer of financial risk from the RHA. Thus, in Hokianga, a fixed allocation from the RHA is used to provide health promotion, primary care, disability support services and some acute hospital services for the local population. Similarly, Hauora Ngati Hine is developing a broadly-based 'community nursing' service for its target population under the terms of a block funding contract.

Clearly, the most ambitious approach to co-ordinated care for Maori, or any other group, would be to move towards the United States managed care model and establish an organisation which assumed full responsibility for all aspects of health and disability support services for a specific population. Such an organisation would receive a lump-sum allocation from the relevant RHA(s) and, in return, would be expected to deliver, or contract for, the services required by its enrolees. In doing so, the managed care organisation would have a high degree of autonomy to shape the pattern of health and disability support services for the people it served. It would become, in effect, a 'mini-RHA'(or a form of 'alternative health care plan' as envisaged in Your Health and the Public Health when it first appeared in 1991). The majority of financial risk would be transferred from the RHA to the managed care organisation, subject only to possible stop-loss arrangements between the two parties.

We do not believe that such a model is operating in New Zealand at present; nor, in our view, is it likely to emerge within the next year or two, especially in view of the current policy restrictions on RHAs relinquishing their purchasing responsibilities. Nevertheless, several of the groups which we met are clearly keen to move towards such a model and see it as particularly appropriate as a means both to meet the needs of Maori and to begin to realise the concept of tino rangatiratanga in the health and disability support arena.

In Section 4 we discuss some of the practical strengths and weaknesses of such an approach. First, however, we consider whether there are analogous schemes in operation elsewhere in the world.



International Experience
Against a background of growing demand for self-determination from indigenous people, increasing concern about their health and welfare, and emerging interest in co-ordinated care generally, it seemed possible that useful lessons for New Zealand might be found overseas.

We discovered numerous examples of health care initiatives which are directed at tackling the acknowledged health problems of indigenous people. We have sought to focus on the role that co-ordinated care is playing in those initiatives, and to identify possible lessons for New Zealand.

Australia
The 1989 report of the National Aboriginal Health Strategy Working Party, highlights the existence of Aboriginal community controlled health services. These first appeared in the early 1970s as voluntary organisations but subsequently attracted funding from State and Commonwealth governments. When the Working Party reported in 1989, there were 82 such organisations which received public funds and offered a range of health services to local Aboriginal communities. Their main role appears to be as providers of health services. As such they do not appear to have addressed issues of enrolment, case management and transfer of financial risk.

The Working Party's report states that, despite a lack of hard data, there was evidence that community controlled Aboriginal health services had made a 'significant contribution to the improvement in the health status of aboriginal people'. The report also notes that 'there is not necessarily any link between the level of funds available for health purposes and the actual health needs within any given community'. The community controlled health services were obliged to compete with state-run secondary and tertiary services for funds and there was evidence of inadequate co-ordination between them.

Responsibility for funding Aboriginal health services transferred from the former Department of Aboriginal Affairs (DAA) to the Aboriginal and Torres Strait Islanders Commission (ATSIC) when the latter body was established in 1990.

The DAA had been criticised for its lack of professional expertise in health matters and its inability to support community controlled services. ATSIC was also seen to inherit the same weaknesses. Furthermore, the decision-making bodies of ATSIC consist of elected representatives who are charged with making difficult resource allocation decisions across a variety of programme areas, not limited to health. In this highly politicised environment competition between programmes quickly grew, and it became increasingly difficult to introduce the intersectoral initiatives which were considered necessary to address many of the basic health concerns affecting Aboriginal people.

Following what appears to have been growing criticism of the effectiveness of Aboriginal health services a decision was made to transfer responsibility for services to the Commonwealth Department of Health and Human Services. This arrangement came into effect on 1 July 1995 and so its impact clearly cannot yet be assessed.
Despite the chequered history of community controlled Aboriginal health services they do appear to have made some progress in raising the health status of Aboriginal people. The benefits of the system were seen to include:

• a service which is acceptable to the community it serves;
• the prevention of covert and overt racism from doctors, nurses, receptionists and other non-Aboriginal staff working in Aboriginal health;
• the prevention of unethical behaviour;
• the prevention of presumptions about lifeways and illnesses which may lead to inaccurate diagnosis;
• a social and cultural awareness of the people it serves;
• appropriate cultural support for patients both pre- and post-diagnosis;
• a priority commitment to raising the health status of the people it serves;
• training, education and employment for Aboriginal people;
• culturally acceptable staff;
• flexibility.

Thus, even if Australia's community controlled Aboriginal health services do not represent co-ordinated care schemes as we would define them, they do offer some evidence to support the view that services which are controlled by Maori could provide more effective health care and disability support.

United States of America
Provision of health services for native Americans is dominated by the Indian Health Service (IHS) which was first established as part of the Bureau of Indian Affairs in 1924, and transferred to become part of the Federal Department of Health Education and Welfare (now Department of Health and Human Services) in 1955.

IHS defines its mission as follows:

IHS has an annual budget of US$2.1 billion (1994) and is responsible for an estimated 1.4 million people who, as members of federally recognised Indian tribes or their descendants, are eligible to receive services. Members of those tribes which have never signed treaties with the USA are, however, not eligible to participate in IHS or other federal programmes.

IHS originally operated by:

• direct provision of care through government owned and operated hospitals, clinics and health centres; and
• contracts with third parties for the delivery of care, principally in areas where IHS does not have its own facilities or is not equipped to provide a needed service.

Since the passing of the Indian Self-Determination and Education Assistance Act in 1975, however, tribes have had the option of staffing and managing IHS programmes in their own communities. As a result, increasing numbers of American Indian tribes and Alaska Native corporations are now running hospitals, outpatient facilities and other services. Since November 1992, 14 tribes have delivered comprehensive preventative and curative services through 'self-governance compacts'. In 1993, IHS allocated over a quarter of its income ($551 million) to tribal grants and contracts.

Data for October 1993 indicate that IHS and tribes together operated 49 hospitals and 461 outpatient facilities (see Figure 3.1). In addition, there were 34 Indian-operated urban projects which included primary care, information, referral and community health services. All IHS and tribal hospitals are accredited.

Type of facility	IHS	Tribal	Total
Hospitals	41	8	49
Health centres	66	110	176
School health centres	4	4	8
Health stations	44	62	106
Alaska village clinics	-	171	171

Figure 3.1: IHS and Tribe Facilities (1 October 1993)

IHS places particular emphasis on community-based primary care and has also indicated that resources need to be directed towards elderly care, substance abuse, child abuse and women's health care. Indian values of listening, mutual respect and dignity and harmony are seen as central to its operations.

Since IHS-funded services are generally free to users at the point of delivery, take up is high, but is technically voluntary, ie, other mainstream services may be used if preferred. This arrangement does, however, make it important to regulate access which is typically controlled by means of identification cards issued to members of eligible tribes.

Depending on the size of the native American population in any particular area there may or may not be a choice of service provider. Facilities which are run by IHS itself will generally accept any eligible person. Those which are run by tribes under contract to IHS are not required to serve members of other tribes or non-native Americans except in emergency situations.

IHS is clearly seeking to increase American Indian and Alaska Native involvement in the management and delivery of health services, principally by providing grants or contracts. The more recent emergence of 'self-governance compacts' may be particularly relevant as a move towards a co-ordinated care approach. Overall, however, IHS appears still to focus largely on delivering services and channelling resources to high-need groups rather than the active case management which is fundamental to co-ordinated care.

Despite the widespread use of co-ordinated care in the United States health system, we found no examples of either commercial or not-for-profit schemes that had been established specifically to meet the needs of indigenous people.



Canada
Under Canada's 1986 Indian Health Program Transfer Policy, indigenous communities are able to assume control of certain health services which had previously been provided by the Medical Services Branch (MSB) of the Federal Department of Health and Welfare. The services which can be transferred to community health boards are:

• community health services;
• environmental health services;
• prevention and counselling services for alcohol and drug abuse; and
• some services provided by medical professionals.

Before responsibility can transfer, the community health board concerned must follow a clearly defined process comprising:

• a pre-transfer planning phase - which is funded by MSB and encompasses establishing a Health Board, conducting a health needs assessment and developing a community health plan;
• a negotiation phase - during which the allocation of resources to the plan is agreed with MSB and a transfer agreement, covering up to five years, is signed; and
• an implementation phase - which covers the start-up of the community health plan and monitoring arrangements, including annual financial and performance audits.

During the first seven years in which the Indian Health Program Transfer Policy was in force an estimated 48 percent of all Canadian indigenous communities had been involved in some stage of the transfer process and 25 Health Transfer Agreements were signed.

There has been some concern on the part of Canadian indigenous communities that the Transfer Policy is an attempt by Government to reduce costs and shed financial responsibilities. Pressure has also grown to have services such as optometry, dental and medical transportation, which cannot currently be included in transfer agreements, added to the schedule of services available for transfer. (Two organisations have recently been involved in pilot schemes which encompass such services.)

The level of funding offered to community health boards is intended only to match the level available prior to the transfer process. This arrangement has been criticised in some quarters for perpetuating existing service deficits.

Perhaps the most fundamental difference between the Canadian Transfer Policy and the vision of co-ordinated care favoured by most Maori, is the exclusion from the former of primary medical care provided by GPs. Given the pivotal role of GPs in shaping people's access to health services this is likely to limit significantly the realisation of the potential benefits attributed to co-ordinated care.

Scandinavia
The Saami people of northern Scandinavia are estimated to number 60-80,000, spread among Norway (50 - 60%), Sweden (25 - 30%), Finland (12 - 15%) and Russia (2 - 3%). A Saami Parliament was established in 1989 to advise the Norwegian Government on policy issues.

Saami health professionals practise in a number of areas but 'the need for more community control of Saami health services does not seem to be a major issue for Saami people'. The Government is reportedly loath to allow the establishment of separate services for Saami people and most Saami people appear to be happy to use 'mainstream' health services.

We understand, however, that there are plans to set up self-managed health care organisations for the indigenous people of Northern Russia. Funding for such a scheme is currently being sought from the Scandinavian countries by the Barents Association.

Conclusions
Our review of overseas experience in establishing co-ordinated care for indigenous people has not revealed any well-developed schemes which appear to match the aspirations of Maori. Nevertheless, our findings do suggest that:

• much of the momentum to establish self-managed health services appears to stem from service providers and users rather then purchasers/insurers;
• central governments generally appear to acknowledge the value of self-management as a means to tackle the poor health status of indigenous people; and
• there is a common trend to move beyond simple delivery of health services by indigenous people towards greater autonomy and risk sharing in the funding of services.

It is clear that the nature of a country's public health care system is a key determinant of whether or not co-ordinated care offers a suitable means to meet the needs of indigenous people. In the USA, for example, IHS is arguably established more as a means to channel additional public resources to areas of high need within the context of a largely privatised system. In Australia, on the other hand, the Aboriginal health services may simply be viewed as a component of the Commonwealth's provision of services which encompasses little by way of case management or transfer of risk from the centre.

Of the examples we have considered we believe that the Indian Health Transfer Policy in Canada is likely to offer most by way of practical experience in establishing co-ordinated care type schemes for indigenous people. In particular, we consider the phased implementation process, and subsequent monitoring arrangements may merit further study.

With this exception our brief review does not lead us to believe that there is a great deal that New Zealand can learn from overseas about co-ordinated care for indigenous people (as opposed to the delivery of services for such people). We believe that the reformed health care system in this country probably affords greater opportunities for Maori to develop services which meet their needs than at any other time or in any other place.



Issues
Evidence from New Zealand and overseas supports the view that co-ordinated care can offer an effective means to meet the health care and disability support needs of Maori. Indeed, there are already several exciting projects under way which seek to deliver the benefits of co-ordinated care to Maori. There are, however, a number of issues which will need to be addressed before the approach can be adopted more widely.

In this section we highlight several areas of concern and discuss possible responses. Many of these are concerned with the operation of co-ordinated care schemes in general although we have endeavoured, wherever possible, to focus on aspects of particular concern to schemes which set out to serve Maori.

We consider the issues under the following headings:

• enrolment criteria;
• cream skimming;
• funding formula;
• proving membership;
• cost shifting;
• restrictions on the use of health and disability funding;
• transaction costs;
• ability to manage risk;
• management capacity;
• implementation time frame; and
• accountability.

Enrolment Criteria
One of the fundamental characteristics of co-ordinated care schemes is that services should be offered to a specific population. Clearly, the main focus of our work has been services for Maori. To what extent, therefore, would it be possible, or desirable, to establish schemes which aim to serve a solely Maori population?

None of the groups we met saw their role as being to serve Maori and only Maori. All were willing to allow anyone to enrol or register, regardless of their cultural affiliations; and all saw no need to change that approach as they moved towards budgetholding and/or fundholding.

Clearly some groups had deliberately set out to work to a strong kaupapa Maori, often as a reaction to perceived weaknesses in mainstream systems and services. Such groups were strongly committed to providing their members with access to appropriate services, often delivered by Maori providers. In some cases, they were established by an iwi with a specific goal of serving iwi members. They were, however, also quite happy to welcome non-Maori, or members of different iwi, as members. Indeed we received several accounts of non-Maori consciously choosing to enrol with such schemes because they preferred the approaches to service delivery which were offered.

We also found examples of schemes which set out primarily to serve a geographically rather than ethnically delineated population. In areas where there are large numbers of Maori such schemes might become de facto co-ordinated care schemes for Maori. Even if they did not begin life as Maori initiatives it can be assumed that they would be obliged, as part of the local RHA's contract terms, to offer appropriate services for their Maori members.

In principle, we can see no reason why some future co-ordinated care scheme might not restrict its membership to Maori. In conceptual terms, the position of such a 'restricted' scheme would be no different to that of a scheme established for employees of a particular organisation, or members of a trade union. It might be particularly appropriate as a means to channel resources to specific target groups with high health and/or disability support needs. Limits on who could join would then be essential.

In such cases it would also be necessary to ensure that the establishment of 'restricted' schemes did not disadvantage those who were not eligible to join. Thus, in areas of high Maori population, just as in towns with a dominant local employer or industry, the RHA concerned would need to ensure that people who were ineligible to enrol in such a restricted scheme, or who chose not to, continued to have access to the same level of services as other RHA residents.

Conversely, we found no examples of schemes which required Maori to enrol, or assumed that particular groups, possibly specific iwi, would be members by default. Such an arrangement could be seen as an unacceptable restriction of individual choice. On the other hand we were told that some schemes had found it difficult to contact potential members and interest them in joining a scheme. As a result they continued to receive the 'default' services purchased by the RHA.

In effect the current system requires people to 'opt in' to schemes, otherwise the RHA continues to purchase all their services. Some schemes argued that an 'opt out' provision, under which potential members would be assumed to have allied themselves to the scheme unless they indicated otherwise, could be appropriate in certain circumstances. (The RHAs, in effect, operate opt out arrangements at present.)

Our view is that opt out provision of co-ordinated care would not be acceptable unless and until such time as there is true competition between RHAs and health care plans, when each organisation would need to choose who they wished to purchase their health and disability support services. In the meantime, we strongly recommend that membership of all schemes should be voluntary, and should be the result of a conscious, informed decision by the individual who wishes to register.

Our research and discussions suggest that most schemes will, indeed, operate on the basis of open enrolment without restrictions on who can become a member, or compulsion for particular people to join. The concept of co-ordinated care for Maori thus becomes defined more in terms of the services that a particular scheme provides access to the ways it works and possibly its management philosophy, rather than any rigorous membership criteria.

From a policy-maker's perspective, therefore, a co-ordinated care scheme which targets Maori members need be no different from any other scheme which aims to serve a specific market niche. There may be no need to develop specific policy in respect of co-ordinated care for Maori.



Cream Skimming
The issue of cream skimming is closely tied to that of open enrolment and funding formula. It relates to the risk of a scheme, or health care plan, which has budgetary responsibility, rejecting potential members whose needs are likely to be higher than the level assumed by the relevant budgetary allocation process, or, equivalently, seeking only to enrol those who are likely to have lower than anticipated needs.

Cream skimming is unlikely to be a problem for schemes which target Maori members since, typically, the health status of Maori is lower than among the population as a whole. Nevertheless, the risk could still be real if particular sub-groups were targeted, or if higher than expected numbers of young members, with lower health needs, enrolled in a scheme.

The Ministry of Health has proposed that schemes 'must be required to enrol all those who wish to enrol' in order to reduce cream-skimming. Until more sensitive allocation formulae can be devised this may be the only feasible approach. It does, however, fail to address the possibility of schemes seeking to target particular, low need, groups by such means as siting services in affluent areas, producing publicity material with an aggressively 'up-market' ethos or employing complex membership procedures which might be intimidating to members of lower socio-economic groups.

The issue of cream-skimming is not restricted to co-ordinated care for Maori and will present a very real problem for RHAs as more schemes are established. The groups we met generally seemed to be content to negotiate 'appropriate' levels of funding with their RHAs, rather than to look for a perfect formula-based approach. Clearly this leaves a great deal of power in the hands of the RHAs who can 'walk away' from such negotiations if they are unable to agree favourable terms. In our view, however, it may be that the only practical approach at present is, in fact, one built around mature negotiation and openness regarding the actual costs of providing care for a given group of members.

Funding Formula
One of the major concerns identified about co-ordinated care arrangements was that of identifying the appropriate level of funding for a newly established co-ordinated care organisation. In an ideal world, where the potential risks of cream skimming are minimised, the funding of schemes would be tied directly to the needs of their members. This would require a population needs based funding formulae similar to that which is currently used to allocate resources to RHAs. In practice, however, this could be difficult since:

• the development of such formulae in areas such as public health and disability support is still at a relatively early stage;
• different formulae would be needed for schemes which offered different services, eg, a formula which successfully predicted needs for secondary care services might not apply to primary care needs; and
• use of needs-based allocation formulae for the relatively small numbers of members in most schemes could prejudice confidentiality if the movement of 'high need', eg, HIV positive individuals, into or out of schemes caused wide fluctuations in funding.

Recent experience in the United Kingdom has indicated that there are numerous problems associated with trying to establish a robust funding formula for comparatively small populations which accurately reflects their needs. In the absence of such a formula, initial funding allocations have tended to be linked to historical funding patterns. For emerging Maori organisations which have an enrolled population that has not been accessing health services to the same extent as other populations, and where low health status may indicate a greater than average need for health services, funding allocations based on historical expenditure patterns pose a number of potential risks. This is particularly so in the early years of a new scheme's operation, where there may be an exceptionally high take-up rate for health services if services suddenly become more accessible and acceptable.

Thus, work on developing an acceptable funding formula, was seen as being a high priority if Maori organisations were to be expected to move into risk sharing arrangements with RHAs. Until an appropriate funding basis is established new schemes are unlikely to be keen to enter into any risk sharing arrangements which could in turn impact adversely on the development of the co-ordinated care organisation.

Proving Membership
Co-ordinated care schemes which are funded to meet the needs of a defined membership are unlikely to wish to spend their resources on people who are not members. Equally, an RHA which has paid a co-ordinated care scheme to serve a particular group of people will wish to ensure that those people do not routinely 'double dip' and avail themselves of services which the scheme does not fund.

We noted a widespread acknowledgement of this concern among the pioneers whom we met and all seemed to be willing to accept that some form of 'membership card' might be needed to prove that an individual was entitled to receive the benefits of enrolment. This would obviously help to ensure that non-members did not gain benefits to which they were not entitled, and that the scheme was not required to meet costs for which it was not funded. It would not, however, prevent scheme members availing themselves of 'mainstream' RHA-purchased services if they wished to do so. This could only be achieved if some form of membership or identity card was to be made a universal requirement.

In time, unique individual identifiers and improved computer and communication systems will help to ensure that the costs of delivering services are correctly assigned to the RHA or the appropriate scheme, although the problem of impersonation will still remain unless photo-cards or technologies such as palm or voice recognition are accepted and become widespread. For now, however, most groups which are moving towards co-ordinated care appear to be content to adopt a pragmatic approach and are willing either to recognise a given level of cross-subsidisation to/from non-members or to assume that the effects are equal and costs balance out on a 'knock-for-knock' basis. This is undoubtedly a realistic approach in rural areas and places where there is only a single scheme operating as an alternative to the RHA. It may be less practical in urban areas or areas where competing schemes operate.

In view of the possible implications of the need to prove membership, and to prevent 'double dipping' by members of co-ordinated care schemes, we were surprised that we did not encounter more resistance or concern. We believe that it may be advisable to encourage wider debate on this issue now, and to agree to some broad policy guidelines now rather than risking opposition at a later stage.



Cost-shifting
Some co-ordinated care schemes may only provide their members with access to a limited range of services. Indeed, among the groups we met several indicated that they did not envisage the scope of their scheme extending beyond a range of primary health care and disability support services. For Maori, in particular, these were seen both as the areas of greatest need and as the areas where existing 'mainstream' systems and services were least able to respond appropriately. Also, there is an increased financial risk to a scheme which aims to meet the costs of relatively infrequent but extremely high cost, specialist services. It is probable, therefore, that schemes which target Maori may not encompass secondary and tertiary services and may expect those services to be purchased for both members and non-members alike by the RHA.

In such circumstances there is clearly a risk that a scheme might deliberately seek to shift costs onto the RHA by arranging unnecessary referrals to more specialised services which the scheme is not required to offer. Similarly, a scheme which continues to be eligible to receive fee-for-service payments from ACC may adopt a very broad definition of 'accident'.

Few of the groups we met considered such cost-shifting to be a danger. In one case, it was suggested that inappropriate referrals to hospital services, which may be distant but RHA funded, would not be accepted by members of the scheme, or would be stopped by the organisation's trustees who had a strong community representation role.

Our view is that the risk of cost shifting will remain low until such time as co-ordinated care schemes begin to have much wider budgetholding and fundholding responsibilities, and move away from the current 'pilot' nature to a more commercially-minded outlook. When they do, there will be a clear need to define very clearly the range of services they must offer; and those which remain the responsibility of the RHA.

Restrictions on the Use of Health and Disability Funding
Maori adopt an holistic view of health which encompasses taha wairua (spirituality), taha hinengaro (thoughts and feelings), taha tinana (physical well-being) and taha whanau (family). This view is mirrored in their aspirations for appropriate health services which, it is argued, should extend beyond the mainstream medical model to encompass a range of health, disability and wider social support services.

One of the attractions of co-ordinated care, from a Maori perspective, is thus the opportunity it might offer to extend the boundaries of health care and disability support by:

• including a range of traditional healing approaches; and
• extending services into areas such as housing, education and broader social welfare.

RHAs are clearly constrained in their ability to spend health and disability support resources on 'non-health' services. They are likely to impose similar restrictions on co-ordinated care schemes with which they contract; indeed they may be legally obliged to do so.

A number of the people we spoke to appear to see increased flexibility in resource use as a key strength of co-ordinated care. We are concerned, therefore, that tensions might arise if schemes which aim to meet the needs of Maori, find that they are unable to spend resources in ways which they consider appropriate and even necessary. It would be helpful if the RHAs, when entering into discussions on co-ordinated care for Maori, were careful to delineate from the outset what are and are not permissible areas of spending. If these are not acceptable then further policy development may be necessary.



Transaction Costs
The establishment of schemes may be viewed as introducing a new tier (between RHAs and providers) in the management structure for publicly-funded health and disability services. This could be a particular issue for those schemes which follow the purchaser route towards co-ordinated care.

Clearly there are costs associated with running a co-ordinated care scheme. These include the costs of negotiating contracts with the RHA and providers, maintaining financial and other records, and meeting the costs incurred by trustees or board members.

It would be a matter of some concern if these additional 'transaction costs' reduced the amount available to fund service delivery. Conversely, if the benefits of co-ordinated care, in terms of reduced service costs or improved quality, exceed the level of any additional transaction costs then the overall impact will be positive.

We did not obtain data from the groups we met about the actual, or projected, transaction costs of their schemes. In practice, it may be difficult for some schemes to distinguish transaction costs from service delivery costs, eg, if a GP divides his or her time between direct patient care and managing the scheme, and the pilot nature of some schemes may distort spending patterns. Nevertheless, we believe that efforts should be made to monitor transaction costs and to compare them with the financial and other benefits of co-ordinated care. Equally, we would expect to see some reduction in RHAs' costs if and when co-ordinated care schemes assume an increased responsibility for purchasing. This is an area where we believe further research should be undertaken.

Ability to Manage Risk
One of the strengths of co-ordinated care is its ability to bring purchasing decisions closer to the people on whose behalf such decisions are made. This is a particular attraction for Maori and should obviously help to improve the sensitivity of purchasing.

There is a danger, however, that schemes which serve relatively small populations will be exposed to wide fluctuations in demand and hence costs. Such fluctuations are statistically less likely to occur in larger populations. They are also less likely to affect schemes which only seek to provide access to relatively low cost/high volume services such as primary care, as opposed to 'one-off', high cost services such as specialised surgery.

Possible remedies include re-insurance and stop-loss arrangements, risk pooling across several schemes or negotiation of longer term contracts, allowing risk to balance out over time rather than across a larger population.

We were not made aware of any sophisticated approaches to risk management being used by the groups that we met. Once again, given their role as pilots, their focus on primary care and their limited involvement in budgetholding that is perhaps not surprising. It is, however, an area where support and advice may be required as schemes, especially those with relatively small memberships, mature.

Consideration may also need to be given to the question of a minimum membership for co-ordinated care schemes, probably tied to the range of services covered.



Management Capacity
Given the relative novelty of co-ordinated care in New Zealand there is a very limited pool of managerial expertise on which schemes can draw. The problem is perhaps even more acute for those groups which set out to serve largely Maori populations and, as a result, require a high level of Maori participation at senior levels within their organisation.

We were generally impressed with the knowledge, professionalism and commitment of the people we met who are currently involved in developing co-ordinated care initiatives for Maori. In most cases schemes are run by experienced health managers and/or business people, many of whom have had a long-standing commitment to the goal of improving health and disability services for Maori.

As co-ordinated care grows it will be necessary to establish a 'second wave' of experts who can lead and manage future initiatives. They may be hard to find although we understand that a number of exciting initiatives are currently underway in the tertiary education sector to encourage the emergence of a new cohort of Maori health managers, as distinct from health professionals.

We recommend that, if Te Kete Hauora wishes to support the continued development of co-ordinated care for Maori, it considers how to foster the development of the necessary health management skills among Maori. Initiatives such as formal training programmes and self-development for health managers may need to be explored with the RHAs.

An alternative approach could be for schemes to 'buy-in' management expertise from external agencies. (We refer here to ongoing management contracts, not one-off assistance to establish new schemes.) This could be an attractive option for some schemes, particularly smaller schemes for whom it may also offer a means to manage risk. Care would, however, be needed to ensure that widespread involvement of external management expertise was not allowed:

• to prejudice the character and objectives of schemes;
• to detract from the potential for development and self-management by Maori;
• to lead to further increases in transaction costs which were not matched by additional benefits; or
• to impose a uniformity on the style of service delivery which might limit consumer choice.

Implementation Time-Frame
We observed a high level of enthusiasm for co-ordinated care among groups concerned to address the long-standing health and disability problems of Maori. Indeed, it was even suggested that many Maori were among the strongest supporters of health reform because of the opportunities it presented to develop more appropriate services and to foster tino rangatiratanga.

Against such a back-drop it will be important to ensure that understandable enthusiasm does not lead to unacceptable haste. We are concerned that some groups, especially those which are relatively new to the field, may be underestimating the scale of the task involved in establishing schemes. They would be well advised to proceed at a measured pace rather than trying to go too far too quickly.

On the other hand, we noted some concerns among the better established schemes that development was being hampered by reluctance on the part of the RHAs to 'let go' of control in some areas. In particular it was suggested that moves towards increased budgetholding, eg, secondary care, were being stalled by the unduly cautious approach of the RHAs.

Clearly a balance will need to be struck between the enthusiasm of schemes which may wish to develop faster than they are safely able to, and the natural concerns of the RHAs to ensure that access to services is protected and finances are safeguarded. Our initial, subjective assessment is that a more cautious approach may be appropriate in respect of proposed new schemes while it may be possible to give greater responsibility to established and demonstrably successful schemes.



Accountability
Co-ordinated care schemes can exert a strong influence over their members' access to health and disability support services. It is thus essential that, in organisational terms, they operate within an appropriate accountability structure.

All of the groups we met had been established within the framework of a charitable trust although the bodies responsible for the initiatives appear to have adopted a variety of models to govern their relationship with their parent trusts. There are a number of legal restrictions on the ability of trusts to raise loans etc, and tax implications of trust status that may require further investigation as schemes mature.

The role of trustees as representatives of the schemes' members appears to have been particularly important within the early initiatives. Trustees can play a key role (in support of the relevant RHA) in ensuring that the scheme meets quality standards, offers access to appropriate services and, as noted above, can help to prevent cost-shifting onto other, less acceptable, providers.

Formal responsibility for health and disability support services is likely to continue to rest with the four RHAs for some time to come. It will thus be necessary to establish clearly the relative accountabilities of co-ordinated care schemes and their local RHA(s).

In the specific context of iwi-based co-ordinated care schemes there is an additional need to ensure that appropriate links are established and maintained between the scheme and the wider iwi structure. Further thought may be required to consider how best to tackle this issue in the case of schemes which set out to serve Maori from several iwi, especially in urban environments.



Summary
Our review has sought to investigate the role of co-ordinated care in providing access to appropriate health, disability support and associated services for Maori. Although we have undertaken an extensive programme of fieldwork and desk research we have not conducted a full consultation exercise.

The focus of our work has been on co-ordinated care as a system of management. Detailed issues concerning the service needs of Maori and the delivery of services by or for Maori are outside the scope of this exercise.

We have defined co-ordinated care as an approach to purchasing health and disability support services by organisations other than RHAs. A co-ordinated care scheme will, we suggest:

• aim to meet all or some of the health and disability support needs of a group of people;
• co-ordinate, deliver or contract for a range of services; and
• accept some degree of financial risk.

Co-ordinated care appears to offer opportunities for Maori to meet many of their aspirations for more appropriate and effective health and disability support services. It also offers a means for RHAs to meet their goals in terms of better integration of services, improved equity and responsiveness, stronger incentives for prevention, capped expenditure and more effective risk management.

There are currently a number of pilot schemes in New Zealand which are adopting the principles of co-ordinated care. Some are developing from a provider perspective, others are emerging from purchaser initiatives, although the latter are presently constrained by the current policy settings on who can purchase health and disability support services. We were generally impressed by the achievements of these pioneers, and by their plans for the future. To date, however, none could be described as operating a true system of co-ordinated care.

We also looked overseas for examples of co-ordinated care being used to meet the needs of indigenous people. With the possible exception of Canada's Indian Health Program Transfer Policy, which is itself constrained by the omission of certain key services, such as general practice, we found no examples of established schemes which specifically targeted indigenous communities. In most cases initiatives appear to focus on service delivery, or to be constrained by the characteristics of the health care systems of the countries in question.

Our international research does, however, suggest that moves towards self-management of health services are seen as an effective means to tackle the poor health status of indigenous people. Governments and providers alike appear to be pursuing this objective.

Co-ordinated care is not without its risks and we have identified a number of specific issues which, we believe, will need to be addressed if schemes are to develop further in New Zealand. These issues are:

• enrolment criteria;
• cream skimming;
• funding formula;
• proving membership;
• cost shifting;
• restrictions on the use of health and disability funding;
• transaction costs;
• ability to manage risk;
• management capacity;
• implementation time frame; and
• accountability.

Areas where we believe that further policy development may be necessary are:

• criteria governing the process for establishing schemes (possibly modelled on the Canadian transfer process);
• changes to current policy setting to allow the emergence of alternative purchasers (other than RHAs);
• the appropriateness, and implications, of 'open' and 'restricted' schemes;
• wider implications of the need to prove membership of schemes when accessing services;
• the acceptability of schemes spending resources delegated from RHAs on 'non-health' services (as conventionally defined); and
• accountability and governance arrangements.

In addition, we recommend that Te Kete Hauora and/or the RHAs consider further:

• the costs (specifically increased transaction costs) and benefits of a growth in co-ordinated care;
• funding formulae for co-ordinated care schemes;
• specification of services to avoid cost-shifting into and out of schemes;
• minimum membership of schemes; and
• further development of Maori health management capabilities.

Overall, we believe that there is a high degree of congruence among the aims and aspirations of Maori, RHAs and the Ministry of Health. The development of co-ordinated care, if it is properly controlled and takes place in an appropriate policy environment, offers a means to meet those aims and aspirations.



Bibliography
The following publications and articles were used as background to this report:

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Boreham G. (1995) ATSIC Loses Funding in Transfer of Health Role - Budget 1995/96. Melbourne AGE 10 May.

Coopers & Lybrand (1995) European Healthcare Trends: Towards Co-ordinated care in Europe. Hauora Hokianga / Hokianga Health (1994) Hokianga Health Enterprise Trust Annual Report for Year Ending 30 June 1994.

Indian Health Service Comprehensive Health Care Program for American Indians and Alaska Natives. US Department of Health & Human Services.

Indian Health Service Trends in Indian Health 1994. US Department of Health & Human Services.

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National Aboriginal Health Strategy Working Party (1989) A National Aboriginal Health Strategy. Australia.

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Tatz C. A Disaster Then and Still - Aboriginal Health Policy - Sydney Morning Herald 20 February 1995.

Te Puni Kokiri, Ministry of Maori Development (1994) Ma Te Maori E Puri Te Maimoatanga Maori -Co-ordinated care By Maori.

Willox I. and Magazanik M. Ministers Clash on Aboriginal Health Plan. Melbourne Age 11 February 1995.